Tchiowa

It's called LPO and you better believe they track it. It's not on the P&L but many track it in the GL.

drsmithy

What's the "price" of providing a service ? It's a made up number with only a passing relevance to anything that matters. Surely you mean the "cost".

I'm not measuring the value of air travel in terms of anything except what the customer is prepared to pay and the airline prepared to offer. Which is, as capitalists do like to remind us, all that matters.

Er, yes ? Note that this applies equally whether I consume 10%, 100%, or 110% of an advertised service.

If I book a 2hr massage and leave at the 91 minute mark, and that happens to work out cheaper than booking a 30 minute + 60 minute massage because of a pricing structure quirk, then I have done nothing wrong.

No, I'm not. Especially when one service is functionally a subset of the other.

It's not theft of anything. There is no loss incurred. There is no usage of resources that would not otherwise have occurred. There is no impact to the provider. The complete opposite is happening in this example - the airline now has more resources available than it expected to.

drsmithy

That's what I expected.

I'm sure they're "tracking" it - any business would. But I bet they're not claiming those faux losses as real losses when the taxman comes knocking.

LHR/MEL/Europe FF

I agree with parts of that from a theory standpoint - but it just doesn't work in a practical sense.

If an airline can get $500 A->B and $500 B->C and fill their planes at those prices, why on earth would it hold back some of those high-priced seats to sell A->B->C for just $300? It is taking a $700 loss in revenue for what reason?

That makes absolutely no sense for shareholders. And I suspect therefore the airlines can't really sell the tickets individually for $500, it has spare seats, and is selling them at whatever it can to fill the plane.

sethb

That's not the way accounting works.

If someone is walking to my store to buy a $500 item (on which I get a profit of $200) and you hit him with your car so he buys nothing, I claims the loss of a $500 sale with $200 in profit; but for accounting purposes, nothing shows up. (If I can prove those facts, I can sue you for that amount and expect to win.)

drsmithy

So, to be clear, on your tax return you will claim a loss against your business revenue, based on a transaction you thought was going to take place but actually didn't ?

I would be fascinated to read about any successful execution of the above strategy.

LondonElite

I think you are confused by thinking that AAA to BBB is a subset of the service AAA to CCC via BBB you've bought. It's not, it's a completely different service.

drsmithy

Not to the customer.

Do the A-B and A-B-C services use different aircraft for A-B ?

nsx

Upton Sinclair explained the principle at work in this thread as follows: "It is difficult to get a man to understand something when his salary depends on his not understanding it."

Tchiowa

No. But you track it and it affects planning.

It's called "Detrimental Reliance" and it a commonly successful tort.

Let's sum up. Original question was:

What to do when airline warned me about numerous throw-away ticketing?

Best answer is:

Stop doing it.

LHR/MEL/Europe FF

given the extended debate on how hidden city pricing works, and the complete lack of an example of being able to recreate a similar model in everyday life (pet store, pizza shop, bundles of wood, you name it), i am thinking this is an almost unique example related to airline transport. Something artificial which financial gurus try to explain away with concepts and theories and models.

given these concepts, theories and models have more generally got this world into the total financial mess it is today, I don't really place much weight on a guru telling me there is some model to validily explain why an airline would lose revenue just to allow connecting passengers the opportunity to fly via a hub instead of direct.

if the airline could sell seats at a higher price they would. they are only selling hidden city tickets cause they can't fill the plane any other way. they are getting the fare they asked for, and if you don't fly it, they have lost nothing.

at least that's my lay view of things in the absence of any concept, model or theory from a finance guru that really can't explain anything beyond 'it is just because it is'.

the best an airline seems to be able to come up with is 'it's not ethical', but they haven't provided any proof as to why not. or what their loss is. or anything else.

contractual breach? maybe technically. but damages? well, let 'em take it to court and find out once and for all.

LondonElite

Then the customer is not reading the rules of the service he just bought very carefully.

The aircraft they use is irrelevant. We know you can get off, it's just not what you've agreed to pay for!

drsmithy

I take it, then, you think there are a lot of people posting in this thread who work for airlines ?

nsx

No, just people who expect to profit from future use of hidden city tickets. If they can keep themselves from understanding the airlines' position, they can feel good about gaming the system rather than guilty about defrauding the airlines. That was Sinclair's point.

I'm not sanctimonious about it: I've used a hidden city ticket myself! But I do understand the airlines' rationale.

IMHO the airlines' position makes sense if you grant that the airlines are free to price trips in ways we customers perceive as illogical.

drsmithy

I'm sure you do.

But that's not an actual loss, anymore than your predictions for how many people will fly on your airline are actual revenue.

So after consulting dr google, I got this hit:
http://legal-dictionary.thefreedicti...ental+reliance

None of the examples here seem relevant or applicable.

I am waiting for an example where someone has made an assumption of a purchase with neither verbal agreement nor written contract, then claimed that purchase not proceeding as an actual loss of revenue.

No, best answer is:

Keep doing it until they take an action, then decide whether or not to continue based on that action. If that action is something like withholding points, then fair enough. If that action is cancelling a frequent flyer account including loss of previously accrued points and benefits, then I'd argue there's probably a case to be made against the airline. If that action is charging you after the fact for a different fare, then call up your credit card company and have it reversed.