Airfare question for anyone who might understand...

[discntnt_irny_srcsm]

...airfare pricing.

I figure some rather bizarre accounting and marketing plays a big role in this. I travel a lot for business. Either I am paid a per diem fixed by:
http://gsa.gov/portal/content/104877?utm_source=OCM&utm_medium=print-radio&utm_term=HP_01_Requested_perdiem&utm_campaign=shortcuts

...or they pay my S-corp a fixed rate. In either case I keep anything I don't spend. I'm motivated to find deals and cut costs. I live near Philadelphia. When I worked in Los Angeles, I would buy a flight from LAX-PHL-ABE because it cost $221 rather than LAX-PHL which cost $357. I would just not take the second flight. This was on USAir. I work in Atlanta now. Delta has a hub in Atlanta and charges $326 for the PHL-ATL flight there are 10 flights leaving about every 80 minutes all day. I also notice Delta sells flights from ATL-MYR (Myrtle Beach) for $410. I'm looking at flights on the 10th and 11th. The real puzzle is that to buy a flight on Tuesday PHL-ATL-MYR costs $81. What kind of bizarre accounting gives $326 + $410 = $81?



I have two options: A- pay $326 for the 7:45 AM to ATL OR B- pay $81 for the 7:45 AM to ATL and the 12:55 PM ATL-MYR.

As my cousin Vinny said, "I'm going with option B." No one follows you off the first flight and calls the sky marshals if you don't take the second one. But don't check any bags because their going to Myrtle Beach.

[CurtEastPoint]

1. Better read the fine print. Anytime you don't show for a leg, the remainder of the tix

get canceled. So you'd be stuck in your destination.

[discntnt_irny_srcsm]

2. Not a problem these are one way tix.

I usually return on USAir ATL-PHL- somewhere else (BDL, ORF and BWI with a stop at PHL are often cheaper than ATL-PHL).

[CurtEastPoint]

4. OK but never underestimate the sneakiness of the airlines. What's to prevent them from...

finding those tix under your name and doing what they will? I'd hate to see you get stuck and burned!

Here's AA's letter:

Dear,

Let me take the opportunity to clarify American Airlines position on back-to-back ticketing. Since passengers utilizing back-to-back tickets are not remaining at their original destination over the required Saturday night, but returning on a second ticket, the intent to circumvent our tariffs is clear, and may be construed as common law fraud. As such, passengers who attempt to use back-to-back tickets may be denied boarding, have the remainder of their ticket confiscated, and may be assessed the difference between the fare paid and the lowest applicable fare.

Restrictions on back-to-back ticketing help American offer frequent flights to business travelers, and inexpensive travel to leisure travelers. Leisure travelers are willing to accept various kinds of restrictions, including non-refundable, advance purchase and minimum-stay requirements, in exchange for low prices. They then help fill the excess capacity that is a natural consequence of providing frequent service to fit the business travelers' needs. Without the ability to charge different fares to leisure and business travelers, American would not be able to offer as many flights.

In most cases the minimum stay requirement on discount fares is a Saturday-night stay. This is intended to discourage use of the restricted fares by business-travelers since, in most cases, business travelers prefer to get home quickly. Indeed, part of the reason business travelers like frequent flights is that frequent service increases a business travelers ability to minimize overall travel time, and maximize time either at the office or at home. Leisure travelers, however, are choosing to spend their leisure time traveling, and frequently stay over a Saturday night.

Although the issuance and usage of back-to-back tickets is not illegal in the sense that one could be fined or sent to jail by the government, it is a breach of a passengers contract with American Airlines. Both Tariff Rule 100AA and American's Condition of Carriage, which are incorporated into every ticket sold by American as part of our agreement to carry the passenger named on the ticket, bar back-to-back ticketing. In addition, it violates the agencies' contract to act as an agent for American Airlines.

Achieving the correct proportion of passengers who purchase the higher unrestricted fares and those who purchase the lower discounted fares allows us to continue offering timely and frequent schedules with the type of service our frequent flyers desire and at a reasonable price. It also enables us to make air fares even more affordable for those who wish to travel for pleasure. Back-to-back ticketing upsets this balance and, if it is allowed to proliferate, will lead to higher air fares and less service for all.

Sincerely,

[discntnt_irny_srcsm]

6. It has been abandoned as a pricing ploy...

...to have Saturday night stays lower ticket prices. Airlines that sold weekend travel and have links to hotels and rental cars were making money from those bookings since many business travelers left these facilities empty on weekends. I worked in Grand Rapids for 2 years and found it was generally cheaper to buy weekend tickets to PHL that included a rental car or dinner out than only a flight. I used a site called site59 that has since been bought out by travelocity.

Check the article I mentioned here: http://www.democraticunderground.com/?com=view_post&forum=1216&pid=1000

The gate agents don't seem to care much if have a gate-check/bag issue and tell them your plans have changed, you need items from the bag... They just cancel the second leg and gate/check to the connecting city.

I suppose if I did this a lot using my Delta FF# they could yank the status if had any or remove the accrued miles. I split the bookings between end cities and between various mileage accounts. I sometimes use my AlaskaAir account as I have their Visa card but have yet to ever actually fly on an AlaskaAir operated flight.

I'm more interested in trying to figure why the price differences exist. Do you have any thoughts on that?

[CurtEastPoint]

7. Pricing in the airline industry is one of the mysteries of life.

It's based on market share and competition and yield management. I'm no expert but: http://en.wikipedia.org/wiki/Yield_management#Airlines

[discntnt_irny_srcsm]

8. Thanks

I'll read up on that and look for related information.
My uninformed and anecdotal data says that fare pricing is almost completely unrelated to the direct cost of operating the flight in question.

[Lydia Leftcoast]

9. A travel agent I used to use in Oregon once

quipped that she thought the airlines set fares either with a dartboard or by spinning a roulette wheel.

She said this after I booked a flight PDX<>MSP (i.e. Portland, OR to Minneapolis) for $198, when the price had been $550 the day before.

[Major Nikon]

3. Airlines base their prices on the end points and competition, not so much their actual costs

If Airline A offers a flight from ABC to XYZ for $99 on a certain day and time, Airline B is going to try to match that deal, even if it means they have to do so including intermediate stops. This really has no bearing on Airline B's pricing from ABC to MNO, even if MNO is an intermediate stop to XYZ. If there's no competition for the ABC to MNO flights, prices will be artificially high.

[discntnt_irny_srcsm]

5. I don't know...

...if that's a factor here since the next cheapest flights to MYR are USAir at more than 3x the price.

Here's an article: http://travel.usatoday.com/alliance/flights/boardingarea/post/2012/01/View-From-The-Wing---How-to-Use-Hidden-City-and-Throwaway-Ticketing-to-Save-Money-on-Airfare/598252/1