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Why do airlines do this? Simple. Because they can. Isn't capitalism wonderful? Pretending that "competition" is at work in the airline industry and assuming it will result in the most efficient distribution of resources. Wages from pilots to baggage handlers are falling hard but travellers, interests are still nicely protected by "free market forces" and "competition."
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Super,
Where are you coming from?
I fly almost every week and usually book my own tickets. Airline pricing is actually pretty sensible all around (except that I feel that several heavily traveled routes are actually UNDER priced – if the flight is always booked, chances are they could have charged a little more for that route).
What looks like crazy pricing makes a little more sense if you think about it:
The reason nearly last minute tickets are expensive is obvious - If your schedule were flexible, you would have purchased the ticket at the 21 day mark or would have bought the ticket at the last minute on which ever flight a cheap seat was available. Since you are not flexible, you are bidding against the other inflexible flyers who are willing to pay the premium. Yes, the airlines charge a premium because they can; that IS the essence of capitalism.
Very last minute tickets are cheap (when you can get them) because the seat was going to be empty anyway.
Long advance tickets are expensive largely because the airline doesn't know for sure what the market for their seats is going to be that far out, (or the cost of fuel, or if their main competitor is going to fold, etc…) and don't want to take the risk of undercharging for that ticket. If you don’t want to take the risk that the tickets will increase even more six months out, go ahead and buy the ticket, otherwise wait until closer to the 21 day advanced purchase deadline.
I sure don't see any airlines getting fat gouging flyers in my daily travels or on the pages of the WSJ.
The larger picture isn't too pretty. In my opinion, the reason airline staff (and investors) of the old line carriers are taking it in the shorts is:
1) Lingering over capacity (Too many airlines and too much older equipment chasing a limited number of warm backsides)
2) Competition with newer airlines with more efficient equipment, no pension obligations, and employees who are willing to make less in wages and benefits than some of old line employees.
I'm not heartless. I have close friends who have watched their United pensions get slashed. There is going to be a lot of painful displacement before that industry gets in balance (if it ever will)
Don’t forget, according to Warren Buffet, over the entire history of air travel, the industry taken as a whole has not made one thin dime.