Hacker News Reader

Comment by kylec | Hacker News Reader

This is a good presentation about the complexities in creating and pricing itineraries:

http://www.demarcken.org/carl/papers/ITA-software-travel-com...

Most companies don't want to take on this complexity, so they outsource it. The companies that provide this service, like ITA, tend to charge more money for more expensive queries, like multi-day searches, so most online search companies will only let you do the cheaper kinds of searches.

View on HN

I wonder if it would be viable to start an airline whose business model is "simple pricing". Just forget ITA altogether, sell tickets directly, and have the pricing model extremely simple. Like, total price = C/(time to departure) for some constant C, and use machine learning, or just a simple PID feedback loop on revenue to set C in order to be profitable.

As the presentation above suggests, this would have a problem with, well, staying profitable. Tourist air travel is so heavily underpriced that you can barely tank up the jet with what you collected from people. That's one of (or maybe even the) reason for such variety in ticket prices.

Airlines spend a absolute fortune on complex pricing for a reason... they wouldn't survive (in the absence of protectionism or a natural monopoly on niche routes) without it. The optimum "one size fits all" price doesn't exist.

You pretty much described Southwest Airlines.

I don't think this would work unfortunately. Players in air travel face a) intense competition and b) tiny profit margins. This forces some 'creative' pricing.

Reply on news.ycombinator.com