After witnessing a move by a specific airline on some routes, I wonder if it is legit to fly a route, without economical profit and on the red, with the sole purpose of choking any other airline that tries to enter the route?
For exemple, let's say I'm flying LHR-JFK and there's an airline flying 10 daily 747 services all below a 10-15% load factor, and although possessing an excelent feeder network, there's so much dispersion on the route that you can't simply enter it profitably.
This is a sort of price dumping, but in another form. Is this allowed?
Isn't there the rule that the direct costs have to be at least secured (earned)? Cause charging less then 100% (=standard price) is IMO allowed and on some routes necessary.
Sorry, you are right. I mixed up terms ... thought 'minimum price' and wrote 'standard price'. Charging tickets above minimum price (see flight calculation) is allowed. One have to keep in mind, that the minimum price depends on the flight (i.e. the direct costs) and not the route.
I thought passengers liked cheap flights, because its like that in the real world?
Customers would love to get everything for free.
The airline however should not offer their tickets if the price wouldn’t cover the direct expenses.
That’s what AS’ minimum price is for.
A real airline would of course calculate their prices different. In AS connecting pax need to sum up prices for both individual legs (both >minimum price) while the real airline would calculate a “package” in a way that the price total for the whole trip would cover the direct expenses.
