(posted by MagMile)
<< JS,

I didn't mean to suggest that the walkup v. 3 week advance wasn't essentially price discrimination. I think it clearly fits the spirit of price discrimination. What I really meant to suggest was that the higher price for direct v. connecting flights was also essentially price discrimination. I would think the cost of providing connecting service would be higher, but it's sometimes priced less b/c there are people willing to pay the premium for flying direct. >>

Yes, the cost of providing a connection instead of non-stop is higher (although that becomes a moot point if you look at the whole network of a hub-and-spoke). However, it's still supply and demand, not discriminatory. The airline supplies a certain number of non-stop seats and a certain number of connecting seats. Those seats are inherently different (as opposed to timing differences for advance purchase and Sat. night stay.)

Because the demand for non-stop is higher than the demand for connecting seats (per available seat in the respective itineraries), the resulting non-stop price is higher. Although, you could increase the supply of non-stop seats to make the prices the same or even on opposite sides.


<< The full fare tickets are, in some sense, of higher quality. They don't require you to plan in advance (and are also fully refundable, although that's perhaps a different issue). >>

True, refundability does make the ticket worth more to the passenger. However, many (most?) people don't buy full fare tickets just because they don't like to make plans. Rather, people who need to fly on short notice have no choice other than to pay the walk-up fare. Refundability is just a freebie in that case.



[This message has been edited by JS (edited 08-02-2001).]