Originally Posted by
JimInOhio
That's one way to look at it but not necessarily the only way. If this $1059 revenue flyer reserves an E+ seat, that's potentially one less E+ seat that a $20K flyer won't be able to choose and, maybe, decides to take DL for that trip. Which would UA rather have taking that flight?
It's the only logical way based on sound economic reasoning.
Unless United mgmt is a lot stupider than I imagine, they price that empty seat to account for the probability of a high-paying customer buying it at the last minute. Maybe filling the seat 5 times with a discount flyer is worth forgoing the possibility of someone paying full price for it -- or maybe it's 8 times. The point is there is some ratio, which United undoubtedly knows, and prices for. As long as MR is higher than MC, the guy who fills that seat has some value to United, no matter what the price is. This is econ 101.