Thursday, July 13, 2023

Airfare pricing - Fair or unfair?

 This is one of those things that is more of a mystery than a black box. In general most goods and services are priced based on their cost plus the margin and that's what you pay for. IN dummy terms if i buy a $1000 TV, pretty much it cost the manufacturer less than that to make, sell, transport, advertise, etc.

But airline tickets don't work this way. The are priced dynamically to try to maximize profits irrespective of the cost of to provide the service. Why I say this? Well, here's an example:

Flying from San Diego to Dallas costs $300, but if instead I book a ticket from San Diego to Tampa which connects in Dallas might cost me $200. So i'm buying the same leg of the trip plus an extra one but paying less...Just don't do this if you check bags as your bags will go to where your ticket is going!

So this practice is something airlines scorn and have even sued people and companies for booking trips this way. Or if you are a frequent flier and abuse this loophole, your account might be terminated.

So is this fair?

I don't think so? When I pay for a service or a product, it's my prerogative as a customer to decide how or what of a service I use and it shouldn't be at the discretion of the one selling its service. To give you a few examples:

  • Hiring cable TV with the full package even thou i only plan on watching ten channels - It's my choice!
  • I go to Disney or any amusement park and get a full access with skip the line ticket but decide to only ride a few rides and never use the skip the line feature. It's my choice
  • I buy a train ticket  From point A to point B and decide to get off in a town in the middle because I felt like it!
And i can come up with dozen more examples. But for airlines, because they price certain routes higher to maximize profit, they don't want you to book empty legs to pay less and according to their nonsense this is breaking their contract of carriage....yes the same one that when they do something wrong you are in bad luck as they will tell you to sue them!

Personally I think most airlines have become so crap with their service and charge for everything that therefore why shouldn't I optimize my trips to pay the least no matter what they think!

And this way of booking tickets makes so much sense that there are even websites that focus on finding such fares: https://skiplagged.com/ (I'm in no way associated with them) that can help you save quite a bit of cash!

So would love to hear people thoughts on this!



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