I knew one guy from work who used the “back to back”. He frequently did the Mon-Fri at another city. In the dark ages, Air Canada polices charged much much less for over-weekend stays, on theory that they were non-business travellers and more price conscious. He booked a 2-week trip one way and a weekend trip back. AFAIK he never got caught, in the days before 9/11 and exact names on tickets. One used his initials, the other his name I think.
Similarly, AC would have flights like $300 Toronto to Regina, $450 Toronto to Winnipeg; but the Regian flight stopped in Winnipeg. Someone asked a similar question and was told if they got off in Winnipeg the whole return ticket would be cancelled.
If you read the fine print on modern e-tickets; even if you miss a leg of the trip purely by accident, if you fail to appear they cancel the entire ticket including any further legs and the return.
As for charging you more - I guess it depends what you signed. I bet the credit card company would have a hard time with the airline making up a charge after the fact. One retailer I talked to said they could not even ADJUST charges (due to a real error) 5 days after the original charges went through. If you signed a credit charge slip for $800 they would have a hard time claiming they could charge you another $400 based on some tiny fine print buried halfway down in the second page. IIRC the car rental companies for example make you specifically sign against the line that says they can charge your card extra for damage or refueling.
The analogy isn’t perfect. The basic question was, “Why does the airline care if I don’t take the second leg when I already paid for it,” and the answer was, “Because if you’re only going one way, they’d rather be able to charge you the higher one-way fare.” The idea is that you’re getting the discount for buying the larger volume, so if you only use the smaller volume, the vendor would *rather *charge you more.
This is different from charging less for a larger can of something - absolutely less, not just less per pound. That does happen, but usually only if the larger size alone is on sale. In this case you are charging less for two identical items than for one. There is no economy of scale that makes two airline seats cheaper than one. I understand the difference in demand, but the airlines are penalizing fliers who make the rational decision to purchase the cheaper alternative. And they wonder why they are losing out to Southwest who does not play these games.
No, but if there was a deal to get two of something for less than the price of one, I’d buy the two and throw one away if I didn’t want it. Why should the store care?
(Funny you should mention this. True story: I recently went to the corner store to buy milk, and half-gallons were $3.29 and gallons were $2.99. I bought the gallon and ended up throwing almost half of it away. I guess I should keep that on the down-low lest they hit me up for another 30 cents next time.)
Airlines bend over backwards to analyze and exploit the demand curves of different customer segments. This is nothing new–the 19th century rail industry pulled similar shenanigans:
Airlines are like the rug dealer in the bazaar who decides what his price is after he sizes up the customer and figures out how much dispensable income he is likely to have.:rolleyes:
A brief anecdote about exploiting your market: When I studied economics in an MBA program, one case we discussed (and my memory on this is fuzzy) was a company that wanted to offer a discount to people in the Utah market but somehow ran afoul of some sort of federal regulation that prevented them from offering discounts in specific geographic areas. So they started offering a free recording of the Mormon Tabernacle Choir instead of a discount.
Some of this has been mentioned already but the real reason is that so few people want one-way tickets that the airlines don’t adjust their prices much based on demand because they don’t need to. Round-trip tickets are a commodity item with many airlines competing for the lowest fare with algorithms so complex that most of the people that work for a given airline don’t even understand them. They fluctuate very frequently to fill seats. This is a very complicated process heavily dependent on computer models and also very expensive to operate so it isn’t cost effective to worry much about potential one-way passengers.
I didn’t say it *made sense *or that I agreed with it–somebody asked for the rationale, and I gave it to them. Don’t ask me to defend it–I can’t and won’t–but it is what it is, and no amount of saying, “But that’s fucking retarded!” is going to make it otherwise.
In the old days business travelers on expense accounts were considered to have lots of disposable income. Notice the guy in Up in the Air flew American without considering the cost. (Possibly comes from the fact that the book is a bit old.) Today travel offices have a lot of restrictions.
Airlines price based on value to the passenger - a guy needing to get across the country at the last minute for an important meeting puts a lot more value on that seat than a tourist - and on the small incremental cost to fill that last seat. Hell, now that they charge for baggage it might even be a benefit. I’m fine with all this, I’m not fine with charging penalties for legal activities. It would be like them charging a penalty if a business traveler found a cheaper seat on Travelocity.
I think a lot of the airlines’ problems recently was that their fare structure depending on them having more information about expected loads than the traveler. Now the traveler, through price cues, can find routes and times with excess capacity and take advantage. Since most of the airlines seem incapable of changing their pricing structure to reflect this, they make up for it charging new fees. And everyone hates them.
And they let it get so out of whack that the round trip price is lower than the one way price - and then try to write restrictions to forbid the obvious consumer strategy.
I don’t think that code checking for this case would add a lot of complexity to their admittedly complicated algorithms.
In an interesting parallel situation, I was negotiating a contract with a software vendor. The vendor was selling a billing system. Many vendors charge by how many servers, how many registered users, how many concurrent users… They wanted to charge us a percentage of our revenue for the software. Their effort to deliver and support the software had no relationship to our revenue. But they did say that was their way of determining value to customer, since we realized our revenues through billing for it. We might have gone with it, too, but their contract also gave them the rights to audit our books. That was a non-starter.
One of my bosses, long ago, used to remark on the Amdahl business model. They made IBM Mainframe clones. Being much smaller, they only made a very few models instead of a whole line. IBM pricing depended on the power (computing cycles) of the machines matched up to customer demand, a variation on the “pay a percent of revenue” trick. Amdahl’s cheaper computer was instead their more powerful computer with a card included to chew up processor cycles so the thing ran slower for the lower rental fee. You paid extra for them to remove the card. Since most of the rental revenue was to recoup the R&D to design the computer, this business model actually was logical even though it sounds stupid. And, they were significantly cheaper than IBM anyway, and the next tender cycle, IBM was respectfully lower priced.
Yeah, the business travel used to be wide open - since you might have to decide at a moment’s notice to postpone or extend a trip, the $1000 fare allowed for this when the $300 fare did not. Eventually our company stated looking at things and concluded that the risk was acceptable - book everything at $300, and the odd time you had to re-book for another time, pay the $150 change fee or the $1200 to book a different ticket same day instead. In the long run it was cheaper. Of course, for us going TO the big city, requirements to stay over a weekend were a bonus; for the big city types flying to the middle of nowhere, such choices were not acceptable. And of course, the big shots were always exempt from these rules…
About 10 years ago, Air Canada went into bankruptcy protection and decided to adopt a more logical pricing model. Over-weekend stays disappeared, and the only pricing difference depended on early booking and cancellation options. Our cost of business flying went down tremendously.
