> “Purchasing a ticket to a point beyond the actual destination and getting off the aircraft at the connecting point is unethical,” according to the letter by American, which isn’t party to the case. “It is tantamount to switching price tags to obtain a lower price on goods sold at department stores.”
What in the world? How is that comparison anywhere near remotely justifiable? Absolutely ridiculous.
> American Airlines Group Inc., in a letter to travel agents on its website, suggested it will have to raise fares if it keeps losing money from the practice.
Yes, please do. Price each ticket based on what it costs and a fair margin, not based on competitive meta-market games.
I can only assume that airlines are engaging in potentially unethical pricing themselves. For example, imagine if an airline delivers service from A->C and is low cost. A large competitor airline has no direct route, but flies A->B and B->C, and so offers A->B->C for the same price as the first airline. The route is actually below cost (or has a substantially smaller margin), but the airline offers it anyway to harm its competitor and to keep passengers within its brand. I don't know if I consider this unethical or not, but it's certainly no less ethical than customers taking advantage of hidden city routes for a lower price.
> Price each ticket based on what it costs and a fair margin
That sounds great in theory, but airlines are the textbook example of "what it costs" not making sense. An airplane costs almost the same to fly from New York to San Francisco whether it's completely empty or completely full. The margin cost of fuel for your 150 lbs of body and 50 lbs of luggage is pennies compared to the cost to operate the airplane generally (e.g., a 777-300ER costs about $320 million today, or a lease payment of about $45,000 per DAY [1]... plus depreciation of the engines, maintenance, inspections, flight crew, cabin crew, etc).
How do you divide that up? If you assume 100% capacity on every flight, the airlines will be even broker than they already are (airlines are hardly raking in money: American Airlines filed for bankruptcy in 2011, Delta and Northwest in 2005, US Airways in 2004, United in 2002, and US Airways again in 2002...). [2]
If you assume something in the middle, maybe 70%, then you end up with a silly situation where seats are flying empty even though the airline would be happy to sell then for 50% off and people would be willing to fill them for 50% off.
Then add the fact that first class passengers are willing to subsidize the rest of the cabin... and so are people who need flexible fares, etc.
Airline seats are a lot like software in that there isn't a good way to figure out "charge what it costs." On average, we know the airlines are charging slightly LESS than what it costs to operate an airline. But it's not like gasoline where you can figure out how much it costs to refine a gallon and then charge a small markup.
Probably the same way folks try to justify selling a DVD that only plays on North American DVD players. Generally people substitute the phrase "it isn't fair when ..." when they meant to say "I don't like it when ..."
I expect that the airlines will be unsuccessful in their suit but will get the FAA to approve a fee that would be charged if a passenger did not make the complete flight. In the back rooms they will tell the FAA its for passenger safety, after all its important in an emergency to know who is really on the plane, and people who get off early are putting first responders in harms way as they will go looking for people who aren't actually on the plane. They will argue they need a way to discourage that behavior and one way to do that is to charge a hefty "early exit" fee should a passenger depart the route mid-route. They would of course be open to discussions if it was for a legitimate emergency like you had to get back home or something.
And then there will be a $250 "early exit" fee and this web site will be toast and the airlines will be happy again.
> after all its important in an emergency to know who is really on the plane, and people who get off early are putting first responders in harms way as they will go looking for people who aren't actually on the plane
They generally do a new itinerary for each new flight, so they should know that person X isn't on the flight. Now, I can understand that they'd be annoyed if they were holding the plane knowing that person X had arrived at that airport and should be nearby. But, anybody could simply tell the check in desk they won't be flying on that flight (as a courtesy).
Paying for a flight and not boarding is way more ethical than the Airline selling you a seat that doesn't exist (overselling is super common... ever hear them ask for volunteers to take a later flight in exchange for a voucher? That means they sold seats that didn't exist).
Of course, the airline thinks it's fine when it is pulling the switcheroo but they get pissed when you do it back to them. As long as the FAA allows them to oversell flights, they should allow passengers to use hidden city fare discounts... it's only fare.
What in the world? How is that comparison anywhere near remotely justifiable? Absolutely ridiculous.
> American Airlines Group Inc., in a letter to travel agents on its website, suggested it will have to raise fares if it keeps losing money from the practice.
Yes, please do. Price each ticket based on what it costs and a fair margin, not based on competitive meta-market games.
I can only assume that airlines are engaging in potentially unethical pricing themselves. For example, imagine if an airline delivers service from A->C and is low cost. A large competitor airline has no direct route, but flies A->B and B->C, and so offers A->B->C for the same price as the first airline. The route is actually below cost (or has a substantially smaller margin), but the airline offers it anyway to harm its competitor and to keep passengers within its brand. I don't know if I consider this unethical or not, but it's certainly no less ethical than customers taking advantage of hidden city routes for a lower price.