Erratic Rev. Management by go!
 

I recently booked a o/w go! ticket as per the counseling of my SO to try it out.

Well, we locked in a HNL-KOA fare at $46 o/w per person. I saw that same flight go up to $59 o/w...

Today it's back down to $39 o/w.

Okay... Rev management at Mesa must be having a field day with their pricing. But, I just thought it should be known that after analyzing these fares for a few days across AQ, HA and go!, go! seems to be most erratic in the pricing of flights. :mad:

The person who does their rev mgt used to post a lot on airliners.net and I'll shoot him an email - he was on my buddy list before he cancelled his account.

And this is particularly surprising for a new airline trying to gain market share! Or are you complaining that you paid $7 too much??? :rolleyes: :rolleyes: :rolleyes:

Good grief! I paid $90 more than I had to because Alaska Airlines lowered their fares! For $90, I have a right to be upset. If it had only been $7, I would have been ecstatic!

Please re-read my post above. I'm not complaining about the change in $7. My complaint is as follows: "But, I just thought it should be known that after analyzing these fares for a few days across AQ, HA and go!, go! seems to be most erratic in the pricing of flights."

That said, for an airline that is trying to gain market share, for an airline that is claiming to "help" the islands people, for an airline that wants to bring $39 fares to the interisland market, changing fares so erraticaly, in my very humble opinion, is not "cool".

If you have a further beef with me on this issue, I suggest we take it up via PM.

Interisland flight pricing has been very stable in the past because of the lack of competition in the market. HA and AQ divvied up the market when they had the antitrust exemption, and then appeared (to me, at least) not to be aggressively competing for each other's market share. This caused prices to be stable (at a high level). It would not be surprising if this led to a more conservative mindset, and more conservative algorithms, in their yield management area.

Mainland airlines can be pretty aggressive. On my last flight to Hawaii, the flight was pricing out over $700. One day, it showed up on Travelocity for $450. I went to AA.com to check it there, it was still $700. I double-checked my dates, then checked again on AA.com, and it was down to $450. I bought it. 45 minutes later, it was up to over $600, and in the three months between buying and flying I never saw it below $600 again.

Nobody on Flyertalk seems to understand the ins and outs of yield management, and why they seem to do these things. This is just one area of many where lack of competition has enabled HQ and AQ to continue to do things in their old way, rather than implementing the reforms that mainland airlines have had to put in over the last 25 years. If they are to survive, I think they will have to catch up in the next two years or so, and that will be a pretty difficult task.

You said that you analyzed fares across the three airlines for a few days, and that HA and AQ were more stable. At what price were HA and AQ stable?

You may have a point here. If the lawsuit against go! by Hawaiian is true and if go! was privy to Hawaiian's trade secrets, shouldn't we expect at least go! to be using the same types of algorithms, at least partially? In any case, good point.
Yes, I completely understand. And, www.farecompare.com can show you just how volatile the Mainland-Hawaii fares can be. I've had fares jump almost $300 on me, right before booking! :eek:
Now I will partially disagree, in my humble opinion. And, let me say that you will completely disagree with me. Anti-trust agreements ended years ago, and I'm sure AQ and HA are "stuck in their ways". But, being "stuck in their ways" seems less like we're being screwed. For the poor grandma in Waimanalo who booked a $59 fare on go!, only to see it go down to $39, $29.
$46. It seemed that the cheapest fare classes weren't added as the dates became closer. As opposed to go! who zeroed out cheap flight classes, then added inventory again.

Well, I guess I don't consider it such a bad thing. Granny in Waimanalo probably checked HA and AQ as well as go!, so she booked at $46 anyway (pretty savvy, those grannies). That's why yield management had to lower the fare from $59 to $39. . Now, granny's booking again, and booking go! at $39.

Stuck in their ways may seem less like we're being screwed, but it isn't what airlines need to do to promote long-term profitability. And long-term profitability is what all airlines need, to keep us from being really screwed. And the point I was making about mainland fare volatility was that this is how modern airlines maximize revenue (that's why they call it the "Yield Management" department, not the "stable prices for granny" department.

I re-read your post several times before I posted. I honestly thought that you were complaining about the $7 more that you paid. Sorry that I mis-understood your post. :(

The bold comments in your response indicate that you are concerned with the erratic nature of go!'s fares. I can actually address that. Basically, AQ and HA have plenty of historical data by which they can forecast and optimize their allocation of seats to fare classes. When they observe changes in demand, they can "tweak" the allocation of seats.

On the other hand, go! has very little historical data to work with. Therefore, their optimization and allocation are being done on the fly with a lot of human intervention. The appearance is that things are changing constantly (which they are). That is the dynamic of having a new entrant in the market!

I hope that this explanation helps. I actually have both academic (Ph.D) and several years of airline industry experience in yield managment. I no longer work in the airline industry (hence formeraa) and am happy to try to answer yield managment questions.