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Yesterday there was an uproar all over the web that all the airlines were price gouging those evacuating Florida from hurricane Irma. Some airline people quickly jumped in and said supply and demand and they can charge whatever they want. Clearly the airlines, including Delta, got the message and adjusted their pricing to more rational maximum levels.
But some on the web are claiming the airlines are doing all this for “charity” and are “losing money” on these flights. Well, maybe not so much. Let’s look at the numbers per FlightAware.com
Delta, per the numbers yesterday, was charging across the board $189 for a coach ticket one way. Well, the median price for that ticket on a given day would be $169 and FareDetective.com suggests the average price is $162. So hardly a losing fare I would say. As to 1st class, sure that is about half price off the median price but considering they are making about an extra $20 per coach ticket, and selling out each seat and flying 100% full as well, I think they will come out just fine on those few discounted 1st class seats! 😉
The other airlines at $99 may be taking a bit of a hit but not by that much. Heck, if Frontier charged $99 that would be a premium over the normal median price for this flight.
So like all things on the web, take the info with a grain of salt. If some are claiming the airlines are price gouging that is likely way over blown and not true. But at the same time, when airline folks tell you the airlines are doing these flights for charity or flying at a loss – that also is not in line with the facts either! – René
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It is all about PR. They may lose money for couple days on couple flights but will gain appreciation for what they did during difficult times and people will remember them. The money will come back in another way.
@Santastico – Agree plus now no fight with FEDs after the event.
The data used for your analysis does not include information about historical last-minute ticket purchases vs. ticket purchases made this week. The fares are going to be higher only a few days before departure, as the airlines structure their fares that way on purpose to make a higher margin from last-minute tickets, so this is nothing new. Comparing current prices to the overall average paid fare doesn’t tell us anything about how much of a profit margin the airlines are making (or losing) on these flights.
@George – You are missing my point. I am not talking possible earnings just are they loosing money. The latter is doubtful at least for Delta. Plus, bottom line, they are also doing the right thing.
In addition, there are normally tourists and other flying INTO Florida. Guess how many are heading there now? Delta is likely flying almost empty planes (and losing a lot of money on those flights) just to get planes to the Florida airports to get people out. I don’t envy their situation.
@JohnHace – Don’t feel too bad for Delta. All those people will have to fly back home at non discounted rates one day.
The more important thing, I think, is that they are getting people out of danger. 🙂 Much like this amazing crew! https://twitter.com/AirlineFlyer/status/905477074449784832
@Hari – Yes. That link was included in yesterdays post: http://renespoints.boardingarea.com/2017/09/06/delta-makes-right-call-florida-flights-prices-ahead-hurricane-irma/
You also have to remember delta isn’t charging any baggage fees to/from these cities, or Unnacompanied minor fees, or pet fees. lots of lost revenue.
@deltaflyer – Again, not talking regular day earnings just if these flights are flying at a loss. I do not think they are. Break even maybe yes but not a loss.
They probably are losing money, since they are capping some fares far below the normal price for last-minute tickets. I agree with you that it is kind for DL to proactively reduce prices, even when they don’t have to.