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Old Aug 19, 2017 | 10:27 am
  #12  
Sixth Freedom
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Originally Posted by rt112
In general pricing in the aviation market (and many others) isn't based on the cost of providing the service/product, but on the price supported by the market.
Forgive me for sounding big-headed, but I am a bit of an expert on all-things related to pricing as it is my day job. I have advised airlines, professional service firms, financial institutions, retailers and software houses.

The statement above is actually something of a myth and would be better written as "in general pricing in the aviation market (and many others) isn't based on the cost of providing the service/product, but on the price that a biased and prejudiced committee made up of pricing specialists, sales people, marketing chaps and assorted others believe is the price supported by the market".

Why does this matter? After ten years experience (on 1st September) pricing for airlines I can say with confidence that no airline, even BA, actually prices anywhere close to optimally. Most likely there is no really good reason for the prices observed that would stand unsullied by serious scrutiny.

Important point: This does not mean the people handling pricing are bad at their jobs, it just means that they (being human) come to different conclusions based on a huge amount of available information and the difficulties inherent in taking decisions by committee - if the pricing levels were flipped over so ex-YTO was cheaper than ex-LON, both teams would still be reaching a decision that could be considered 'correct'.

---EDITED TO ADD---

So to specifically answer the OP's question, there is no really good reason - it is what it is

Last edited by Sixth Freedom; Aug 19, 2017 at 10:36 am
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