Why are commuter flights so expensive?

I'm guessing the thought process is held in two parts:

1) They have to charge a higher price to fly to Cedar Rapids because
there will always be fewer people demanding that flight than a flight to
Vegas. Presumably, there will be 3 times as many people flying to Vegas
than to Cedar Rapids, and so the Cedar Rapids price is three times that
of the Vegas Flight.

2) If they drop the price 30 minutes before flight time, I doubt they
will make more money, since it takes an hour to get through security and
all. Figure there is a cutoff time - maybe the noon before, as an
example - when heavily discounted fares would be picked up and consumed
by last minute fare customers who otherwise would have driven. However,
at the same time, we all know that premium-priced last minute business
trips make up the most profitable ticket sales for the airlines.

I'm guessing that someone in management of the airline has evaluated
(read: gut feel) that it would generate less profit to offer 5 last-minue
$100 deals, than to get 1 jacked-up last minute $500 deal.

Not sure what the right answer is, but the bottom line is, as I'm sure
you know, pricing is not just about covering overhead, it's about
maximizing profit...

What I'm surprised more airlines DON'T do is offer inexpensive upgrades
for already-paid passengers. The upsell is such a big profitmaker!


"Jay Honeck" wrote in
news:fIspd.85397$V41.82999@attbi_s52:

Here's a mystery that I just cannot answer:

To fly to Las Vegas from Chicago costs $99.00. (For example.)

To fly to Cedar Rapids from Chicago costs $300.

Naturally, at that price practically no one flies on that plane into
Cedar Rapids.

Question: WHY do the airlines that fly into Cedar Rapids insist on
flying back and forth with mostly empty planes? Would it not make
sense, say, 30 minutes before departure, to drop the price until the
plane was full? This is basic "Econ 101" -- if empty, lower the price
until demand matches supply.

Their actions seem to defy logic. In the lodging industry, you're
going to find rooms are discounted much more aggressively after 10 PM
than they are at 3 PM, simply because no innkeeper wants to sit empty,
and the odds of being able to charge full-rate at that time of day are
slim. Yet no airline seems to do it this way, at least on the short
hops.

If it were MY airline, I'd sure as hell rather make a hundred bucks
than nothing!

There must be something else in play here -- anyone know?