I’ve long sung the praises of Air Canada’s efforts to create fare product categories, but really, I’ve never gone through the purchase process for my own ticket. When Frontier adopted a similar structure, I felt the same way, but again, I hadn’t gone through the process myself . . . until now. I love it even more.

I have a trip coming up in a couple of months that will take me to both Chicago for a reunion of sorts and then Indianapolis to see the in-laws. The Chicago decision was an easy one – I’ll be on the JetBlue flight from Long Beach. But coming back, I had my pick of the litter. In fact, there were three appealing options, all within about $10 of each other:

1. Frontier Lv Indy 645a Arr Long Beach 1015a (1h7m stop in Denver)
2. Delta Lv Indy 7a Arr LAX 836a (no stops)
3. Delta Lv Indy 815a Arr Long Beach 1209p (1h7m stop in Salt Lake)

While I normally want to fly nonstop whenever I can, I’ll take Long Beach over LAX if the connection isn’t painfully long every time. The choice of Frontier over Delta was an easy one as well. Frontier is new to town, and I always want to support the new guy. We need to fill those planes if we’re going to keep them around. (Besides, I love LiveTV.) So I went to Frontier’s website to book.

Frontier deserves kudos for actually showing the full fare amount instead of the misleading pre-tax amount that other sites show. I saw the fare I expected to see, but then I saw more. In fact, I saw this (click to enlarge):

Hmm, I was going to buy an Economy fare, but for only $30 I could get a Classic fare. What was that again? Oh yeah, they have a link. Here’s the comparison:

It was time to break out the math. What mattered here? Well, I wasn’t checking a bag, but if I was, this became an easy decision to buy up to the higher fare. I was definitely going to pay for LiveTV, though I knew we’d only have it on one of our flights. So that’s a $6 savings. I might think about paying up for Stretch at the time of check-in, but I wasn’t ready to count that yet. Really, it came down to the seat assignment. I wanted that seat assignment in advance. Was it worth $24? Yep, I bought it.

While all this was going on, I had completely blocked the other flights out of my mind. Sure, I could have had an assigned seat on Delta at the cheapest fare level, but I had already made up my mind what I wanted to fly. Frontier was able to get an extra $30 out of me, and I had no problem paying for it. It was completely fair and I expected to get more out of it than the $30 it cost.

I hate when airlines throw fees at you every step of the way, but a product like this allowed me to pay for what I wanted up front and be done with it. I wish everyone would do this.

It’s time for another episode of Ask Cranky. I’ve received this question in many different forms ever since my days doing airline pricing, so I thought now would be a good time to answer it.

Why is it cheaper for me to fly from Fairbanks, Alaska to Denver than it is to fly from Fairbanks to Seattle? What happens if we just don’t get back on the plane after the layover in Seattle?

Kim

There’s nothing worse than trying to figure out airline pricing. After 3 years on the inside, I understand it, but it still makes my head hurt. This question, however, about why two flights cost more than one or why longer flights cost more than shorter ones is pretty easy. It’s actually just economics – supply and demand.

Back in the days of regulation (prior to 1978), pricing was pretty straightforward. There was effectively a price per mile. While that may make sense from a cost perspective (sort of), it doesn’t make much sense from a revenue perspective. So after deregulation, the airlines really started to try to maximize revenue. Crazy idea, I know. Let’s look at these two market to illustrate my point.

Fairbanks to Seattle is a monopoly for Alaska. They fly it nonstop and nobody else does. What’s more, only one other airline even offers fares on that route, and its Delta with a connection in Salt Lake that only goes a few times a week and requires serious backtracking.

So Alaska can really set the pricing in this market to be the most lucrative for them without having to worry about serious competitive threat.

Meanwhile in the Fairbanks to Denver market, it’s a very different scene. Yes, Frontier recently announced seasonal nonstop flights a few times a week, so they can charge a premium. But the competitive landscape puts serious pressure on fares. Alaska can offer several connections per day over Seattle while Delta can offer its connections over Salt Lake as well. This may not be the most competitive route in the world, but it’s certainly more competitive than the Seattle market.

Making problems even worse is the market size. Fairbanks to Seattle is a much bigger market than Denver to Fairbanks. So if Alaska lowers fares in Denver, it may be able to fill up a few seats with connections via Seattle whereas those seats might have gone empty otherwise. And that brings us to the next question – why not just buy a ticket to Denver and get off in Seattle?

If you have a one way ticket and no checked bags, then you can do that and you probably won’t get caught. It’s called hidden city ticketing, but the airlines don’t allow this. So, there’s always a chance you’ll get caught and then made to pay the difference between what you paid and the full walk up fare. (You don’t want to do that.)

If you have a checked bag, then you obviously have a problem. It will go on even if you don’t. And if it’s a roundtrip ticket, there are other problems. If you don’t show up for a single flight in your reservation, the rest of your trip is canceled. So you might be tempted to buy a ticket from Fairbanks to Denver roundtrip. The problem is that once you miss that flight to Denver, your return will be canceled as well and then you’re in trouble. I wouldn’t recommend it.

As I mentioned yesterday, Southwest has been circulating a survey to a bunch of fliers to try to explore all sorts of ways to make changes to their offerings. This explores change fees, bag fees, standby, Rapid Rewards changes and more. Yesterday we talked about Rapid Rewards and same day changes, but today I want to look at the bigger picture.

Before we get started, I’d like to remind everyone once again that this is just a survey. It doesn’t mean that these things are imminent, nor does it mean that it’s even being considered the way it has been presented. Surveys are always constructed to try to figure out what matters most to people, so I imagine that the results here would give Southwest an idea about what it can and cannot charge for in the future. I would be surprised to see something like this happen exactly as they’re showing it.

The survey itself threw out a bunch of different fare scenarios for hypothetical trips. There’s no need to post them all, so I’ll just show one and then we can take about it below. (Click to blow it up so you can read it.)

As you can see, there’s a lot to talk about. The idea here seems to be along the lines of Air Canada – fare families where people can pick and choose the fares they like to get the benefits they want. Let’s talk about a few of these.

• Check-in Time – I doubt we’ll see them reduce the check-in time for cheap fares, as they show here. Southwest is more of an airline to add benefits to higher fares than to take away from lower ones. I do like the idea of not offering EarlyBird to the lowest fares, however.
• Bags – I actually would be fine with offering only 1 bag free to everyone, but I think it does make sense to differentiate what’s allowed depending upon your fare class.
• Fare Reusability – This really isn’t something I even thought about changing. Now you can change your fare to be used for another ticket anytime within a year, but this proposes potentially restricting that further for cheap fares. I don’t like that idea. It’s very customer unfriendly.
• Change Fee – This particular example doesn’t show any change fees, but other scenarios had them ranging from $25 to $100 for the cheap fares. I’m in favor of a small fee, as I’ve noted before.
• Same Day Changes – This is one of the biggest complaints I hear about Southwest. People hate that you can’t standby for an earlier flight without paying the difference in fare. They are clearly exploring alternative options.
• New and Improved Rapid Rewards – Those are their words, not mine. As I mentioned yesterday, I’m not sure how new and improved this will end up being, but I do think that the plan to award different multipliers of miles depending upon which fare you buy makes sense.

What do I think about this whole package? I think Southwest needs to be very careful not to become another legacy carrier. A lot of the policies that they are exploring have the potential for them to align a lot of their policies with the legacy guys, and that would be a mistake. That being said, I think there’s a lot of good in here as well.

Whether they act on any of this remains to be seen, but I imagine that we’ll be seeing some changes along these lines before the year is out.

New York Snowstorm Sees Delta Start Canceling Earlier Than JetBlue, American – BNET
You may have been stranded but from an operational perspective, the airlines did pretty well at JFK during this major snowstorm.

US Airways and Continental See Different Fortunes with United at Washington/Dulles – BNET
As Continental ramps up Dulles, US Airways cuts back. Clearly they’re each seeing different opportunities with United.

Three Reasons Why Delta Slashed First Class Fares Between New York and the West Coast – BNET
Delta made some pretty steep cuts to First Class fares between New York and LA/SF last week. Here’s why I think they did it.

Airlines find coach travelers willing to pay extra for perks – Chicago Sun Times
This week, the Sun Times took on the issue of fees, and I was asked to comment.

Continental Joins Star Alliance Tomorrow – BNET
Continental is in no-man’s land as they end their SkyTeam participation and prepare for Star Alliance.

Ontario’s Air Traffic Glut Draws Anger Toward LA – BNET
Ontario’s traffic keeps dropping, and the solution might involve kicking LA World Airports to the curb.

Airlines Show Concerns About Winter Demand Levels – BNET
Sales are starting to come out fast and furious, and the pricepoints are low. This may be a long winter.

US Airways Walks Away From Las Vegas, Slashes Jobs – BNET
US Airways has put the final nail in the coffin in Las Vegas, but more importantly, a lot of people are losing their jobs. Not good.

JetBlue Has Big Plans for Boston – BNET
JetBlue is ramping up Boston big time. Giddyup!