Lunacy of airline pricing

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Capetonian

Lunacy of airline pricing

#1 Post by Capetonian » Sat Sep 05, 2015 6:46 am

There doesn't seem to be a more appropriate forum for this so I'll post it here as others might find it interesting.

Note received from a friend who travels a few times a year to Lagos and generally starts/ends his journey in Nice. Although he knows it's a lousy airline, he's decided that Iberia best suits him as it's a logical route and fast, avoiding going north to LON and then south again.

For my next trip to Nigeria I looked at my usual route NCE-MAD-LOS on 20 Oct and LOS-MAD-NCE on 3 Nov.
Price for return trip Business Class on the Iberia website € 3536.

I needed to check the days on which MAD-LOS operates, and looked on Skyscanner as the easiest way to scan the dates. I was astonished to see that all flights from Madrid to Lagos were a maximum € 1700 regardless of which airline was used (Iberia direct but KLM, BA, etc via connection). These same flights were all around € 3500 if the journey started and finished in London or Nice instead of Madrid.

So I decided to split my trip on Iberia into two separate bookings. MAD-LOS-MAD in Business which I was able to get for € 1285.

And NCE-MAD-NCE in Economy (it’s not worth paying for Business as the seat is exactly the same). I got this ticket for € 137.

So I’ve paid only € 1422 for the journey which would otherwise have cost € 3500 and the only inconvenience is having to collect my bag and check in again while connecting at Madrid. I can cope with that for a saving of € 2000+ !

And in the course of my research, I also encountered the fact that a one-way economy ticket from Nice to Madrid costs twice as much as a return.

This airline fare business defies logic ! Have I missed something ?


My reply to him :

In essence it’s down to yield management and promoting traffic over routes which would otherwise not be filled profitably. What’s odd in this case is that it’s normally over indirect routes, e..g a NCE LON CPT LON NCE on BA would cost less than flying LON CPT LON on the same BA flights. Last time I checked this the LON-CPT-LON was £1200, but NCE LON CPT LON NCE was €900.

I am surprised that it’s worked in your favour this time, I can only assume that IB have very little Spain originating traffic going to LOS, or it’s an ‘error’ fare.

I checked your figures and they are exactly as on the GDS. The ‘I’ class that you got on the MAD LOS MAD segments now shows full on those dates, although their website might show different availability as they could keep back seats for sale through internal channels which they don’t release to agents/other airlines. They are supposed to have ‘full content’ on Amadeus and show the same availability, but the fact is that they don’t. All the airlines do the same as they can identify the point of enquiry and show what they call ‘dynamic’ availability. That’s a euphemism for ‘discriminatory’.

You might not have to check/recheck in MAD. The system does allow through check where it is the same carrier even on 2 separate tickets, but the check-in agents will sometimes refuse to do it (or think they can’t) and there is a logical reason for that. If you purchase two separate tickets to undercut a published fare, you are on two different and unrelated contracts and should your inbound flight be delayed and you can’t make the connection, you have no recourse to the airline at all. That’s not to say they won’t assist you and rebook you, but they are under no obligation to do so. This is one of the ways that Low Cost Carriers keep costs down, by cutting out connections and the consequent costs to them, although that is changing.

For a saving of €2000+ it’s worth the risk.

This airline fare business defies logic ! YES

Have I missed something ? No, but you are thinking logically! Don’t


I used to work in revenue management and although I understand it, I find it very hard to justify the logic! The airline's interest and that of the passenger are of course conflictive.

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Re: Lunacy of airline pricing

#2 Post by admin » Sat Sep 05, 2015 7:10 am

Capetonian wrote:There doesn't seem to be a more appropriate forum for this so I'll post it here as others might find it interesting.


The individual choice of forum titles and their placement is entirely up for challenge by anyone so inclined. They were my first crack at it and I can change anything and everything around in their entirity should those here so wish. Just say the word. If anyone wants to suggest a wholly different layout, and there is support for it then I will make it so.

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Re: Lunacy of airline pricing

#3 Post by Capetonian » Sat Sep 05, 2015 7:26 am

Perhaps a forum for 'air travel', or just 'travel tips'?

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Re: Lunacy of airline pricing

#4 Post by flynverted » Sat Sep 05, 2015 8:29 am

An oldie but goody

If airlines sold paint...


Customer: Hi. How much is your paint?

Clerk: Well sir, that depends on a lot of things.

Customer: Can’t you give me an approximate price?

Clerk: Our lowest price is our introductory special at $12 a gallon. After that we have dozens of different prices up to $199.

Customer: What’s the difference in the quality of the paint?

Clerk: Oh, there’s no difference. It’s all exactly the same stuff.

Customer: Well, in that case I’ll take your $12 paint.

Clerk: Well actually the $12 variety is only available on our website. If you want to buy it here at the store you’ll be charged an additional $20 Customer Convenience Fee

Customer: So if I go home and get it off the website, its only $12?

Clerk: That’s correct sir – plus a Credit Card Usage Fee of $6 and then there’s standard Shipping and Handling of $15.

Customer: What? So in other words buying online would cost me almost exactly the same as what I’d have to pay here in the store?

Clerk: I suppose so, but if you buy it here you get to use it immediately. Online purchases take ten business days to get to you – unless you pay the optional $25 Express My Paint Fee.

Customer: You’ve got to be kidding me!

Clerk: Well no sir, but it’s academic anyway as right now the $12 paint is completely sold out in both places.

Customer: That’s BS. I’m looking at shelves full of the stuff!

Clerk: Ah, but that doesn’t mean it’s available for sale. We sell only a certain number of introductory priced cans on any given day. Oops, look at that! It just became available again – at $17.50.

Customer: C’mon! You mean to say it went up while I’m standing here?!

Clerk: ‘Fraid so. Inventory control changes our prices all the time.

I strongly recommend you purchase your paint as soon as possible as it could go up again. How many gallons do you want?

Customer: Well, maybe three gallons. No, make that four, I don’t want to run out. I assume I can return anything I don’t open?

Clerk: Certainly sir. The $12 paint is non-refundable, but if you return it within 48 hours you will be entitled to a $5 credit towards the future purchase of another gallon of the same color at the same or higher price.

Customer: That’s crazy. In that case I’ll just give any unopened cans to my brother as he’s planning to repaint his home soon.

Clerk: Sorry sir, no-can-do! Our terms and CANditions – that’s a little in-house joke – prohibit paint transfer. It is strictly for the use of the original purchaser.

Customer: But wait a minute, I hadn’t spotted those “Paint Sale – $9.99* a Can” signs over there? That sounds like a much better deal.

Clerk: Ah yes, that’s from our low cost paint division. The asterisk denotes that the cans are actually half-gallons and the price is based on a minimum purchase of two. There is also an additional Environmental Fee of $5 per can, a non-refundable Can Deposit of $3.50, a Paint Facility Charge of $5 and if you want more than one color, the second has a $25 surcharge and the third is $50 extra.

Customer: This is utterly ridiculous. To hell with this! I’ll buy what I need somewhere else!

Clerk: Well sir, you may be able to buy paint for some rooms from another store, but you won’t be able to find paint for your connecting hall and stairway anywhere but here. And I should also point out that if you want Uni-Directional paint it is priced at $249 a gallon.

Customer: I thought your most expensive paint was $199!

Clerk: That’s only if you paint non-stop all the way around the room and back to the point at which you started. Stairways and hallways are considered one-way exceptions to the rule.

Customer: So, if I buy the $199 paint and use it in my hallway what are you going to do about it – send some goons in to paint over it?

Clerk: Wow, I believe you’re getting it now sir. But no, please, that would be plain silly. We’ll simply charge you a Direction Adjustment Fee plus the difference to $249 on your next purchase.

Customer: Next purchase? No way! I’m out ‘a here

Clerk: At Skyhigh Paints we never forget you have a choice, so thanks for shopping with us. Have a nice day!

Sound at all familiar?

Sisemen

Re: Lunacy of airline pricing

#5 Post by Sisemen » Sat Sep 05, 2015 8:34 am

Somewhere on the interwebby there is a good, and funny, analogy of buying paint the way that airlines charge for seats.

Added: in my haste I was about to post the above when, hey presto!, the system says "that's already been posted. Do you really want to look a dick and post this?" Well, not in quite those words but ..... it would seem we've got us a beaut system here. And invaluable for the Friday Joke page :D

Capetonian

Re: Lunacy of airline pricing

#6 Post by Capetonian » Sat Sep 05, 2015 8:57 am

That 'paintshop' skit that you posted has been updated compared to the original one which I used to use as an introduction to RM/Yield Management courses I used to run. I have a version of it somewhere on a CD which a colleague and I acted out together, it was a bit like the Two Ronnies 'Four Candles' sketch.
If I find the CD I'll see if I can find a way of uploading to YouPorn or something similar and putting a link to it!

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Re: Lunacy of airline pricing

#7 Post by flynverted » Sat Sep 05, 2015 9:01 am

Thanks, Cape, I've not seen the updated version...

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Re: Lunacy of airline pricing

#8 Post by Capetonian » Sat Sep 05, 2015 9:35 am

Sorry, flynverted, I wasn't very clear.
The version you posted is the updated version!

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Re: Lunacy of airline pricing

#9 Post by flynverted » Sat Sep 05, 2015 9:40 am

No worries! I took it that you had.an updated version... my bad...

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Re: Lunacy of airline pricing

#10 Post by probes » Sat Sep 05, 2015 10:25 am

That’s only if you paint non-stop all the way around the room... :ymapplause: 8-}


P.S the layout is very good - not too much on the forum board index, that's good.

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