I’m considering getting one of those cheap tickets you see which is a direct round trip from MSP to Orlando for $60 including fees (it wasnt the date i wanted but it was cheap). How does that make economic sense for the airline? Sure the plane is making the trip anyway, but how can hauling my 200lbs of man meat 1500miles for $30 each direction not more than offset the fuel?
In: Economics
Like you’re 5. If nobody’s on the plane, they make no money. If the plane is full, they make maximum money. There’s some point in between where adding people does not make them more money. Even if you added 10 people and did not make any extra money on the ticket sales from those 10 people, five of those people will buy snack foods or a cocktail, and you will now make money.
Also that plane has to get to the other location to pick up the next 600 scheduled passengers whether there are people on the current flight or not
Absolutely, the economics of airline ticket pricing can seem counterintuitive at first glance. Airlines operate on thin margins and have fixed costs to cover regardless of how many passengers are on board. Selling a ticket at a lower price can still contribute to covering those fixed costs, like crew salaries, airport fees, and maintenance. It’s better for them to make some revenue off a seat than none at all. Plus, once you’re on board, there’s a chance you’ll spend on extras like baggage fees, seat upgrades, or in-flight purchases, all of which add to the airline’s bottom line. It’s a volume game as well; more filled seats at lower prices can sometimes yield better overall profits than fewer seats sold at higher prices. For those looking to save on travel costs, including airport parking, checking out options on sites like parkingaccess can offer some great deals that further reduce the cost of travel.
If you spend less on the flight you are more likely to purchase drinks, upgrades, or wifi. Kind of the same mentality cruise lines use.
Anything is better than nothing. They’ll fly the empty plane if they have to—I saw a post on reddit a few years ago where the OP was the sole passenger on an otherwise empty plane and they said the pilot was jamming Metallica the whole time—but if they *can* sell a few seats, even at drastically-reduced rates, well, $60 is better than $0.
Two reasons
One, the weight you will add is minuscule compared to the plane itself and everyone else who already booked the flight + their luggage’s (usually these tickets don’t let you get large check in luggage for that cheap price)
Two, you have to get back again (likely) so you will be paying to fly back and if the place you are flying from isn’t your home town or something you don’t have a cheap place to stay probably to skimp until a cheap flight comes along and will likely have to pay for a normal price ticket to go back
For places with cheap tickets for resort stays I’m not sure entirely but I guess they get a kickback from the other costs to make up for it
Gotta keep the flight or lose access to the airport. Its qhy emirates has a melbourne to adelaide flight for 20$ that os still usually empty. They fly it to keep theor dubai to Melbourne route
Think of it like an uber eats delivery driver. You have a big car that costs a lot of money to maintain, gas is expensive, and you have an employee (you) who gets paid for their time no matter what.
If you already have 10 orders going to the same apartment complex, adding an 11th one will almost be pure profit. You’re already filling the car with fuel, you’re already maintaining it, you’re already driving to those two locations.
You’re assuming the plane has not another destination and doesn’t need to pick up passengers and the next stop to fly somewhere else.
Quite a simple answer really: do we want to make nothing, or something, on that seat? I know what I’d choose.
Its called expiring inventory. The plane cost roughly the same to fly with or without passengers. The plane is leaving no matter what, it has to pick up passnegers on its next stop anyways. .
Even selling a $69 ticket is going to increase total marginal profit.
They then use price discrimiantion to fill the seats. Start out at a price and keep adjusting it until the plance is full.
The downside is that some customers will figure out the system and game it.
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