Trying to understand nonsensical pricing

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Old Feb 22, 19, 12:58 pm
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Trying to understand nonsensical pricing

A to Hub routing costs $200
Hub to C routing costs $500
A to C (routing through Hub) costs $1400.

genuinely curious if this is a bug or if there is a rationale for this pricing. Had some issue with this maybe 6-7years ago, but suddenly am noticing it to be occurring much more frequently...specifically when trying to book international routes. Obviously if I have to connect to arrive in (say) Hong Kong, I want the airline to acknowledge contractually that my end destination in HKG, in case my flight to the hub is delayed, but not sure its worth doubling the ticket price.
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Old Feb 22, 19, 1:08 pm
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Airlines do not build prices by summing segment prices or even by the cost/expense of providing transportation. They price a trip from an origin to a destination and then set prices based on competition, the supply/ demand and what they think they can get to maximize profits -- value-based pricing.

Trying to understand the "logic" without access to market data is not possible and will just frustrate oneself. If you can get a better price and are comfortable with the conditions of that fare, go for it.
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Old Feb 22, 19, 1:10 pm
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There is no rationale for airline ticket pricing. They do it because they can. If they figure out that the market can bear a higher price for a ticket from A to B compared to a ticket from A to C via B, then they will charge more for A to B than A to C via B. Sometimes the married segments are cheaper than a single flight to or from the hub. That's what this website was developed for https://skiplagged.com/ and why Lufthansa sued a passenger for using this strategy https://www.vox.com/the-goods/2019/2...city-ticketing

This means, of course, that you can book A to C via B, and if you don't check any bags, you can leave the airport at B and ditch the segment from B to C, but be aware that this may violate the CoC and if you use a FF account, you may have your privileges suspended if you do it too often. You can also book A to B and B to C on separate tickets, although if your A to B flight is delayed, I'm not sure what responsiblity the airline would have in making sure you can get to C (if it's separate airlines, you're definitely SOL, if it's the same airline, you MAY have better luck).
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Old Feb 22, 19, 1:21 pm
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Trying to rationalize airline pricing is the epitome of a fool's errand.
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Old Feb 22, 19, 1:45 pm
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Originally Posted by pruss2ny View Post
genuinely curious if this is a bug or if there is a rationale for this pricing..
It's not a bug. It's specifically because they don't want you to be able to combine the lower fares like that. They presumably have low-cost competition from A to Hub and from Hub to C, but they don't have any from A to C.
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Old Feb 22, 19, 1:50 pm
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Actually the pricing is quite rational. Fares are priced based on supply and demand, not cost. UA's pricing algorithm will attempt to set the price at the highest point the market will bear. And in markets where UA has pricing power (in this case, A-C), they exploit it.
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Old Feb 22, 19, 1:57 pm
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What you're hitting on is the fact that UA seems to be publishing more and more "non-combinable" fares, or more correctly, fares that don't allow "end-on-end" ticketing - especially in premium cabins, but also in economy.

In many situations, even if what you described existed then you could still purchase a ticket from A to C via HUB, and it would price as the combination of the A-H and H-C fares - even when all booked on one ticket. However if either (or both) of the fares contain the condition that they do not allow "end-on-end" ticketing then you can't do this, and the price will jump up to the higher fare.

The only real workaround is to buy two tickets, and take the risks that entails, especially if something goes wrong. United does handle multi-ticket situations better than many airlines, but officially you're still relying on unpublished rules if something goes off the rails...
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Old Feb 22, 19, 1:58 pm
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Originally Posted by STS-134 View Post
There is no rationale for airline ticket pricing...
There is absolutely a rationale to airline ticket pricing. Our “rational” is not the airlines’ “rational”.
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Old Feb 22, 19, 2:47 pm
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Another thread on the revelation that pricing is not based on a per mile cost?

In addition to the above threads, large carriers also use pricing not only to meet, but to drive consumer demand.

OP has not provided his route, but with the route, there may well be a clear economic reason for the pricing he is seeing.
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Old Feb 22, 19, 3:31 pm
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"OP has not provided his route, but with the route, there may well be a clear economic reason for the pricing he is seeing."

so using sfo-icn as the base fare (~ $600)
I quickly ran thru a number of cities on west coast, routing thru sfo to icn...each of these cities cost +/- $200 for a one way eco fare to sfo.

i guess predictable:
flights starting out of LAX/SEA were ~ $700 to get to ICN
flights out of Boise/SLC/Sacramento/PDX/Eugene were $1200-$1400, even though individual legs priced out to ~$750.

So i guess i shouldn't be surprised that smaller market venues get the thru ticket priced high, but a quick search of competing fares certainly shows ample capacity for someone in PDX or SMF (and to a lesser extent SLC) to find a $700-800 fare on a competing airline
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Old Feb 22, 19, 4:16 pm
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If both the tickets are on UA you should book them separately. I have never had an issue with checking bags through or getting reaccomodated due to delayed flights even on separate tickets. For your peace of mind look for ~3hrs to connect at the hub if one of the legs is international.
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Old Feb 22, 19, 4:33 pm
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It's about supply and demand, competition, and other market factors, not some cost-plus scheme.

They may compete with different nonstop competitors A-hub and hub-C, but face limited competition A-C. Or they have the A-C traffic sewn up with corporate deals that get a big % off, and aren't so concerned about the other traffic.

I disagree with the posters who say it's irrational; it's quite rational, there are a ton of PhDs minted on the topic of airfare pricing, it's just that the rationale is opaque to you.
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Old Feb 22, 19, 5:07 pm
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"Or they have the A-C traffic sewn up with corporate deals that get a big % off, and aren't so concerned about the other traffic."

ok. of course. that makes a ton of sense.
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Old Feb 22, 19, 5:09 pm
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Also think of A-C pairs where pretty much all the traffic is government and their contractors. The government has a GSA rate, but the contractors will pay whatever the market rate is (subject to their corporate discount) so there's motive to make it high, and there may not be a lot of other, price-sensitive customers on the route.

Also I think there's a lot of market testing going on.
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Old Feb 22, 19, 5:28 pm
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right...in this example, pdx-icn, there is likely pretty fixed demand (as well as limited competition). its not as though they'd sell 30% more seats if they discounted fares by x%. so as long as they can lock up a solid share of the fixed demand through corporate sales, which is sold at a discount to posted rate, there is clear incentive to keep posted rate on higher side.
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