NY Times analysis - Fair and Unfair fares

Discussion in 'General Discussion | Travel' started by dkelly1110, Apr 6, 2011.  |  Print Topic

  1. dkelly1110
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    dkelly1110 Silver Member

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    A very interesting read from NY Times resident numbers guy/analyst Nate Silver (formerly of Five Thirty Eight and Baseball Prospectus). He did a regression analysis of "fair" and "unfair" fares from a large number of markets with several factors - distance, size of operations, competition (perhaps a notable lack thereof) and legacy/LCC.

    The easy takeaway is that CO seems "relatively" expensive and is able to overcharge at its megahubs (and hublet) - IAH and EWR take the top 2 spots with CLE in 6th. Moreover, vacation destinations tend to be the most discounted airports to fly from - not a huge surprise considering the fare wars that arise from time to time.

    Link to full article including lots of pretty charts.

    The full alphabetical list of relative markup by airport.

    Discuss...
     
  2. Wandering Aramean
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    Wandering Aramean Gold Member

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    His "factors" leave a lot to be desired. He starts with the statement that fares probably should be based on distance traveled, which is simply not true. From there he moves on to suggest that connections are just as good as non-stop flights from a value perspective, again not the reality of the industry either from the passenger or the airline side of things.

    Competition drives down prices. Larger metropolitan areas and leisure destinations increase the opportunity for competition. These are the metrics that demonstrate fare trending, not the airports in question.

    Sortof disappointing that someone who is so strong on stats managed to insult everyone else for making bad assumptions in their analysis of the data and then repeat their mistake of bad assumptions, too.

    Read my rebuttal here: http://boardingarea.com/blogs/thewa...-ny-times-got-it-so-wrong-on-airline-pricing/.
     
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  3. Steven Schwartz
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    Steven Schwartz Gold Member

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    Here's a personal situation.

    About two and a half weeks ago, a friend who had tickets to the Wednesday Practice round at the Masters discovered he could not go. My business partner and I got the tickets.

    Went to Continental.com for two tickets, Newark to Atlanta - down on Tuesday and back on Wednesday night. Cheapest ticket was $680 - and there were lots of empty seats.

    We flew down on Delta from LaGuardia. Cost was under $250. Total pain in the butt - but how do you square that kind of difference?

    To me, it's the reason why I feel no remorse over working the system to my advantage in terms of points and credit cards! And even tho a Gold with CO, absolutely no loyalty to them.

    BTW, it was GREAT!
     
  4. Wandering Aramean
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    Wandering Aramean Gold Member

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    I take the cheaper flight. I've also found that DL doesn't always differentiate between EWR and LGA in their pricing.

    Or you can explain it as has been all along - competition. AirTran gave up their gates and slots at EWR so now the only competitors on the route are DL and COUA. They can decide to have a 3-day minimum stay for cheaper fares and screw the leisure passenger if they think that's worth more to them. Having seats available for that last-minute walk-up fare could be worth more money to the company than selling all the seats at a discount. In other words, if they sold one seat on the flights you were looking at they came out ahead of Delta who sold two for a combined lower gross revenue. Maybe they will sell it and maybe they won't, but they have the data and we don't so they probably know what they're doing just a little bit, right?

    And in either case the pricing isn't really based on the distance traveled, is it?
     

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