This is Just Nuts

Scott en Aztl=E1n wrote:
On 13 Jan 2005 06:46:30 -0800, "js"
wrote:

Scott - Note this from the article:

"One reason is that advanced purchase roundtrip fares come with so
many
restrictions....The one-way fare, on the other hand, is completely
unrestricted."

Re-read my original post. I'm not talking about advance purchase
round
trip fares; I'm talking about fares for flying the next day.

What is it about the word "restrictions" that you didn't get?

The two tickets are not the same

The only possible difference might be the restriction/refundability.

and that makes the price different. Congratulations, you finally
caught on

However, if I'm booking a flight for TOMORROW, It's unlikely that my
plans will need to change between now and the time my flight leaves.
Not too much risk considering the savings.

Fine - then take the risk and buy a non-refundable one-way ticket.

That is market economics. You pay for the convenience and risk
reduction. As a consumer - you can do what you want. Don't begrudge
the seller the same flexibility.

js

"Scott en Aztlán" wrote in message
...
Airfare pricing policies
are driven by one goal: to maximize the profitability of
the airline.

In this case, it isn't working.

Perhaps; unless you have access to the accounts of
the airline in question, I'm not certain what you would be
basing that conclusion on.

Bob M.

Scott en Aztl=E1n wrote:
On Tue, 11 Jan 2005 10:25:33 -0700, "Bob Myers"
wrote:

Call me naive, just makes no sense at all to me.

OK, you're naive. :-) Why would you think that this
SHOULD make sense to you?

As a scientist, I believe everything (with the possible exception of
the Female Mind) has a rational explanation.

Airfare pricing policies
are driven by one goal: to maximize the profitability of
the airline.

In this case, it isn't working.

How do you know? Remember, profits is what's left after revenues are
used to pay costs. Imagine a single price policy and each ticket sells
for $1. What do you think would happen to profits?


The article on elliott.org mentioned earlier says that the higher
prices on one-way tickets are meant to gouge business travellers, who
need flexibility and usually don't make advance purchases.

Refundable tickets are intended to serve that segment of the market
that requires flexibility in planning travel. It just happens that
business travelers fit that model more so than non-business travelers.
When I go to a conference I know my schedule weeks or even months ahead
of time. When I'm called to consult, I may have just a few hours to
plan the trip and little idea how long I might be gone. I don't see it
as gouging - it's just good business sense. You have a product that's
valuable and you charge for it.

However,
the two NWA fares I quoted were both for a flight the following day.
What's to stop the savvy business traveller (or, in my case, the
short-notice leisure traveller who is flying to purchase an
automobile
in another state, and thus only needs a one-way ticket) from
purchasing a round-trip ticket and simply throwing the return portion
away? How does this increase profits for Northwest?

Other than the Contract of Carriage, not much. In the case of NW, they
are no worse off than had they offered the one-way at the same price as
the round trip.

Are you the same guy trying to defraud the State of California for
sales tax on a new car?

Chuck

Scott en Aztl=E1n wrote:
On Tue, 11 Jan 2005 10:25:33 -0700, "Bob Myers"
wrote:

Call me naive, just makes no sense at all to me.

OK, you're naive. :-) Why would you think that this
SHOULD make sense to you?

As a scientist, I believe everything (with the possible exception of
the Female Mind) has a rational explanation.

Airfare pricing policies
are driven by one goal: to maximize the profitability of
the airline.

In this case, it isn't working.

How do you know? Remember, profits is what's left after revenues are
used to pay costs. Imagine a single price policy and each ticket sells
for $1. What do you think would happen to profits?


The article on elliott.org mentioned earlier says that the higher
prices on one-way tickets are meant to gouge business travellers, who
need flexibility and usually don't make advance purchases.

Refundable tickets are intended to serve that segment of the market
that requires flexibility in planning travel. It just happens that
business travelers fit that model more so than non-business travelers.
When I go to a conference I know my schedule weeks or even months ahead
of time. When I'm called to consult, I may have just a few hours to
plan the trip and little idea how long I might be gone. I don't see it
as gouging - it's just good business sense. You have a product that's
valuable and you charge for it.

However,
the two NWA fares I quoted were both for a flight the following day.
What's to stop the savvy business traveller (or, in my case, the
short-notice leisure traveller who is flying to purchase an
automobile
in another state, and thus only needs a one-way ticket) from
purchasing a round-trip ticket and simply throwing the return portion
away? How does this increase profits for Northwest?

Other than the Contract of Carriage, not much. In the case of NW, they
are no worse off than had they offered the one-way at the same price as
the round trip.

Are you the same guy trying to defraud the State of California for
sales tax on a new car?

Chuck

"Scott en Aztlán" wrote in message
...

The one-way ticket costs about $200 more than the round-trip ticket.
If I buy the round trip ticket and throw the second half away, that's
about $200 less profit that the airline made from me - not counting
the possible opportunity costs from flying the second plane with my
seat empty.

Which says nothing at all about the effect the policy
in general has on the overall profitability of the airline.

Bob M.

Scott en Aztl=E1n wrote:
On 13 Jan 2005 12:41:23 -0800, "js"
wrote:

So you're suggesting that demand is higher for one-way tickets?

Yes - actually it is - that is - the price sensitivity of DEMAND
(slope
of the demand function), not the quantity demanded at a particular
price. Try consulting even the most basic economics text. Being
naive
is not the same as being too lazy to learn.

And being too lazy to learn is not the same thing as suffering from
second-order ignorance. But thanks for your charitable interpretation
of the situation.

Again, I'm obviously quite naive. I've flown on business many
times,
but never on a one-way ticket. Don't most businesspeople want to
come
back home at some point? So why don't they just purchase
full-fare,
refundable/changeable round trip tickets? That's what I always do
when
I travel on business...

And the price of those is....twice that of a one way.

Re-read the post that started this thread, and you'll see that your
assertion is incorrect.

One more time for the second order impaireds - the price of a fully
flexible refundable one way ticket is one half that of a roundtrip
fully refundable and flexible ticket. Booking class Y (and often B on
NW). And, just as an aside, if you buy a Y or B, on NW and a number of
other airlines, your are entitled, on a space available basis, to a FC
upgrade. Try that with your H ticket.

When you compare the price of a fully flexible and refundable one way
ticket with a discounted non-refundable penalty to change round trip
and suggest that they are the same thing at different prices...well,
what else is there to say?

js

Scott en Aztl=E1n wrote:
On 13 Jan 2005 12:41:23 -0800, "js"
wrote:

So you're suggesting that demand is higher for one-way tickets?

Yes - actually it is - that is - the price sensitivity of DEMAND
(slope
of the demand function), not the quantity demanded at a particular
price. Try consulting even the most basic economics text. Being
naive
is not the same as being too lazy to learn.

And being too lazy to learn is not the same thing as suffering from
second-order ignorance. But thanks for your charitable interpretation
of the situation.

Again, I'm obviously quite naive. I've flown on business many
times,
but never on a one-way ticket. Don't most businesspeople want to
come
back home at some point? So why don't they just purchase
full-fare,
refundable/changeable round trip tickets? That's what I always do
when
I travel on business...

And the price of those is....twice that of a one way.

Re-read the post that started this thread, and you'll see that your
assertion is incorrect.

One more time for the second order impaireds - the price of a fully
flexible refundable one way ticket is one half that of a roundtrip
fully refundable and flexible ticket. Booking class Y (and often B on
NW). And, just as an aside, if you buy a Y or B, on NW and a number of
other airlines, your are entitled, on a space available basis, to a FC
upgrade. Try that with your H ticket.

When you compare the price of a fully flexible and refundable one way
ticket with a discounted non-refundable penalty to change round trip
and suggest that they are the same thing at different prices...well,
what else is there to say?

js

That's the reason for the discount - for some segments of the market,
the restrictions matter.

Are we done yet?

js

Its even simplier - the airline can earn 600 additional profit by
selling your seat on the outbound when you miss the outbound because
you got caught in traffic or you change your mind. That's the
tradeoff. You sacrifice flexibility and refundability and get a
discounted ticket. No risk to the airline for your no show - they
have your money.

js

Its even simplier - the airline can earn 600 additional profit by
selling your seat on the outbound when you miss the outbound because
you got caught in traffic or you change your mind. That's the
tradeoff. You sacrifice flexibility and refundability and get a
discounted ticket. No risk to the airline for your no show - they
have your money.

js