Revisit the Fare Structure

Today’s hub-and-spoke airline routes and fare structures are a legacy from the early days of deregulation in the late 70s, when fuel was cheap and the airlines were in a boom, able to expand to new cities and establish new hubs at a pace that was dizzying at best. The lowest fares today are for three leg connections--where the airplane has to take off and land three times, the individual on each leg is displacing someone who could have been on that plane going a shorter distance, and there are such built-in costs as ground crews, flight crews and the flight support systems.

While I realize that three-leg connections aren’t the norm and are considered “illogical” by GDSs and consumers alike, online consumers have been trained to buy the lowest fare, which should by all rights be for the lowest-cost route for the carrier, using the least amount of fuel ... point to point if available, and one stop or a single connection if possible. The same thing is true in frequent flyer miles redemption, which also encourages two- and three-leg connections, even when there is a nonstop available.

Maintaining millions of fare changes daily in the complex distribution system that we have today is enormously expensive. It is time for the airlines to revisit this arcane fare structure as a first line of defense to improve utilization and cost efficiency.