Topic Author
Posts: 1433
Joined: Tue Jul 13, 1999 1:55 pm

The Only Way You Can Raise Domestic Revenues...

Fri Mar 26, 2004 4:37 am seems to be via a value-based pricing system/fare structure.

The LCCs with their simplified fare structures have been seeing their yields and average fares rise (especially jetBlue), while the exact opposite has been happening to the network carriers.

As strange as it seems, more and more, people are willing to "pay more and search less for assurance of a reasonable (sub $300) fare".

Often, people will be willing to pay $150 each way for a midcon trip on Southwest even when a little searching on Orbitz or other price-comparison travel sites can provide a network carrier fare of $200 RT on an equivalent flight. People value the reliability of LCC fare structures!

no wire hangers!
Posts: 12442
Joined: Thu Jan 29, 2004 1:24 pm

RE: The Only Way You Can Raise Domestic Revenues...

Fri Mar 26, 2004 4:54 am

A number of years ago, AA tried to have a 4 tier pricing program - well, it didn't last long. Even WN has many fares for the same flight - go to their website. The major airlines have fares based in the time/city/phase of the moon the previous day rather than a simplified program with reasonable top fares like some LLC's. Don't forget too that the cheapest fares on the majors are for selected flight/days with low usual yeilds and booked well ahead of time. Even then sometimes you can luck out with a cheap price at the last minute with a major, but rarely. LLC's have lower, more reasonable top fares, and often offer 7 or 14 days or more bookings at lower prices from their top fare. Many people don't have the time or patience to go looking for the cheapest fare but will accept a reasonable fare if the time or frequency of the flights, quality of service is reasonable too. Majors with their complicated fare structures have their place too, if one is traveling to/from a smaller market or not directly served by an airline in their base.