|Quoting Ckfred (reply 11):|
Now with reasonable walk-up fares, the yield for passengers who tend to travel on short notice ought to go up.
Yield will go down. Though they will make up for that by attracting more passengers and better competing with lowfare carriers, so revenue and profits will go up.
For example, let's say the old walk-up fare for MIA
was 1,200$, and two people bought it, but another eight went to jetBlue to save the money and get their walk-up fare (299$). Now, let's say AA
offers a walk-up fare for 349$ on MIA
. Still more than jetBlue, but a walk-up fare traveler is not that price sensitive, so the eight passengers that would have gone to jetBlue to save money, will pay the premium to fly MIA
So instead of selling $2,400 in tickets to two passengers, AA
now sold $3,490 in tickets to ten passengers and stole from the compieition.
Also, keep in mind the new lower MIA
fares are only valid on flights to domestic cities (excluding San Juan, St. Thomas, and St. Croix), Toronto, and Montreal. They are still charging very high walk-up fares for international business markets, like London, Maracaibo, and even Nassau, which has always been the main revenue source of the MIA