You Paid What for That Flight? Decoding Airline Ticket Prices – WSJ analyzes

August 26, 2010 at 4:12 pm

(Source: Wall Street Journal)

It Can Cost More to Fly to Hartford Than Barcelona. What Airlines Consider in Setting Prices.  I have always wondered about this issue.  And am glad that someone is trying to answer this.

MIDSEAT

Image Courtesy: WSJ.com

Airline ticket prices often seem like a brain-teaser with little logic. From Chicago, a flight to Miami is more than twice as far as a flight to Memphis, but the shorter Memphis flight costs 25% more on average. Fly to Washington, D.C., from Hartford, Conn., and the average fare is nearly three times as high as if you flew to nearby Baltimore from Hartford, according to government data for the first quarter of this year.

The fares travelers pay typically have little relation to how far you fly, even though airline costs are largely dependent on the length of a flight. Long trips often cost less than short trips. Flights of the same time and distance can have radically different prices.
The price you pay for a ticket is driven by a number of variables: competition, types of passengers, the route and operating costs. But the biggest factor, by far, is whether discount airlines fly in a market. Low-cost carriers often set the price in markets because competitors feel compelled to match that price or risk losing customers and flying empty seats. And when they aren’t there, big airlines behave radically differently when setting prices.
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