Air Pricing Insanity
 

Consider: Search for lowest fare via Orbitz

NY to Montreal (668 miles RT) or
NY to London (6940 miles RT)

Dates:
Depart 12/11/02 (Wed.)
Return 12/17/02 (Tues.)
37-day advance purchase

LGA - YUL
Base fare - $158, taxes $38, fee $5 = 201

JFK - LHR
Base fare - $213, taxes $91, fee $5 = 309

United was cheapest for both.

Why is flying to Montreal, per mile, more than six times as expensive as flying to London??

Even calculating cost/mile on the base fare only, subtracting taxes and fees, the cost for flying to Montreal is even MORE expensive, 7.5 times as expensive.

What happened to economies of scale?...

[This message has been edited by anonplz (edited 11-04-2002).]

I take it this is in US Currency????

Oh, yes. Orbitz performs fare searches in US Dollars only.

Market forces. Supply and Demand.

Additionally, you're looking at a single fare with no idea what percentage of the seats on those routes go for that price. For a realistic comparison you need to compare yield (average fare paid per mile) for each route. As you know, the average often varies significantly from any single data point.

Setting aside the important element of yield/seat, the question is begged: why hasn't supply increased to take advantage of the apparently-great demand? Are these the types of situations airlines look at in deciding which destinations to add? Is there protectionism at work?

Dont know re YUL-NYC, but winter fares to London are always cheap and conversly summer fares to London are always not cheap. They typically cost 2X to 4X more in Summer.

MisterNice

London is always dirt cheap in the winter, this past weekend the weekend specials had it for $229, total round trip cost, all taxes included, from New York. Train to Washington and back costs more.

There is no rhyme or reason to airline fares, or else a flight from new York to London with the connection in San Francisco on both legs wouldn't cost less then round trip from new York to San Francisco.

One of the beauties is the cost isn't mileage based anymore, so there are some very good deals out there.

It is based on mileage when you look at the averages. There are significant variations in the individual examples but it all averages out when you look at all of the fares and all of the flights over a longer period of time. The trick is finding the variations in your favor and avoiding the rest.

Averages have nothing to do with specific flights. London is something like 40% more miles from me then San Diego is, and is usually considerably less money.

Somebody is actually looking for logic in air fare pricing?

It's based on all the above factors, plus more - such as:

- the degree to which flights tend to be a matter of choice. Florida is often cheap because vacationers who go there could go somewhere else instead. Flights that draw mostly business travelers tend to cost more per mile.

- overall demand on the route, which can allow airlines to use larger aircraft - reducing cost per mile, if they can fill them, in turn reinforcing lower pricing to attract passengers.

(As an example of the Florida effect, I recently flew BOS-SEA with no Saturday night stay. Connecting through Chicago westbound, AA's fare was $400 less via Orlando than with a BOS-ORD nonstop, with the same flight ORD-SEA. Go figure. (As a loyal FT'er, I took the savings and the miles.)

I've never got a satisfactory answer to why airlines in the UK (BA especially) always put on a long face when talking about short-haul flights, say they lose money on them, while Transatlantic flights are described as their money-spinners, post-9/11 blip apart.

It costs me MORE for a BA flight from London to Edinburgh (350 miles) return than it does from London to Miami return (4,000 miles)! Yet the crews do 4 sectors in a day on these internal flights. The load factor is often higher.

Of course not, that's why they're called averages.

If you average the yield on longer routes and compare to the average yield on shorter routes you will see the coorelation between distance and fare. When you look at a specific market, or even worse--a specific ticket, then you will have large differences in the per mile cost due to the specific supply/demand situtation in that market.