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It's "explained" in the article. Trips from one large hub to another are in high demand, so the price is high. Trips from a large hub to a small place are in lo
by tgv 3y ago
It's "explained" in the article. Trips from one large hub to another are in high demand, so the price is high. Trips from a large hub to a small place are in low demand, so the price is lower. The main defense is "the pricing model is complex."
But it's clear for all to see that it's nonsense. First, complexity is no defense for anything. Second, the resource utilization is strictly higher in the skiplag case: the demand on the first leg is the same, so demand can't be justification either.
If the price for a multi-leg trip can be lower, that must be because the earnings on the second part of the trip outweigh the loss on the first part. That would also mean the single leg passengers are subsidizing the remaining legs.
- khuey 3y agoIt's simpler than that. AA offers an inferior product for flying from Jacksonville to New York City, because they don't have the non-stop flights that their competitors do. So they have to discount their flights to be competitive. Meanwhile AA is the only airline flying non-stop from Jacksonville to Charlotte. They offer the best product there, and charge accordingly. Products aren't priced according to their cost to produce, they're priced according to what the market is willing to pay for.
- tgv 3y ago> they're priced according to what the market is willing to pay for. Wouldn't then the skip-lagged price be the asking price?
- solarkraft 3y agoNo, because the market would (allegedly) pay more if the option didn't exist. Which is why they're trying so hard to stop people from doing it.