Originally Posted by
elgringito
How do you get "yes reward, you have given them cash to operate for a service that actually takes place in the future. How many businesses have that operating model". While I agree they have the cash in advance, they also have the commitment to provide the passenger with a seat at the price agreed upon, even if they end up oversold and must pay compensation for a volunteer that might exceed the price paid.
You seem to miss the concept - the airline pricing models evaluate load factors and determine how many seats to sell at what price and time. The consumer decides how much he is willing to pay, how important the timing is and decides to make a purchase at what THEY decide is the maximum benefit. BOTH parties make imperfect decisions - why should only the seller have to stick with the contract?
How many businesses actually do have a pay in advance of the service model? I am not sure. Yes, there are times we put down deposits, or pay for things like hotels in advance. But the airlines model is to capture revenue 100% in advance and quite frankly once they have your money even if they screw up royally there its pretty darn hard to get any $'s back. You might get other kinds of compensation but $'s rarely. Would you pay a contactor doing a remodel 100% in advance no matter how a cheap a price they quoted?
I totally get the ariline pricing model. I just don't agree that its logical and it is certainly far from consistent or transparent to consumers. Everyone knows that once a plane takes off with an empty seat no revenue from that seat can ever be realized for that flight. In maby businesses the closer it gets to that revenue producing item going unused the cheaper it gets, In airlines it gets more expensive. What makes a last minute fare really more expensive? In fact, if airlines were doing great job they would have no seats available on short notice. But they actually hold seats hoping someone will come along and pay more.