> "What's the actual cost in terms of fuel, service, and occupied seating?" I have some familiarity with airline pricing... and the answer is... very close to

> "What's the actual cost in terms of fuel, service, and occupied seating?" I have some familiarity with airline pricing... and the answer is... very close to the retail price of said flight. Seriously, there's a good reason why airlines are always teetering near bankruptcy. Their margins are lower than even cut-rate retail. Slightly OT, but it's also the reason why Hipmunk doesn't stand a chance in the long run unless they branch out into selling, well, things that aren't flights. The margins for resellers is practically non-existent. > "and since first class is rarely full" Ah, but first class is almost always full. Few people who fly in first actually pay for first-class fare. First class, in its modern incarnation, is more of a loyalty tool than an actual product. How many business travelers do you see in First nowadays? And how many work for companies that would actually pay for a First-class fare? Not too many. Airlines use first class seats to curry loyalty from frequent flyers, along with alliance benefits for frequent international travelers.