Tuesday, May 31, 2005

Airline pricing (il)logic

Just booked a trip to Australia with American Airlines. The fare with American was around $2,000 while the same trip with Qantas was nearly $3,000 i.e. 50% more expensive. Here's the crazy thing. My American flight is actually operated by Qantas (who have the only direct service to Brisbane). It's the same seat on the same plane with the same ticket conditions, but a wildly different cost depending on who sells it.

If Qantas can sell the seat to American at a price which allows them to sell it to me for $2,000 (profitably I presume, although that's a dangerous assumption with any US carrier) then why can't they sell it direct to me for $2,000?

When Winston Churchill described the Soviet Union as a riddle wrapped in a mystery inside an enigma, he could have added "but less mysterious than the logic of airline pricing".

No comments: