Longer distance = less expensive (occasionally)
Feb 7, 2019, 5:26 pm
#1
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Longer distance = less expensive (occasionally)
In a particularly interesting twist sifting through east coast airports, I noticed United July 16 18:45 BDL-ORD-SFO being $60 less expensive on Orbitz that the BDL-ORD alone. I think there’s a term for airlines sometimes pricing it this way.
Feb 7, 2019, 5:36 pm
#2
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Nothing really surprising here. United thinks they can charge more/there is more demand to fly from BDL-ORD. Many airlines can get you from BDL to SFO with one stop. Less can get you from BDL to ORD nonstop.
Feb 7, 2019, 6:21 pm
#4
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This is and has been true on UA and almost every other carrier worldwide for 50+ years. Not only not new, it is old.
Prices are based on demand. WAS-NYC routinely costs more than WAS-LON.
Prices are based on demand. WAS-NYC routinely costs more than WAS-LON.
Feb 7, 2019, 6:54 pm
#5
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One simple way to put it: Airlines (unlike many other industries) don’t use a “cost plus” model to price airfare.
They figured a long, long, long time ago that they could make more money dynamically pricing the way they do: based on demand, competition within each market, etc.
We all do ourselves a favor when we stop thinking that airlines price like almost everyone else. Much easier that way.
They figured a long, long, long time ago that they could make more money dynamically pricing the way they do: based on demand, competition within each market, etc.
We all do ourselves a favor when we stop thinking that airlines price like almost everyone else. Much easier that way.
Feb 7, 2019, 9:01 pm
#7
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This is an example of "price discrimination" which is explained in almost every introductory microeconomics textbook. It occurs because the demand for BDL-ORD-SFO travel is more sensitive to price than that for BDL-ORD travel. This could be because, as has been suggested above, there more alternatives on the former route or because the former route is more leisure travel while the latter is more business travel. The seller must be able to prevent buying in the lowered priced market and selling in the higher priced market hence the prohibition on hidden city ticketing. Many apparent quirks in airline pricing behavior can be explained as price discrimination.
Feb 7, 2019, 9:33 pm
#8
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I would replace "occasionally" in the title with "often" or "usually", particularly on domestic itineraries.
Feb 8, 2019, 2:30 pm
#10
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This is an example of "price discrimination" which is explained in almost every introductory microeconomics textbook. It occurs because the demand for BDL-ORD-SFO travel is more sensitive to price than that for BDL-ORD travel. This could be because, as has been suggested above, there more alternatives on the former route or because the former route is more leisure travel while the latter is more business travel. The seller must be able to prevent buying in the lowered priced market and selling in the higher priced market hence the prohibition on hidden city ticketing. Many apparent quirks in airline pricing behavior can be explained as price discrimination.
Feb 8, 2019, 2:57 pm
#12
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Feb 8, 2019, 3:14 pm
#13
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The product is the same as the BDL-ORD flight is being offered at different prices to two different groups - those who want to stop at ORD and those who want to continue to SFO - having different price elasticities of demand. It's text book price discrimination.
Feb 8, 2019, 7:41 pm
#14
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different, market is BDL-SFO which includes a flight that happens to include the same BDL-SFO leg but is a totally diffent itin.
Feb 8, 2019, 9:05 pm
#15
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