Why in the World!

Oct 07 2011 Why in the World! BY admin TAGS Fares

 

wingsdollars1Valeri sends us this via Twitter: "Why in the world is it $1500 2 fly 2 Chicago but only $500 to go thru Chicago 2 practically any other city?? Robbery!"

We feel your pain Valeri! You've discovered an aspect of airline economics that I call, "The Business Person Catcha." It works like this... Airlines have historically tended to charge more for two kinds of trips: one-way trips, and two-way trips that do not involve a connecting airport. This second example is the kind of trip you're talking about. Why do the airlines do this? Because trips with these sorts of itineraries are frequently booked at the last minute by business people. Airlines know they're much more likely to pay more $$$. Sometimes savvy frequent flyers try to beat the game.

Here's an example... Suppose someone wants to fly from Springfield to Chicago. Instead of buying that expensive ticket, they buy a ticket for Cleveland that connects through Chicago. When they reach Chicago, they just don't bother with the connecting flight to Cleveland. It sounds like a good way to beat the system, but it frequently doesn't work. When our savvy flyer tries to fly back to Springfield, from Chicago, the airline won't let them on the plane without a ticket change fee. Those fees can be very expensive--easily more than a hundred bucks. What gives? It has to do with what the airlines call, "non-sequential use of ticket segments." If you really want to dive into it, type that phrase into Google. The subject will give you a headache...

To read more generally on this subject, and the Business Person Catcha, try these stories from the New York Times and Los Angeles Times.

FOLLOW-UP, OCTOBER 8, 2011

Valeri responds: "Small biz loses again. Boo. But, I can fly 2 ORD from any other airport around here for $1000 less. Who's fault airport or airline? I just want 2 know who I voice my concern to. The airport and its airlines will suffer because we're all switching to Branson."

Airlines set fares, not airports. Why do fares tend to be higher in Springfield? There are several reasons. Begin with a fact: Springfield is a small air market. Here are some more reasons:

  • Fares tend to be higher in small markets and cheaper in big markets. Remember the economic law of supply and demand? Small air markets have a small supply of seats. Big markets (like Tulsa, Kansas City and StL) have a bigger supply.
  • A bigger supply of seats generally means lower fares.
  • In bigger markets airlines have more competition. Example: three airlines fly to Denver from Kansas City: Southwest, United and Frontier. The competition forces those Denver fares down. Only one airline flies from Springfield to Denver: United. Since it has a monopoly on the Springfield/Denver route, it charges higher fares.

Why are fares sometimes lower at the Branson airport? Since it's a very small air market, shouldn't fares always be higher? The Branson airport is privately owned. As a private business, it has the ability to pay the airlines to fly to Branson. Since the airlines in Branson are being paid to fly there, they can charge a lower fare. The payment from the airport makes up the difference. The Springfield airport, and the bigger airports mentioned here, are publicly owned. It's illegal for publicly owned airports to pay for airline service.

The Branson airport says it's the only privately owned airport in the country with commercial air service. It is, if you will, a grand experiment. If it wasn't paying the airlines, the airlines wouldn't be there; it wouldn't make airline economic sense. Those are the bottom line answers to your questions. I realize you may not care why...you just want lower fares. It you don't know about them already, I'd suggest checking out some tips for finding lower fares. You can find them on the airport website, or try these from Farecompare.

 

0 Comment(s)