WSJ: Most Expensive Domestic Routes

Don’t think competition is good for a route?

In the first quarter this year, the most expensive market in the country, per mile, was Boston to Philadelphia, a US Airways-dominated route, where the average fare was a whopping $684. Southwest began serving that route in June.

And now? US Airways’ highest coach fare is $281 round-trip—$400 less than its first-quarter average fare.

The most-expensive average domestic ticket in the first quarter was $786 for round-trip flights between San Francisco and Philadelphia, according to the DOT. That 2,521-mile route is dominated by United and US Airways, who are competitors but also partners in the Star Alliance. Fly to Boston from San Francisco—183 miles farther by air than Philadelphia—and you paid an average $296 less round-trip in the first quarter, according to DOT. The difference: JetBlue Airways has 17% of the San Francisco-Boston market, but none of the San Francisco-Philadelphia market.

Source: http://online.wsj.com/article/SB10001424052748704540904575451653489562606.html

When Airlines Should & Shouldn’t Charge For Something

Spirit Airlines Airbus 319-132 N506NK

Image via Wikipedia

Here’s a thought, if more than 75% of passengers purchase an ancillary revenue item, it should be included in the ticket price.

If 75% or more of people on a flight buy a meal — meals should be included in the ticket price.

Airlines should have a threshold in lieu of what seems to be a “what can we charge for” and “how much will we get away with” mentality.

Not all ancillary sources are bad. There are the “good” kind of ancillary revenue like day of departure upgrades and premium seating — which airlines need to focus on — and the “bad” kind like baggage fees, food, etc.

Airlines should get creative on “good” ancillary revenue — ie: up selling and cross selling.

In the mean time, ancillary fees are going up up and up!

There are fees yet to be introduced held up purely because the reservation systems the airlines haven’t been able to keep up with the ways airlines intend on charging passengers. The fees we already pay are going up.

JetBlue‘s executive vice president and CFO, Ed Barnes, told analysts earlier this month that the airline has lost some potential ancillary revenue during the past quarter by waiving certain fees in this year’s transition to Sabre.” – Travel Weekly

Why is ancillary revenue growing? It works!

Ancillary revenue is a significant opportunity for Continental,” he said. “And United has done a very good job. There are many issues related to rolling out our ancillary revenue products. There are IT issues, there are global distribution system issues, there are timing issues in terms of where it is in the chain of purchase, whether it’s a prepurchase or day of departure or post-purchase.” According to Travel Weekly,

When Will All This Stop?

Not anytime soon barring an airline charging for something we really won’t stand for (ie: bathrooms, to charge for sitting down on the plane versus standing up..).

Who’s Bucking the Trend?

Southwest Airlines which maintains no baggage fees.