# Of Short Hops Plummeting
- Thread starter BoeingBoy
- Start date
One factor they only tangentially allude to is the decrease in perceived value of the short hops of late. People are used to paying more and getting more. Most of them can't get their minds around the idea that you pay $600 for a 400-mile round-trip and $220 for a 2,400-mile round-trip. To them, they're paying more and getting less.
I understand the fallacy of cost-based pricing, but demand-based pricing doesn't work if one ignores the competitive factor of prices. That is, customers expect there to be at least the appearance of getting more stuff when they pay more money. To them, miles=stuff.
In the end, the encroachment of LCCs has changed the customers' value equation. They no longer see a world where 400 miles can equal 600 dollars. Yield management can wish it weren't so, but it is. Time to pull their heads out of the sand and price appropriately, or stop serving these routes altogether. Thus far, they seem more inclined to take the latter approach.
I understand the fallacy of cost-based pricing, but demand-based pricing doesn't work if one ignores the competitive factor of prices. That is, customers expect there to be at least the appearance of getting more stuff when they pay more money. To them, miles=stuff.
In the end, the encroachment of LCCs has changed the customers' value equation. They no longer see a world where 400 miles can equal 600 dollars. Yield management can wish it weren't so, but it is. Time to pull their heads out of the sand and price appropriately, or stop serving these routes altogether. Thus far, they seem more inclined to take the latter approach.
BoeingBoy
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mweiss,
I can't find a word to disagree with. Ironically, I believe it was in the early to mid 80's that AMR attempted to implement milage based pricing but no other network airline would go along. Now the LCC's are forcing a rough equivalent - in the markets they serve.
Jim
I can't find a word to disagree with. Ironically, I believe it was in the early to mid 80's that AMR attempted to implement milage based pricing but no other network airline would go along. Now the LCC's are forcing a rough equivalent - in the markets they serve.
Jim
jimntx
Veteran
Add the fares to the fact that there are some situations where getting in the car and driving from one city to the other can be quicker than flying.
Take Dallas and Houston.
If you are starting from downtown Dallas, you can
1. Drive to DFW airport which takes 30-60 minutes depending on the time of day (unless you are flying SW in which case you have about a 15-minute drive to Love Field).
2. Let's say you are one of the good guys who does actually report to the airport for check-in 1.5-2 hours prior to departure. (DFW, you are now up to a minimum of 2 hours. Love--1.75 hours.)
3. You departed on time for your 45 minute flight to Houston. Including your taxi-in and deplaning, let's say 1.25 hours. (DFW, 3.25 hours; Love, 3 hours.)
4. From IAH or Hobby in Houston, you have a minimum 30 minute drive into downtown--though some Hobby devotees say 15 minutes, that would be at 2am.
So, Downtown Dallas to downtown Houston something in the 3.5-4 hour range minimum. With no allowance for unusually bad traffic tie-ups (a common occurrence in both cities), weather delays (very common in high summer), or ATC holds (it's a busy corridor).
OR
You can get in the car in downtown Dallas, drive 3 blocks, get on I-45 South and be in downtown Houston in 3.5-4 hours. AND, you have saved the cost of the plane ticket and the rental car you would need at your destination. I know a number of people in both cities are opting for the drive these days.
Take Dallas and Houston.
If you are starting from downtown Dallas, you can
1. Drive to DFW airport which takes 30-60 minutes depending on the time of day (unless you are flying SW in which case you have about a 15-minute drive to Love Field).
2. Let's say you are one of the good guys who does actually report to the airport for check-in 1.5-2 hours prior to departure. (DFW, you are now up to a minimum of 2 hours. Love--1.75 hours.)
3. You departed on time for your 45 minute flight to Houston. Including your taxi-in and deplaning, let's say 1.25 hours. (DFW, 3.25 hours; Love, 3 hours.)
4. From IAH or Hobby in Houston, you have a minimum 30 minute drive into downtown--though some Hobby devotees say 15 minutes, that would be at 2am.
So, Downtown Dallas to downtown Houston something in the 3.5-4 hour range minimum. With no allowance for unusually bad traffic tie-ups (a common occurrence in both cities), weather delays (very common in high summer), or ATC holds (it's a busy corridor).
OR
You can get in the car in downtown Dallas, drive 3 blocks, get on I-45 South and be in downtown Houston in 3.5-4 hours. AND, you have saved the cost of the plane ticket and the rental car you would need at your destination. I know a number of people in both cities are opting for the drive these days.
I've done the Dallas-Houston drive. It can be less than four hours, but rarely is. Granted, it's far easier getting out of Dallas by heading south than going north or west, but it's still rare to be going 70+ until you get well outside the city. Likewise, from The Woodlands south, unless you're well outside of normal business hours, I-45 isn't a breeze. It's better since they finished the widening project, but it's still not that great.
Having said that, I know the IAH-AUS and IAH-SAT routes work well for cars now.
Having said that, I know the IAH-AUS and IAH-SAT routes work well for cars now.
