Are airfares really going up? Yes. But by how much? Good question.
Posted by George Hobica on Friday, July 11, 2008
I fielded a question from a business reporter the other day, asking all kinds of personal questions. Not about me; about airfares. Why personal? Well, this reporter wanted to know by exactly what percentage fares had gone up in various months on various routes. And I wonder if the airlines really divulge this sort of information. Because to really understand how much fares have gone up at the consumer level, don't you have to know exactly how many seats consumers bought at what price levels, and then average all those sales to get a final figure? Thing is, if you're an airline, then this is rather personal stuff.
You've probably read newspaper and blog entries saying that airfares have gone up $15 or up 22%. But as a journalist myself, I'm skeptical. Yes, fares have gone up. But how do we measure by how much?
Here are some questions I have whenever I read, "Continental has pushed through the umpteenth fare hike so far this year, at an average of $15."
Are we talking "asking" price here (the published fare); or "selling" price?
And what do we mean by a fare?
Are these published fares we're talking about? Or are we also including under-the-radar consolidator, unpublished fares, such as those two-for-one Virgin America, or 10% off JetBlue promo code fares.
Is Delta going to tell a third party, who might reveal it to American, that it sold 152,101 seats on the JFK to LAX route for $322; 40,333 seats at $452; and so on and so on? I can't imagine that happening. Why would one airline reveal the success of its yield management on a particular route or in general. Unless we know, however, exactly how many seats were sold at what price on every route and in every fare class, then how can we tell exactly by what percentage fares have gone up? Does Coke tell Pepsi that it sold X cases of Diet Coke at $Y each, and X cases of Sprite at $Z each?
Sure, we can probably determine what the average published fare on a given route, and systemwide, might be. But is someone actually tallying up what every seat sold for, in every fare class, every class of service, on every flight, on every airline (this means Southwest and Allegiant too), including consolidator fares, negotiated and promo code fares, and then coming up with a "headline" percentage increase?
Maybe so, but I've never seen airfare analysts and pundits reveal their methodogies, any more than I've seen an airline reveal exactly how many seats in "H" class they sold in February
And are we talking here
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