Originally Posted by Baeck
Thanks, brp, that is exactly my point. I don't have a problem at all with the theory of last-minute fare pricing. It's just that in this instance with the plane still half-empty, I don't see how they would expect to sell 50+ seats at those fares, especially on a Saturday! I think more moderate pricing would be beneficial for the passengers and AA, assuming AA is charging over the break-even point for its tickets.
I believe my point was lost. I was simply explaining the internal guts of Yield Management -- it is simply a seat allocation optimizer. To the best of my knowledge, AA doesn't have a tool to automatically lower PRICES on empty flights.
I had a hand in designing yield management algorithms at a couple of different airlines. Prices are considered fixed (at whatever levels the pricing analysts have set them). Yield Management changes the allocation of seats only.
What the OP is saying is that pricing needs to be more demand based and dynamic. There are ways to do this, but as far as I know, none of the airlines have adopted these dynamic pricing algorithms.