Film-Tech Forum ARCHIVE: weird airline fares

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Posted by Scott Norwood (Member # 30) on 10-08-2010, 12:27 PM:

I will be visiting my grandmother for her 90th birthday this December, driving to Indianapolis with family and probably returning home via air.

Here is what I came up with on various travel web sites:

12/28/2010 one way IND to BOS -- cheapest fare is $142.40 on Airtran 159/817 via BWI
12/28/2010 one way IND to BOS -- cheapest nonstop fare is $356 on Delta 5958
12/28/2010 one way IND to JFK -- cheapest fare is $100.40 on Delta 5958/4258 via BOS

What the hell? There must be some reason why Delta would structure its fares this way, but would would two flights be 1/3 of one flight?

I am tempted to buy a ticket for the last option (IND->JFK via BOS) and just not take the second segment. My only concern with doing this is that the airline would then have an obligation to get me to JFK, not BOS, and any sort of weather disruption or other flight cancellation would likely lead to a different route, and would probably not get me to BOS. I'm not averse to renting a car at JFK and driving to BOS if necessary, but that would sort of defeat the purpose of getting the nonstop flight and would more than erase the cost savings vs. the Airtran route through BWI.

Thoughts?

Posted by Gordon McLeod (Member # 33) on 10-08-2010, 12:30 PM:

I see that a lot up here often because of capacity on certain routes that is not being utilized to the max

Posted by Sam D. Chavez (Member # 1841) on 10-08-2010, 01:05 PM:

It's all about predatory pricing against a competitor like Southwest.

You can jump off the fight in Boston if it's a one way ticket and you have no checked luggage. They have no way to "punish" you unless it's a round trip.

Posted by Bill Gabel (Member # 1105) on 10-08-2010, 01:10 PM:

The news media has reported the airfares are going to be higher this holiday season. And there are less seats availible. So book soon if you need that price. The Embraer 175 that Delta flights that route with only seats 68 people.

Posted by Scott Norwood (Member # 30) on 10-08-2010, 02:07 PM:

Now, I am curious about how airlines make any money (I suppose that history would indicate that many don't). I know that we have some people here who either are or were involved in that industry. Please tell me what about the following set of assumptions is wrong:

Cost of plane: per the Embraer web site, the cost of a new EMB175 is $37 million. Assuming a 20 year lifespan, that is about $5k/day for the aircraft. Assume 50% of purchase price for maintenance, etc. Cost per day for the plane is $7500.

Cost of fuel: per the Embraer web site, the EMB175 holds 20k pounds of jet fuel. This is about 6 lbs./gallon and about $4/gallon. Fuel capacity is roughly 3000 gallons, plus reserves, etc. Range of plane is 2000 nautical miles. Cost per nautical mile is about $6/nm.

Top speed is .82M. Assume that average cruse speed is about 500 knots. Fuel cost per hour is therefore about $3k.

Assume 8 flights per day, with an average length of 1.5 hours. Plane cost per flight is about $925 and fuel cost is about $4500 for a total of about $5500 per flight.

Assume 80% average load (54 passengers). Cost per passenger per flight is almost exactly $100.

This is just for the plane and fuel. It does not include the pilots, the stewardesses, airport fees, other fees, other employees (except, perhaps, maintenance), ticketing, insurance, scheduling, weather delays, advertising, customer service, etc. This must total at least another $100/passenger/flight.

So, just using round numbers and some wild-ass guesses, the average ticket price for a flight on one of these planes would need to be in the $150-250 range just to break even.

Presumably larger planes are cheaper per passenger to fly, but airlines seem to be moving in the other direction. In the '80s, I did BOS-IND many times on American or United; they would fly a DC-10 or 767 (or, occasionally, a 727-200) from BOS to ORD and a DC-9 or 727 from ORD to IND. Now, everyone is flying regional jets or, at most, 737s for these types of flights. I'm sure that traffic has changed on this route, but it's rare to see a widebody aircraft on a domestic route now.

Posted by Paul Goulet (Member # 297) on 10-08-2010, 02:38 PM:

See how much it would be to fly into/out of Providence, RI (PVD)

Posted by Adam Martin (Member # 641) on 10-08-2010, 03:15 PM:

One way airlines keep fares low is to hedge pricing for fuel. This means that an airline will sign a fuel pricing contract when it thinks the price is as low as it will go, "locking in" that price and reaping the benefit of their low-priced contract as fuel prices rise over time. If they guess wrong and prices go down, they lose. If they guess right and prices go up, they win and can keep fares lower than their competitors.

Theater circuits often do the same thing with popcorn oil.

Southwest and AirTran are both discount carriers. Between fuel price hedging and no-frills flights, they can keep fares low.

Southwest is purchasing AirTran, by the way.

Posted by Mark Hajducki (Member # 1732) on 10-08-2010, 04:32 PM:

Airline fares are not directly related to the cost of running the flight, instead they price at what they think the customer will pay.

An example of this is a flight from Edinburgh to Paris, with Air France in mid November. This would cost GBP 101 if bought with a return flight the next week. If bought as a single way it would cost GBP 581 for the same flight (admittedly they force you to go business class [a seat the same size nearer the front of the aircraft with a airline meal]).

An aggressively low cost, Irish based, airline will offer a flight from Edinburgh to an airport 53 miles from Paris will charge GBP 8 on the same day (excluding bag/food, surcharges payable if a pre-paid Mastercard is not used and online check in not used) Since they have to pay the UK government GBP 10 per passenger as a departure tax, as well as some money to the airport they must be loosing money on that ticket. The ticket price will increase towards the date of the flight.

Posted by Rachel Craven (Member # 1016) on 10-10-2010, 09:12 PM:

Check into flying into NH also, I know my brother always used to fly out of Portsmouth when he was going to MI (he goes often to see family). You would think a small airport would be more expensive but a lot of times it was significantly cheaper for him to fly in that way.

Honestly, out of the flights you have, I would take the first option. I know you said you wouldn't mind renting a car from JFK if needed but if it did come down to that you would have been better off taking AirTran to Boston and saving money that way. I have used AirTran many times from BOS to PNS (Pensacola) and have had no problems with them (no cancelled flights, late flights, etc) but the seats are a little smaller then Delta if that is an issue for you (I know I hate it!). Still... all airline seats are tiny unless you go first class! =)

Posted by Chris Slycord (Member # 4239) on 10-10-2010, 10:49 PM:

quote: Rachel Craven
Check into flying into NH also, I know my brother always used to fly out of Portsmouth when he was going to MI (he goes often to see family). You would think a small airport would be more expensive but a lot of times it was significantly cheaper for him to fly in that way.

I've usually found the opposite. When I tried going to Des Moines, it was close to $1000 yet all the bigger airports within 3-4 hour drive from there were about half that.

But yes, looking around for stuff nearby definitely helps.

Posted by Richard Hamilton (Member # 321) on 10-10-2010, 10:51 PM:

I've never really understood how a one way ticket costs more. My last trip to China was booked by the company in China I was doing work for. They bought me a one way ticket, around $2500-$3000. They didn't know how long I wanted to stay, so they bought my return ticket a couple days before I left, they also never know if I will leave [Big Grin]

. I think I worked 3 mornings at the amusement park, and had a couple meetings with the president of the company, I stayed for 4 weeks [beer]

I have bought round trip tickets before on the same flights for around $700.
Rick

Posted by Scott Norwood (Member # 30) on 10-11-2010, 09:42 AM:

I ended up going with the IND->JFK option. I acutally got the date wrong originally; I'm booked for 12/29, not 12/28, but the fares and schedules are the same.

I figure that there is maybe a 10% (max.) chance that something will get cancelled or rescheduled and I will end up at JFK instead of BOS, and that there are plenty of ways to get from JFK to BOS for under $200. Therefore, the expected value of the trip is $120, which is still cheaper than the Airtran option. Plus, if all goes well, I get the nonstop flight to BOS and can get to my day job that morning, rather than take the day off. I am not much of a gambler, but I will do it in cases like this where the expected value is positive and the risk of loss is minimal.

I did look at PVD and MHT, but those fares were in line with the Airtran flight to BOS. Plus, I'll be leaving my car on the street near my apartment, and travel from either PVD or MHT to my neighborhood won't be as easy and cheap as taking the MBTA from BOS.

I also looked at Amtrak, but the only way to do that is to go through Washington DC, which is time consuming and expensive.

Posted by Chris Slycord (Member # 4239) on 10-11-2010, 05:55 PM:

quote: Richard Hamilton
I've never really understood how a one way ticket costs more.

The airlines know that the vast majority of people getting one-way tickets are doing so because they absolutely NEED to get to the place in question on that date (and often do it last minute).

Put another way: The airlines can do it and the people who want them are willing to pay.