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Thread: For what reason is O&D so profitable for airlines?
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Old Dec 18, 2006 | 9:02 am
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iahphx
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A connecting flight is a commodity, that usually goes for a lower price; a non-stop is a premium product folks will pay more for. Factor in that you can usually charge more per-mile on a shorter trip, and you can see why airlines like O/D traffic.

For instance, let's say you're a pax flying from MIA to LAX. You might be happy to buy a $228 roundtrip ticket on CO with a connection at IAH. But CO could sell one budget traveller a $178 ticket from MIA to IAH, and another traveller a $198 ticket from IAH to LAX.

Do the math, and you'll see why O/D traffic is the "holy grail" or airline beancounters. And explains why a hub at ORD -- with more local traffic -- is more valuable than a hub at CLE.
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