Why Airline Competition Is Important – Hub Buster Airline Ticket Pricing
With the looming merger of United and Continental reducing legacy airlines to four (from six) the past couple of years — I thought it would be good to chat a bit about what the effect of airline competition or the lack thereof means to ticket pricing.
I have been noting that taking an airline off the board, any airline, is on whole detrimental to passengers who crave cheap flights.
This point was driven home with me tonight as I received one of our real time airfare price drop email alerts for Houston (I monitor Houston since my father-in-law lives near) showing a price drop from Houston to Newark to $154 roundtrip – an excellent price anytime but even more so for summer travel.
I knew something was up instantly because you'll never see this sort of airline ticket price from Continental between their two largest hubs (not if they can help it).
My guess was that someone tossed in what I like to call a "hub buster" airfare. This type of predatory airfare pricing happens from time when an airline is upset with another for something it has done and tosses in a lowball airfare to rattle their competition cage – usually because that airline has done something to them elsewhere to garner their ire.
Even more interesting was the fact that they filed the new price on an odd day and time, Thursday evening, which is usually reserved for airfare hikes and sale expirations.
One click to our flexible search from the email confirmed my suspicion, the current world's largest airline Delta had tossed a "hub buster" in what I suspect would be much to the delight of for June travelers to the New York metro area for a lowball $154 roundtrip.
In case you're wondering how this one-stop price compared to Continental, a guess of 3 times higher would have been about correct with a difference of a couple hours in elapsed flying time.
I am not saying that we should depend on lowball airline tickets all the time, but this is a classic example of why competition is so important in airline pricing.
Note also the huge discrepancy in the new connecting price versus the nonstop price, 3 times more for leisure travelers (over a thousand dollars for a family of four!).
So when someone says mergers won't change the basic price of airline tickets – don't buy into the spin…