Originally Posted by
QueenOfCoach
No, it's another in a long line of false analogies.
It would make no sense to price retail items that way.
It does make sense to price airline tickets by city pairs and not by miles actually flown.
If A-B-C costs $100 it is because some competitor prices A-C at $100, not because A-B is $50 and B-C is $50. Airlines charge higher prices to and from their hubs because that make up for lower prices between city pairs where there is competition.
If A-B-C costs $100 and A-B costs $150, that is because there is competition for the A-C city pair, but less competition for the A-B city pair when B is the airline's fortress hub.That is totally rational. Many businesses set their prices by demand, not by actual unit cost.
The only alternative would be a WN pricing model. WN is cheaper in some markets, more expensive in others.
It's not a false analogy. What do you know about the input costs of beach toys, as well as the different demand and supply factors of bundled or discreet items and, consequently, the discretionary pricing applied to them. Very little I assume. It is no more or less sensible to price retail items this way than it is to price services (airline or other) this way. There are any number of rational explanations for what appear to be illogical pricing approaches. For the sake of argument, assume there is a strong demand for buckets only, and not for bundled items. Then the comparison is identical.
I understand WHY HCT exists and what the supply and demand factors are that drive them, but these are the result of an inefficient (ie non-clearing) market. In your example above, an efficient market in the case of an HCT traveller would result in an additional sale of the B-C paid but unused portion.
Ultimately, if airlines face a skewed demand structure that gives rise to HCT, then it is possibly time to drop flights from B-C. Yes, fares would go up but perhaps capacity would be reallocated to A-B to counteract this.
I agree fully the Hidden City prices are irrational from the point of view of the customer, and that thousands of analogies could be concocted to illustrate the irrationality. None of those analogies are accurate, as they do not consider the particular situation of pricing airline tickets in a competitive environment.
By definition of 'competitive environment' that's incorrect since any number of competitive environments can be contemplated that perfectly reflect that of the airlines.
Am I an airline apologist? No, I'm a database administrator by profession and analyze various scenarios without emotion. It is clear to me that the occasional Hidden City violator will have no negative consequences, so long as they
1. Skip the last segment of a trip
2. Take carryon baggage
3. Don't make a habit of it
Do 1-2-3 and you'll be fine. No worries.
Commute to work for a couple of months with Hidden City tickets, and you risk finding yourself in legal trouble. You can concoct all the false analogies that you want, but His/Her Honor the judge won't be amused.
Please so me evidence of once case where a judge has upheld an airline's claim against an HCT 'offender'. I'm not talking about a nasty letter or the reset of the FF account.