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I tried to book a ticket in British Airways but because of the 'Fare' i opted Fly emirates. I know this might sound dumb, but is it due the availability of 'Gas' in particular nation. For example if i want to travel to Australia from USA its more cheaper in Middle east based Airliner than other Airliners, to top that even Australian airlines couldn't match there low prices.

I need a detailed explanation why does it vary from one company to another and besides i do not have any unrequited love towards Middle east Airliners or anything, i just want to know why they are always so cheap irrespective of time?

closed as unclear what you're asking by LessPop_MoreFizz, Gagravarr, Mark Mayo, Karlson, mindcorrosive Sep 20 '14 at 19:22

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    I just had the dilemma that Fuel played major role and to be honest whenever i searched ticket prices its always the above mentioned people who pops out with less prices.So, Yes in a way its more about 'Economics' but still its one of those questions where it can go either way. – TravelBub Sep 20 '14 at 3:43
  • Airlines generally hedge fuel costs - so what they are paying depends mostly on how good their bond traders are – NobodySpecial Sep 20 '14 at 17:25
  • @pnuts more accurately futures trader. But it is ironic that for someone like Ryanair, the skill/luck of their fuel hedging is probably the main profit decider – NobodySpecial Sep 21 '14 at 18:20
2

Why Airfares vary from One Airline company to another?

  • Because they can

  • Because they hope it will help them to stay in business.

Fuel price is a component of overall cost.
So is aircraft purchase or leasing, salaries, maintenance, taxes, subsidies (-ve costs (hopefully)) and more.

When all is said and done they hope to make enough money to still be there next year.
Low cost seats may get you more volume.
Higher cost seats may get you more profit - possibly substantially more.

However, I' heard it claimed from various sources, that the average profit of the airline industry since the start of commercial flight is ... drum roll ... 0%.
ie the most successful scrape by. The less successful disappear. "Market forces" keep everyone keen to make a profit. Opinion on how to best do this varies.
Factors like state ownership and subsidies skew the equation.

2

They are all trying to make the most money.

A, You could charge more, hope to only part fill the aircraft but get more revenue than filling it with low revenue passengers. To do this you need to keep a reputation for high quality service so people don't mind paying more. But it can't be too good or the same people won't buy business class.

B, You could charge less but then you need to be sure that you will totally fill the aircraft. Since a full high seat density aircraft isn't pleasant you know your customers won't be as happy so you rely on either non-repeat or occasional travelers or those who will only pay the lowest fare. But the conditions might mean you have a better chance of selling upgrade seats.

Then there is the question of how to adjust prices. If you are a 'B' and leave a seat empty you are losing money, it would be better if you sold the seat for even 10% of the list price. But if you are known to do this people will wait until the last minute. Alternately if you are a type 'A' airline it might be better to have an emptier plane with more space. On the other-other hand if you are an 'A" then a sale might allow people who wouldn't normally fly with you to get a taste of the good life.

Interestingly these same things were worked out 150years ago by the first railways, who would make the 3rd class coaches deliberately bad to persuade people into 2nd class. Or pay chimmney sweeps to travel 2nd class to force office workers (who needed to keep clean) to travel 1st class.

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