Re: destination versus routing pricing

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Matthew & list:
You hit the nail on the head, namely the two factors that have to be
played off each other. The answer is not all point to point service or
all hub service, but a mixture. Big city pairs should get lots of point
to point, and so forth down to small to small almost all by hub. Having
a lot of planes makes lots of point to point service possible for large
carriers. But even large carriers need to realize they can't go
everywhere.

john

Still a Fan of Non-Stops

On Friday, September 19, 2003, at 01:57 PM, Matthew Montano wrote:

> > Why does Airline U insist on having so little point to point
> > service and so much traffic through it's hubs?
>
> The idea was that an airline could do two things with a Hub/n/Spoke
> system, that with the same # of planes one could:
>
> a) Serve more destinations
> b) Serve them more frequently
>
> ... and that by using a hub it would be cheaper than running
> point-to-point and avoid suffering poor aircraft utilization, and
> possibly lots of empty seats.
>
> Of course, it's a traditional marketing and pricing problem that
> people don't value their time very well. Folks will spend 10 minutes
> in line to save 1/4 cents a litre (about 13 cents per average fill-up)
> on gas. Compounded with the fact that flights are listed side by side
> in reservation and web-sites they appear as equivalent commodities.
>
> It's obvious why airlines attempt to fill their seats, because they'll
> go empty anyways. But it begs the question the more specific question,
> how did these 'seats' come about anyways?
>
> And how does Air Tran do it?
>
> Matthew

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