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Comment by bradly | Hacker News Reader

A couple days a found a round-trip flight from Montreal to Paris with a layover in New Jersey for $762. I tried to book the exact some flight, but starting in New Jersey, and it was over $1,400. This sort of this is crazy. Is anyone really surprised that airlines keep going bankrupt?

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Its not that crazy when you look into it more. Montreal to Paris is a low yielding route filled mostly with price-conscious tourists. New York to Paris has, as a percentage, substantially more business travel, which can sustain higher fares. For each route, the airline (presumably Continental) is trying to extract what it sees as the maximum price the market is willing to bear.

As another example, Des Moines to Dallas as discussed in this article. American has the only non-stop flights between those two cities, and any connection is going to add at least 2 hours to your travel time (based on a quick glance). On the other hand, nobody has a nonstop between Des Moines and Los Angeles, so American has no competitive advantage there and cannot command a huge price premium.

That makes sense, but you could argue that there is a cost associated with upsetting and frustrating your customers that maybe the airlines aren't taking into consideration. Something can't be right with their models if they are going bankrupt again and again.

It is my understanding that airlines going bankrupt again and again is a direct result of their relationship with their pilot unions:

http://philip.greenspun.com/flying/unions-and-airlines

That, $100/barrel oil, and a mediocre economy.

The airline industry has long been a money-loser, price of oil and state of economy not withstanding.

Would you prefer that they raised the prices of the Montreal to Paris trip so that you can pay more?

Or do you want them to lower the price of the Newark to Paris trip so that it sells out early and people who would have been willing to pay $1400 for that trip can't get to where they want to go?

False dichotomy. If there are really that many people who want to fly EWR->CDG, but don't due to cost considerations, the airlines will add more flights to fill extra demand caused by lower prices.

If they can charge that much, "theoretically" it means they would make more money adding an extra flight on that route.

They didn't, that means adding an extra flight might have been a lot more expensive. (due to, e.g. regulation limiting the number of planes in that route).

Based on the principle of charging the maximum price the market is willing to bear, would you consider it ethical for a company like Amazon to charge more or less based on the affluence of the billing zipcode for each customer? /honest question

I think it would be ethical, although bad business. Both price discrimination methods, by the way, are defeatable. You can drive an extra few hours to another airport (have done this many times), and you can get your packages shipped to another address.

Sure both are defeatable, the question is whether doing so is worth the time and effort for the amount saved.

What's not ethical about it? No one is forcing you to buy.

But it's probably not good business, since people get irritated by things like that and shop less.

I suppose it doesn't matter whether the seller thinks it's unethical. What matters, as you point out, is that the average consumer probably would.

OK, knowing this strategy employed by the seller, a buyer opened a PO Box at a near by less-than-affluent neighborhood and shipped her purchase there. Would you categorize this customer's behavior unethical?

They basically do this by country code. I find Amazon.de is cheaper for some a lot of things than Amazon.co.uk or Amazon.fr.

Amazon.com has the lowest prices of them all. Its usually cheaper, and faster, for me to order books and gifts from the US site, pay international shipping and customs than it is to order from the local site, who may not get it for months if at all.

There are a lot of merchants on Amazon.com (the US site) that won't ship internationally. But you can still buy from them and get international shipping if you use a package forwarding service. Try http://bit.ly/gN2oGK You can save a ton of money for exactly the reasons you mentioned: prices on the US site are much cheaper, even with international shipping.

In any industry, price is not derived from cost. The market sets the price, irrespective of cost, which is why companies go bankrupt, especially airlines.

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