bedelman

Posts: 500
From: Cambridge, MA - AA EXP
Registered: Jan 2001 posted 03-16-2002 04:21 PM
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Not strictly "in the news" -- but certainly on my mind as I think about fares to places I've gone and places I'm going...

It seems to me that premium fares (and full coach fares, I believe) on Atlantic routes are noticeably higher than fares to Pacific destinations. I'm unsure how to quantify this in particular -- there are so many idiosyncratic differences between cities (how many carriers serve which cities, which cities have which kinds of capacity and treaty restrictions, etc.) -- but this is definitely my intuition at this point.

If if it's actually the case that Atlantic fares are higher than Pacific fares -- and I welcome comments saying it's not! -- I'd find it interesting to have a better sense of why it's true.

Some ideas that immediately come to mind:

* Varying intensities of competition.

* Varying demand for premium (or full fare coach) travel.

* Treaty restrictions on capacity or carriers.

* Restrictions on airport capacity.

* Treaty restrictions on fares.

* Plane sizes. (i.e. larger planes needed to cross the larger Pacific distances, and larger planes [inevitably?] have disproportionately larger premium cabins.)

* Something else?...

No doubt some combination of these factors is ultimately in effect, assuming the alleged hypothesis is true in the first place. And it's no doubt to isolate exactly what's going on, not to mention defend a theory in the face of reasonably sparse data. Nonetheless, I'll be interested to hear what folks think about this.

das

Posts: 532
From: Bellevue, WA
Registered: Feb 2000 posted 03-16-2002 06:15 PM
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I think it probably has something to do with airline cost structures. Labor costs in Asia are much lower than in Europe, with the possible exception of Japan.

You'll see that premium fares to Australia are even more expensive than transatlantic.

Rudi

Posts: 11892
From: CH-3823 Wengen and CH-8142 Uitikon (ZHR)
Registered: posted 03-16-2002 09:43 PM
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on UA, LH, OS and AC discounted transatlantic fares in eco (and reduced 'grey market fares' in business too) are about 35% lower for trips starting in Europe compared with the trips with the same carriers, dates and flight-numbers starting in North America - go figure!

or, for the same dates and flights on LH, I often pay less in discounted eco flying return Zürich-Frankfurt-New York than only Zürich-Frankfurt!

OzFlyer

Posts: 34
From: Sydney, New South Wales, AU
Registered: Feb 2002 posted 03-17-2002 12:04 AM
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You will find that one of the main reasons is the strong USD against the weaker Asian and Pacific currencies. Thus they are not really cheaper, they just seem cheaper against the strong USD. If you look back some 2-3 years you will find that the actual fare has not really changed (save for inflation) BUT the value in REAL terms (ie in relation to the USD) has.

terenz

Posts: 3552
From: YVR USGP AAPLT KLRW HGPP HHGVIP
Registered: Nov 1999 posted 03-17-2002 07:15 AM
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Another factor is what the market will bear. It's the willingness of the buyers (U.S. companies, or U.S. subsidiaries of foreign companies) to pay the fares demanded. Fares from just north of the border are often much cheaper, even on the same airline and requiring the same changes of a/c.

Example (unrestricted BC fares):
SEA-LON on AA BC: USD 4,000 OW
YVR-LON on AA BC: USD 2,400 OW - 40% lower

BUF-LON on AA BC: USD 3,906 OW
YYZ-LON on AA BC: USD 2,120 OW - 46% lower

These airports of origin are less than 160 miles apart by road but are seperated by an international boundary.

If you compare premium fares ex-LON and ex-FRA (and other financial capitals in Europe), you'll find similar differences.

LAOCA

Posts: 488
From: DL: PM/MM; UA: Premier Exec; AA: 2M; CO: Gld; US: Gld; SPG: Plat; Hyatt: Diam; Avis: Chair
Registered: Apr 2001 posted 03-17-2002 08:27 AM
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It's more than where you originate. Intercontinental Pacific fares have long been far cheaper than Atlantic.
Japan excepted.

Look at some comparisons with similar mileage. I used UA but they're all about, if not the exact same:

SFO-SEL $3014 - $3586 depending on day of week

SFO-CDG $6560 (if D is available) - $7494 (regular C)

LAX-SIN $4200 - $55000 (again, day of week)

LAX-ATH $5300 (difficult to get D class only) - $7150 (regular C)

ORD-FRA $7,854


ORD-TPE $3,862 - $5086 (day of week

It's based on the competetive fare structure and demand.

[This message has been edited by LAOCA (edited 03-17-2002).]

cesco.g

Posts: 655
From:
Registered: Oct 1999 posted 03-17-2002 01:04 PM
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What's even more preplexing is the case of UA. According to well-informed source UAs PACIFIC (not Atlantic) division is the most profitable. Go figure!

das

Posts: 532
From: Bellevue, WA
Registered: Feb 2000 posted 03-17-2002 05:35 PM
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quote:
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Originally posted by cesco.g:
What's even more preplexing is the case of UA. According to well-informed source UAs PACIFIC (not Atlantic) division is the most profitable. Go figure!
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It's about traffic mix. Since flights to Asia and Australia/NZ are longer than Europe (in most cases), there is more paid C-class travel on the Pacific routes. Also I think less seasonality, less US flag competition, and more profitable cargo.