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Idea For Domestic Fare Structure?  
User currently offlineMayor From United States of America, joined Mar 2008, 10376 posts, RR: 14
Posted (6 years 2 months 2 weeks 6 days 10 hours ago) and read 1678 times:

I've had this idea for awhile and I may have mentioned it on here before but I don't recall any comments on it.

To simplify the fare structure, domestically in the U.S., why not do it like cargo is done, on a zone basis? The map of the U.S. is divided into zones and the fares would be from one zone to another. The airlines could figure out what fare was needed to cover the costs and go from there. The only problem I see is that the airlines could be accused of collusion. If that problem could be solved, it certainly would help the customers. If each airline set its own fares using this method, I don't see how collusion could come into it.


Ideas?


"A committee is a group of the unprepared, appointed by the unwilling, to do the unnecessary"----Fred Allen
8 replies: All unread, jump to last
 
User currently offlineIkramerica From United States of America, joined May 2005, 21503 posts, RR: 60
Reply 1, posted (6 years 2 months 2 weeks 6 days 10 hours ago) and read 1657 times:

Because markets are based on supply and demand? Things like package freight are a bit different because there, you have 3 nearly perfect competitors, all serving EVERYONE from EVERYWHERE. This isn't the case in aviation.


Of all the things to worry about... the Wookie has no pants.
User currently offlineLAXintl From United States of America, joined May 2000, 25059 posts, RR: 46
Reply 2, posted (6 years 2 months 2 weeks 6 days 10 hours ago) and read 1612 times:

AA (and DL to a lesser extent) tried such pricing. Simply did not work.

Besides the fact that for it to work every airline must match the pricing, such zone concept throws out the window the whole idea of specific market competition.
For example LAX-JFK which is competitive market where $300rt fares still rule might now be priced at $600, while a LGA-BOS shuttle flight which today can derive the same $300 becomes a $100rt market. It would basically change the entire supply/demand pricing elasticity and I doubt it would really benefit either the consumer or airline at the end.



From the desert to the sea, to all of Southern California
User currently offlineMayor From United States of America, joined Mar 2008, 10376 posts, RR: 14
Reply 3, posted (6 years 2 months 2 weeks 6 days 9 hours ago) and read 1565 times:



Quoting Ikramerica (Reply 1):

I'm not even considering FedEx, UPS or DHL. DL and most of the other airlines have used a zone system for years for cargo rates. Most of the time, the airlines don't even try to compete with those three as there's enough cargo to go around.

I just thought it might be the time to think outside the box. If you wanted, you could have even more zones than cargo uses, which I think is about seven. Instead of the west coast being one zone it could be divided into two. California could be one zone, by itself.

It certainly would make it easier for the customers if it was simplified.



"A committee is a group of the unprepared, appointed by the unwilling, to do the unnecessary"----Fred Allen
User currently offlineTxAgKuwait From United States of America, joined Aug 1999, 1803 posts, RR: 42
Reply 4, posted (6 years 2 months 2 weeks 6 days 9 hours ago) and read 1413 times:

Actually, to a great extent, WN does this. In general, the further the trip, the higher the fare.

If I had time I would pull all the nonstop and one-stop markets they sell and graph distance vs price....you would see a very close correlation. This is true for their "average fare" and for their unrestricted fare.

If you were to go to southwest.com and look at their full-Y pricing.....you would probably notice the fares are not dirt cheap but neither do they cause people to think "Oh My God". You see some $100-$120 nonstops at the low end, rising from that to roughly $364 on the high end. Northing at all like a BNA-ATL trip for $1000.

Yes, it makes sense, and it does work, which is exactly why the legacy carriers won't do it. It's something that WN does, and God knows the legacy carriers would rather be liquidated in a chapter 7 bankruptcy proceeding before they would emulate Southwest. Well, maybe they'll get their chance.


User currently offlineAAJFKSJUBKLYN From United States of America, joined Jul 2007, 904 posts, RR: 1
Reply 5, posted (6 years 2 months 2 weeks 6 days 8 hours ago) and read 1325 times:

As comparison, the current pricing for July airfares JFK-LAX on AA are riding about $508 for the cheapest flight!! Normally this was a $308 flight. Approximately a $200 increase in 6 months.

User currently offlineLeskova From Germany, joined Oct 2003, 6075 posts, RR: 70
Reply 6, posted (6 years 2 months 2 weeks 6 days 8 hours ago) and read 1276 times:



Quoting Mayor (Reply 3):
It certainly would make it easier for the customers if it was simplified.

It would make it simpler for the customer, that's true.

But that's not what airfares are there for: their purpose if to enable the airline to get whatever they can get (as Ikramerica said - supply and demand) for a route.

Quoting AAJFKSJUBKLYN (Reply 5):
As comparison, the current pricing for July airfares JFK-LAX on AA are riding about $508 for the cheapest flight!! Normally this was a $308 flight. Approximately a $200 increase in 6 months.

Sure that you're really looking at the fares that AA offers? Or are you looking at what's currently available on AA's website?



Smile - it confuses people!
User currently offlineIkramerica From United States of America, joined May 2005, 21503 posts, RR: 60
Reply 7, posted (6 years 2 months 2 weeks 6 days 6 hours ago) and read 1229 times:



Quoting Mayor (Reply 3):
I just thought it might be the time to think outside the box.

This is not outside the box. This has already been done, to a certain degree, by the CAB, and abandoned.

I'm pretty sure you are old enough to remember that time, no?



Of all the things to worry about... the Wookie has no pants.
User currently offlineMayor From United States of America, joined Mar 2008, 10376 posts, RR: 14
Reply 8, posted (6 years 2 months 2 weeks 6 days 6 hours ago) and read 1219 times:



Quoting Ikramerica (Reply 7):
I'm pretty sure you are old enough to remember that time, no?

Oh, yeah.....but I didn't realize the CAB set fares by zones. I thought it was done on a market by market basis.



"A committee is a group of the unprepared, appointed by the unwilling, to do the unnecessary"----Fred Allen
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