Why are flight costs so much higher when the departure city is the hub of a major airline?
This is for my marketing class - answers from people who work in the travel industry would be especially helpful! Many Americans use round-trip, one-day air travel for business purposes. Prices for these and many other flights vary dramatically, depending on the city of departure. For example, if the departure city is a hub of a major airline, consumers can expect to pay more than they would from a nearby city. In October 2006, a day trip on Delta Airlines from Cincinatti (a Delta hub) to Washington D.C. and back cost $1,038.60. A flight to Washington D.C. from Columbus, Ohio, two hours northeast of Cincinatti, cost $274.71. This is $763.89, or 78 percent less. ***The question is: What is the reason for this cost difference?
Air Travel - 4 Answers
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1 :
I don't work for the travel industry, so I really don't know. I find the super cheap fares are often ones going to/from the airline's hubs. I think these are just sales to fill the seats. But yes, I have seen what you're talking about: the fare being lower from a nearby city that actually connects through the hub anyway. My only guess is maybe at the hub, it is nonstop, so the airline thinks they have your business already. At the non-hub airport, you will have to connect anyway, so now the airline is competing with other airlines for your business. So from Columbus, you can choose to go with northwest, connecting in Detroit, or United connecting in Chicago. Delta lowers their fare to compete. I don't know anything about marketing. It's just a guess.
2 :
That's not true on all hub city travel---for example, USAir PHX to ATL (hub to hub) is only $300. What's more important is where the traveller might go after they reach the hub. There's only a few cities in the US where airlines fly nonstops to Europe, Asia or other super-long-hauls. All other passengers need to reach that hub by a connecting flight in order to meet their plane to Europe. Airlines make a lot more profit on the International flights than on most domestic flights, and they want those planes full. So they will often discourage anyone from flying to the hub when it might cause an International passenger not to get a seat. So your example of Cincinnati-DC (and I am guessing it was Dulles), they would rather save the seat on that plane in case someone connecting onward to London wanted/needed it than fill it with a passenger who is ending up in DC. Do a google/yahoo search for "hidden city ticketing" and that might explain it a bit better. And it's not just for International flights--- you see the same thing for certain domestic routes--- but you do see it more with the International hub cities. If you want a shock, try pricing a flight with USAir from DC-Dulles to Philly--- a short hop, between two International airports--- not even 200 miles each way with an amazing $550 price tag. They do NOT want your butt in this seat unless you are buying the segment as part of a bigger package.
3 :
Was this a one time thing or is it regularly? Airline raise fares as the flight fills up, and lower them if it is not filling up. So you may have someone sitting next to you who paid half as much as you. The flight from Cincinnati may have had only one seat left while the flight from Columbus may have had 20 seats left.
4 :
There's much less competition in hub cities, so airlines often will charge more there and subsidize travel from other locations. Interestingly, it can often be cheaper to originate from another city, connect at the hub, and then continue to a destination, than to fly straight from the hub to the destination. A big example of this is Minneapolis, the major hub for Northwest Airlines. It can be hundreds of dollars cheaper to fly from nearby airports like Rochester, even though it will still be on a Northwest flight and still connect at MSP.
