Let’s say for example I live in Los Angeles and a United airlines flight from LAX to JFK with a layover in DFW is $500 but that same flight from LAX to DFW is $600. How did I save $100 by adding an extra flight?
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The price of a product isn’t just about what it costs the company. It’s also about what customers are WILLING to pay. A direct flight between two major cities is more convenient, so people are willing to pay a premium, especially business travellers who value time.
It’s why Apple phones cost so much. Or Dominoes pizza. Their products don’t cost any significant amount more than their competitors’ products to manufacture. You’re paying a premium so you can have THAT product.
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