That could be changing, though. It seems that the Federal Aviation Administration is seeking ways to bring down flight prices. In October a proposed rule change was submitted that involves allowing airlines greater flexibility in the pricing of tickets. Airlines could use their own internal pricing systems and pass that cost on to their passengers, thus lowering your airline’s own costs. To keep costs on a downward trend with passengers, the proposed rule is geared toward pricing tickets on a “best efforts” basis, where airlines are permitted to offer the lowest possible cost for two reasons. The first reason is to help preserve the value of the airline’s low fare, allowing airlines to sell off valuable inventory. The second reason is to keep costs in check by reducing overhead, and making airlines more cost-competitive.
The proposed rule change also allows airlines to drop prices after a certain number of people cancel their fares, in order to discourage long-distance airfares. One interesting provision of the proposed rule would allow airlines to advertise fares between two specific airports to make up for a reduced ticket price, rather than dropping prices at more distant airports. How many Americans have been forced to change their flights to a distant hub due to a price war between planes?
Airlines that are allowed price wars may also be able to use these price reductions to encourage passengers to fly with their particular airline, eliminating the need for passengers to change flights and potentially saving valuable dollars. Here’s the thing is, airline pricing is supposed to be based on what it costs to get service to every stop. Under the current rules, a flight to Detroit costs $190, and a flight from New York to Denver can cost more than $300. What if we gave airlines the ability to offer low prices through promotions? Airlines that were profitable enough could make up the difference. It’s a win-win.
Under the proposed rules, airlines would be able to offer some form of “opt in” deal, in which passengers could select a pre-selected destination from a limited list of airlines that they want to fly with, then pay for a minimum number of journeys with that airline. This would be an interesting way to encourage more people to join a particular airline, since people are attracted to airlines for different reasons than prices, such as convenience. Under the proposed rules, airlines would also be able to offer ticket pricing directly to customers, which would allow consumers to see an airline’s service before the ticket is ever purchased.
The way airlines already handle ticket pricing is they price tickets in increments. For example, a ticket in Denver costs $120, and a ticket to New York costs $190. Under the proposed rules, a cheaper ticket would cost $70 more, and a more expensive one $100 more, to ensure a competitive price. This means that once the customer receives the ticket price, there’s really no way to change it. So, at the end of the day, the passenger pays for the benefit of a lower, lower price. Under the proposed rules, customers would be able to actually choose their own seat on a flight, not pay for it.