Originally Posted by
hyderago
Well, it would also be poor revenue management to charge so much more than your competitors when you have serious issues (like image, on-time %, etc) and can't fill up your seats even when your prices are lower than your competitors.
Well, on this particular route, AI can command a premium over everyone else - they have a monopoly on the nonstop. That means that anybody who is time-sensitive and wants to get to their destination fastest is willing to pay more for the ticket. (whether delays mean that this is the truth or not is another story
).
Airline revenue management is very interesting. Costs are relatively stable - it will cost a similar amount to operate the airplane full or empty. That means that airlines just want to maximize the revenue they get from the flight. Charging a premium on a nonstop is one way to increase revenue.. If AI is managing to sell tickets (and I assume they are because the price hasn't dropped), then they should keep the higher price compared to competitors.