BobPatterson wrote:What constitutes "predatory pricing" in your usage of the term?
Introductory low price to get established on a route?
Below cost pricing and, if so, for how long a period?
Who was the predator in your 2014 example, DL or B6? What were the initial and ultimate prices?
RushmoreAir wrote:Additionally, remember that local fares are not as highly correlated with average segment fare as you might think, especially with legacies since they use O&D-level revenue management systems (where a fare offered on AAA-BBB-CCC is not simply the sum of available fares on AAA-BBB + BBB-CCC). Legacies also have a much higher percentage of connecting passengers that may be subsidizing a lower local fare (to compete against LCC/ULCC entrant offering a low local fare), thus raising the average segment fare above true segment cost, and that even is excluding upline and downline network revenue contributions. This makes determining whether airlines are "pricing below cost" quite difficult (but it sounds as if you already recognize this, props to you).
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