Airline Fares (long) - Posted by Reif

Posted by Robert McNeely on May 06, 1999 at 20:56:31:

As for the best prices, I have used “TRAVELOCITY.COM”. They will provide flight bookings starting with the lowest prices. Check it out.

Airline Fares (long) - Posted by Reif

Posted by Reif on May 06, 1999 at 20:34:13:

Lonnie posted a piece about his frustration with airline fares and the seemingly random and inconsistent pricing.

Since I’ve gotten a lot of good stuff from you guys, but can’t REALLY reciprocate yet because I’m still a newbie, let me help with something I DO know a little about.

Lonnie wrote:

“Here?s what Delta Airlines charges for a round trip ticket to Atlanta. . . . And some of the other Airline?s are even more ridiculous, plus they fly you all over the country to get you to Atlanta, a distance of 500 miles from Norfolk. At least Delta has a direct flight.”

The reality of the current airline industry is, with the rapidly growing exception of Southwest Airlines, ‘hub and spoke.’ In other words, airlines bring passengers from little airports, throught the ‘hubs,’ everyone switches airplanes, and then the planes go back to the littler aiports again. This is so the airlines can serve more ‘city pairs’ than they ever could on a bunch of non stops. As most probably know, Delta’s main hub is in Atlanta, so if you are going there, that is most likely going to be the easiest carrier to get a non stop on, unless you live in another carrier’s hub (United: Chicago; American: Dallas, Chicago and Miami; USAir: Charlotte and Philadelphia, Northwest: Detroit, Minneapolis, and Memphis).

As far as the ‘crazy’ fares go, there really is method to the madness, but it is tough for the public to see, but it is operated on a principle we all use every day - supply and demand.

The reality is, what you see as the same seat (the one next to you in coach) is NOT really the same seat - because it is a perishable commodity. Once that plane leaves the gate, that seat can no longer be sold.

Let’s look at a typical flight.

If you book well in advance, the fares are the cheapest, because there are many seats available, and the airline knows you have a lot of different airlines that you might choose at that time. However, for a given flight, there are only a certain amount of these seats available, becasue the airline knows (from historical data) that last minute flyers will take up a certain amount of the seats - and those folks (typically business travellers) are willing to pay a much higher price for the flexibility to make their plans at a later time.

Compounding all of this coonfusion, of course, is the connections. In other words, they might have a cheap fare available, say from Norfolk to Atlanta, but if you’re traveling on to Phoenix maybe they only have more expensive fares left on that leg.

Believe it or not, that’s the short story. It all comes down to supply and demand, and what is the most yield the airline can get out of each seat. Of course it seems chaotic to the traveling public, but it really does come down to the fact that all seats are NOT equal - even though they are right next to each other on the same flight.

Anyway, that’s a little insight. It doesn’t make things any better, I understand, but maybe it’s a little easier knowing that it’s not an insane system - probably.

One last item:

"Delta…couch fare $130. First class $994 ($864 more).

Another thought comes to mind. If you pay $864 extra to ride in the front of the plane, how much is that flight really costing you? Let?s run some numbers and see. If you invested that $864 in something that pays 15% return, you would have $3,836 in 10 years, .$17,034 in 20 years, and $75,635in 30 years. I don?t know about you, but nobody can pamper me that much in 3.5 hours."

Lonnie’s numbers are well taken, but here’s another point of view. In his book, “Swim with the Sharks without Getting Eaten Alive” Harvey Mackay (great author by the way)recommends flying first class ALL the time - because that’s the type of people you meet. For instance, say for your extra $800 you meet a rich doctor who’s been looking for some place to park his extra $500,000, because the stock market is too risky. Think you might be able to generate $800 dollars worth of deals with that kind of investor?

Hope this helps,