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
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.
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