Nate Silver blogged yesterday at the New York Times about airfare, and he’s a smart guy who knows his regressions but he appears not to know very much about air travel.

His post is titled, Which Airports Have the Most Unfair Airfares? but his methodology is seriously flawed.

Almost as a throwaway he tosses out as fact that it’s best to shop for airfare on the weekends. He cites a paper that claims to show greater dispersion in airfares but “the same fare level on average.” And while it’s true that there’s less shopping for price insensitive business travel over the weekends, there are also fewer airfare sales, partly as a function of just having fewer scheduled uploads to the computer reservations. Prices change more quickly during the week, and more people are working during the week to change and adjust those prices than they are on the weekend. Still, some of the best deals are found on weekends precisely because that’s when price sensitive shoppers tend to have time to shop, and also because mistakes or fare wars last longer over the weekend, it takes more time for an airline to load new higher fares.

There’s no magical time to search for airfare, and much better tips can be found in various posts on this blog (just use Kayak.com, learn fare rules and find the lowest fare then search for flights with availability in those buckets, learn to dump fuel surcharges, search for cities where you can get cheaper fares while connecting through the city you want to travel to, etc). And there are similar suggestions for getting the best hotel deals as well.

Silver is certainly correct that on average some airports are much less expensive to fly out of than others, such as Milwaukee being a whole lot cheaper than originating in Chicago when traveling to many markets. Milwaukee is served by more low cost carriers and sicounters, Chicago is congested and simply doesn’t have the gate space or the ability to quickly turnaround an aircraft that’s necessitated by the business models of some of those carriers. And Chicago also has more price insensitive business travelers than Milwaukee does (agent problems inherent in spending other peopels’ money, also people with higher opportunity cost of time).

But when Silver assets that flying out of Newark is 25% more expensive than flying out of JFK, he misses:

  • That Newark has far more non-stop destinations than JFK, as Wandering Aramean notes. (And while that may entail lower costs, it also involves greater demand and New York’s airspace, gates, etc. mean that demand is met by limited capacity.)

  • That JFK is home to JetBlue, which drives much of the data for the single airport comparison.

Beyond simple comparisons Silver wants to get at “not where are the average fares highest, but where are they the most unfair.”

But he’s on pretty shaky ground when he tries to construct a moral framework for airline pricing.

I doubt anyone would dispute that it’s fair for an airline to charge you more for traveling a longer distance, so distance is something we’ll need to control for. I’d also argue that it’s fair to charge you more for flying into or out of a smaller market where there is less demand for air travel. Fewer economies of scale are available in a place like that: the airline can run fewer profitable flights each day, so the costs of ground services like check-in and baggage handling will be spread over fewer passengers, and aircraft may be idle longer.

At the same time, smaller airports tend to be served by fewer airlines, and lack of competition can lead to higher prices; that isn’t fair to the traveler. Nor is it fair if your home airport is one like Memphis, where discount airlines like Southwest have had trouble breaking in to compete with full-fare carriers, despite years of trying.

What we need is an approach that distinguishes airfares that are high because of monopoly pricing from those on routes that are legitimately expensive to fly.

Silver appears to build a “cost of production” moral theory of airline pricing, and posits monopoly as the cause of markets that he believes ‘ought’ to have more service than they do (and the lack of service is ‘unfair’ to the traveler). Except that his cost of production model even fails to understand airline costs, as he abstracts away from many of the key ones in his analysis.

Silver explains how he massaged his data. I’m not sure his ‘cleaning up of data’ to remove uber-expensive and uber-cheap fares makes sense, though I also don’t know whether his conclusions were sensitive to these adjustments. He looks at only domestic tickets flown in coach, but assuming that he means what he says — flown in coach, rather than purchased in coach — then presumably he excludes the trips of many frequent flyers regularly receiving upgrades. That has to skew the results.

Then he waives his hands at the extra distance and costs of connecting flights:

The first factor is the distance traveled — we use the distance from the origin airport to the destination as though it were a nonstop flight, whether or not there was a layover along the way (since the airline is not exactly doing the passenger a favor by routing her through, say, Baltimore on her way from Buffalo to Atlanta, increasing the number of miles flown).

I’d dispute the characterization that the airline is ‘doing something’ to the passenger by virtue of their routing, rather passengers generally select their routing. But that’s beside the point.

He wants a cost of production model of fairness, but connecting flights are inherently more expensive since takeoffs and landings are more expensive than flying distance. Somehow those costs don’t get factored into his notion of a fair price.

And connecting through a hub means costs associated not just with takeoffs and landings but also with a second airport, second gate agent, catering (even for just soft drinks), ground service. And hubs operate with significant labor costs that are often idle outside of banks of flights, in order to service passengers quickly. The hub and spoke model is about planes waiting on passengers rather than passengers waiting on planes, and that’s costly. (And is precisely what creates an opening for a carrier like Airtran in Atlanta which offers frequently longer connecting times — passengers waiting on planes instead of the other way around).

He also seems to draw conclusions from the data when his data doesn’t support causality.

Prices are higher the more the legacy airlines dominate an airport, but they also tend to be a bit higher where Southwest has a large share as opposed to other low-cost carriers like AirTran and JetBlue. (Southwest is cheap, but it isn’t quite as cheap as some of these up-and-coming airlines and now represents something of a middle ground.)

It’s true that Southwest isn’t that cheap and its costs also aren’t that low by many measures, it’s also true that Southwest is pretty darned methodical in picking the cities it serves and will often go in and lower prices relative to what came before, but is picking markets that can still support something other than rock-bottom pricing. Nothing in the claim suggests Southwest is high- or higher-price, and there’s no comparative analysis here of markets before and after Southwest entry. He simply claims too much.

Also, prices tend to be higher when any one airline dominates an airport, regardless of whether it is a legacy carrier or a low-cost one.

Fair, but several reasons for this. Sure, lots of competition drives down price but the very reason that those markets are dominated — outside of available gates and air traffic and subsidies — is often the same reason that prices are high, rather than the cause of the high prices. Otherwise additional airlines would add service . . .

More proof that Silver is out of his depths looking only at statistics to draw conclusions without knowing much about his subject matter — the case of Northwest Regional Airport in Arkansas.

Perhaps the most unfairly priced airport in America is Northwest Arkansas Regional in Fayetteville. Economy-class round trip tickets cost an average of $527 there, $158 above fair rates.

The reason, no doubt, is because the traffic there is dominated by business travelers on their way to and from the headquarters of Wal-Mart in nearby Bentonville. Although Wal-Mart is famous for its sensitivity to prices, and has saved consumers billions of dollars over the years, its pricing power evidently does not extend to the air fares its executives and clients have to cough up.

Of course, Silver has no idea what Wal-Mart pays in its corporate deals for airline tickets.

Northwest regional airport doesn’t have a mix of traveler types, it needs high frequency but with low number of seats per aircraft. Because it’s drawing business travel but not leisure traffic. It can’t support larger aircraft with lower seat costs as a result, and so the cost per enplanement is going to be much higher than at either larger metropolitan destinations or vacation destinations. And that’s precisely to cater service that matches the demands of air travel passengers!

None of which makes flights in and out of the airport “unfairly priced.”

Similarly, I’d love for Silver to stop and think about the following claim he makes.

Memphis, about 28 percent overpriced, is nearly as bad, because Delta controls about two-thirds of the passenger traffic and FedEx ties up a lot of the airport’s flight capacity with its shipping hub.

Can Silver explain, then, why Delta is de-emphasizing service through its Memphis hub? Further, he recognizes capacity constraints (oddly, in of all things the Memphis context more clearly than the New York one!) as a limiting factor on supply which influences price. And yet this is the only place where he acknowledges the role that cargo plays in airline pricing! Flights will often exist and cover fixed costs through their cargo operations, and then to the extent that they’re being serviced by passenger aircraft will see any passenger revenue as incremental. Cargo operations can generate cheap prices, but not all cities are major cargo centers.

Silver doesn’t get everything wrong, though:

Passengers in areas far from large cities — like La Crosse, Wis., or Minot, N.D. — tend to be the worst affected.

Indeed, Northwest Airlines execs used to say about this part of the country, “It’s cold, dark, and nobody wants to go there. But it’s all ours! (Cue “brouhahahaha!”).”

But even airports like the one nearest to where I grew up in Lansing, Michigan (about $117 overpriced) can go through a death spiral of sorts. Lansing is within a reasonable driving distance of Wayne County Airport outside Detroit, so relatively few people will choose to fly from Lansing unless its fares are competitive with Detroit’s. The airlines, rightly or wrongly, may take that trend to signify a lack of demand, and may cut service, with further price increases on the remaining flights. Before long, the only passengers who regularly fly out of an airport like Lansing are those who are extremely insensitive to price, creating a semi-stable equilibrium of limited but very expensive service.

Ding ding ding. You’re one of the few folks who wants to fly out of Lansing, rather than take advantage of the huge economies of scale out of nearby Detroit, you’re going to pay a premium to do so. Silver’s moral model, though, doesn’t really allow him to say that this is actually quite ‘fair’ instead of ‘unfairly priced’ based on distance and abstracting away from connections.

Indeed, despite the use of statistics, the exercise appears to reveal far more about Silver’s biases than it does about the way in which airfares are constructed.

Ultimately the important things to understand about airfare from a policy level is that even with a sense that airfares are currently “high” (and jet fuel sure is ‘high’!), they’re far lower than they were pre-deregulation… both on an inflation adjusted basis and in many cases even in nominal dollars. The beneficiaries have been consumers, not airlines, and certainly not airline shareholders as airlines have been wildly unprofitable over the past decade.

Some markets are more expensive than others, driven by the mix of passengers, barriers to entry, factors that generate delays and additional costs like congestion and weather, and the cargo environment. Few can claim airlines have been making “unfair profits” for the past decade, even if they can establish a better ‘moral’ theory of airline pricing than Silver does.

Instead of worrying about which airfares are “too high,” recognize that they’re lower now with airlines in control of pricing than they ever were in the regulated era when central planners were in charge of pricing. And recognize further that markets with significant subsidies for their air service tend to be on the higher side as well, there’s not a very strong empirical case for intervention. No matter what kinds of cute things you can do with statistics and with the imprimatur of the New York Times

  1. JetAway said,

    I think Nate is trying to broaden his portfolio but he should probably stick to politics.

  2. Perry said,

    alas, this is what happens when people think that they can use scientific method to prove something as subjective as ‘fairness’. as that saying goes, “lies, damn lies and statistics”

  3. Seth said,

    I couldn’t agree more, Gary. The numbers simply do not mean what he wants them to.

    I have no doubt that mathematically speaking the details are 100% accurate. But all statistics are based on assumptions and it is necessary to have assumptions that reflect the actual market in play, not the one that the author wishes were in play. This “analysis” seems very much to be the latter, not the former.

  4. scl said,

    Despite Silver’s lack of familiarity with the airline industry, I found his article much more rigorous and cogent than your response.

    The things you disagree with him on are matters of assumptions and judgment, not fact.

    For example, the complaint that Silver treats non-stops the same as connecting flights — you are forgetting that the hub and spoke system is an invention of the network carriers, not something demanded by the travelers. Southwest’s business model emphasizes point-to-point travel, and it is still able to keep costs and airfares low. Why should the passengers pay for the extra costs of a hub and spoke business model, when that model results in more connections and less convenience for the traveler?

    Some of your other points are just plain odd. You think JFK has an unfair advantage over Newark because it is the home of JetBlue? That’s precisely the point — when a low cost carrier enters the market prices decline.

    I stopped reading your article halfway through because of the sarcasm and smugness. If you want to be taken seriously by readers outside of the Flyertalk/Milepoint nerd circle, you may want to tone down the gratuitous snarkiness.

  5. Gary said,

    @scl “The things you disagree with him on are matters of assumptions and judgment, not fact.” My point is precisely that looking at the data you cannot draw the conclusions that Nate Silver does. I’m offering my “assumption and judgment” as alternative explanations that fit with the data, which demonstrates that the ‘facts’ don’t speak for themselves or imply Silver’s conclusions. And also that 90% of the argument is a value-laden one (about fair or just airfares) and not an empirical or value-neutral one.

    “For example, the complaint that Silver treats non-stops the same as connecting flights — you are forgetting that the hub and spoke system is an invention of the network carriers,”

    No, i’m not forgetting, I’m saying it matters fo rthe data analysis because he abstracts away from a driver of cost at the same time he argues that fairness in fares is based on cost. That’s a big flaw in the analysis.

    “Why should the passengers pay for the extra costs of a hub and spoke business model, when that model results in more connections and less convenience for the traveler?”

    Does it really? It makes it possible to have tons of options with high frequency to go between cities that wouldn’t on their own justify non-stop service…

    “Some of your other points are just plain odd. You think JFK has an unfair advantage over Newark because it is the home of JetBlue? That’s precisely the point — when a low cost carrier enters the market prices decline.”

    It’s not an ‘unfair advantage’ rather I was explaining an important factor driving the data.

    “I stopped reading your article halfway through” which seemed worth repeating :)

  6. David said,

    Gary — I think most of your response is intelligent and well-argued, but your last sentence in this paragraph (“otherwise other airlines would add service”) is absolutely incorrect:

    “Sure, lots of competition drives down price but the very reason that those markets are dominated — outside of available gates and air traffic and subsidies — is often the same reason that prices are high, rather than the cause of the high prices. Otherwise additional airlines would add service . . .”

    There is a wealth of information about how incumbent carriers defend their monopoly position and keep long-term prices high. American and Delta have both done this against Southwest (and other LCCs, such as ValuJet), and against one another. This was the subject of a major antitrust case the DOJ brought against American.

    There is a lot of material available on this — the American antitrust proceedings and associated economics were even memorialized in a frequently taught Harvard Business School case.

    The DOT put the issue best:

    “In recent years, when small, new-entrant carriers have instituted new low-fare service in major carriers’ local hub markets, the major carriers have increasingly responded with strategies of price reductions and capacity increases designed not to maximize their own profits but rather to deprive the new entrants of vital traffic and revenues. Once a new entrant has ceased its service, the major carrier will typically retrench its capacity in the market or raise its fares to at least their pre-entry levels, or both. The major carrier thus accepts lower profits in the short run in order to secure higher profits in the long run. This strategy can benefit the major carrier prospectively as well, in that it dissuades other carriers from attempting low-fare entry. It can hurt consumers in the long run by depriving them of the benefits of competition.”

    (this is from the Federal Register; available online at: http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?IPaddress=&dbname=1998_register&docid=98-9488-filed)

    It isn’t hard to use Google to establish a reading list on this issue — predatory airline pricing is a popular topic in antitrust economics, and as a result the American antitrust case is one of the more studied antitrust cases of the past 20 years.

  7. Gary said,

    @David I don’t think the evidence is as well established on that as you do, actually.

    1. You cite Delta’s anticompetitive practices “against ValuJet” but they’re now Airtran and doing quite well against Delta, and were acquired by Southwest.

    2. You cite American’s anticompetitive responses to Southwest, but those were mostly LEGAL challenges not challenges with substantial service and low price. (ie suing against their very existence). American’s attempts to drop fares and flood service have been anything but successful, in fact Southwest CHASED AMERICAN out of Dallas Love field when they tried this. Note also that American’s responses to Legend were primarily legal, it was the legal expense that buried Legend more than anything else.

    3. Silver cites low cost carrier Allegiant as precisely model service. Though I’d argue it isn’t (point-to-point with erratic frequency isn’t much of a growth engine). He certainly sees strong low cost carrier competition as viable.

    4. Nowehere did I suggest that Southwest had to enter a market, nothing prevents a network carrier from doing so…

    5. Airlines fight fare wars every day and this isn’t about incumebnt carriers, yesterday American dropped fares out of United’s Dulles hub to Honolulu to sub-$400.

    6. Fear of competitor response hardly kept JetBlue from bringing down fares in the DCA-BOS market over the past few months, which had been dominated by US/DL for years.

    Government anti-trust lawyers argue about this all the time, and not every low cost carrier succeeds. But Southwest and JetBlue are fairly strong, Allegiant is profitable, and competitton isn’t just about startups. Delta, American, United, and US Airways enter new markets all the time and look for profit-making opportunities. Hihg fares don’t necessarily signal above-average profits, as the past decade of airline financial results can attest to.

  8. JohnnieD said,

    Just my 2 cents on ‘low fare carriers’…. I had to fly my daughter home from MSY to attend a funeral. With a 36 hour window I checked all airlines for the lowest fare and Southwest came up the cheapest @ $930. The closest fare on a legacy was $1200. So I ‘saved’ $270 (sorry, $25 for checked bag), actually $295 by flying Southwest. So my point is that Southwest was the LOWEST fare but by no means was it a LOW fare.

    I never consider one airline to be THE lowest at any one time. As a matter of fact I have found, with a few exceptions, that on an advanced purchase, that Southwest is usually more expensive.

  9. Ben said,

    To me, “fair” pricing is the price that customer X is willing to pay at time T for their trip from point A to point B, and that is it. If tickets aren’t priced properly or the airline can’t cover fixed costs for the price consumers are willing to pay, the airline either changes the prices or ceases to do business (in that market or altogether). That’s how a market works.

    After reading his article, I am reminded of this video from an old Conan show http://www.youtube.com/watch?v=8r1CZTLk-Gk . The whole thing is pretty funny, but there are airline specific jokes starting around 2:00

  10. Dan said,

    Thanks for your follow up comment on the BA 100,000 mile thing the other day, it’s much appreciated.

    As an ex-industry guy (and now academic) I absolutely love it when non-industry academics try to draw conclusions from government data. There are *so* many intricacies in understanding the data, it isn’t even funny. FWIW, I worked with the 2007 version of the data set that this guy used when I worked on my masters thesis.

    It’s correct to control for the “low” fares. It’s my understanding that the DOT includes frequent flyer tickets in this same, and those come it an a zero-fare. When I looked at the data, I don’t recall the DOT issuing a disclaimer for unusually high air fares. I also don’t recall the data being granular enough to show an elite upgrade. The data are fares *paid* not flown. So I’m not sure how he derives that, unless they’ve recoded the data since I’ve looked at it.

    My favorite is FedEx’s impact on MEM — you know, the freight carrier that does a lot of its flying at night. How much does its daytime operations really impact the passenger traffic?

    Really, this guy’s analysis just demonstrates that airlines with fortress hubs have a lot of pricing power at said hubs, and those large airports without a dominant carrier don’t have said markup. But we all know that.

    But what is fair? Business travelers want high frequency flights. Those come with a cost. Business travelers want non-stop flights. Those come with a cost — connections come with a discount. Some of his conclusions are valid, but the methodology is, um, interesting.

  11. David said,

    @Gary —

    Government lawyers usually fail in their antitrust arguments on this issue anyway (they lost the AA case, both in the District Court and on appeal). I didn’t mean in my post to indicate that it was somehow “right” or “wrong” of the airlines to do this, or that government intervention was the answer (my use of the DOT may have been misleading on that point). But airlines (AA in particular) have pursued pre-announced price decreases and strategic pricing as a *successful* competitive strategy for quite some time. Here is an actual chronology of what happened in the DFW-MCI market in the 1990s (this summary is from a case we did in b-school a few years ago):

    – In 1994: AA has 8 roundtrips, Delta has 6
    – In 1995, Vanguard adds 3 non-stops
    – Fare falls from $108 to $80
    – Fare decrease means Vanguard reduces flights to 1 round-trip
    – 1995, May: Delta withdraws because route unprofitable
    – May-June: AA adds six more roundtrips, at a “loss”
    – December: Vanguard exits
    – AA cuts back from 14 to 11 (February) and to 10 (July)
    – Fares up 80% over prior year ($112 to $147)

    Vanguard’s entry was actually good for AA. In duopoly markets where one carrier is dominant, it is sometimes a long-run winning strategy to encourage an LCC to enter (and then chase them out).

    Since prices shot back up, Vanguard tried to re-enter in 1996, this time by attacking AA on multiple fronts:
    – September, 1996 Vanguard announces it is reentering
    DFW-MCI and also DFW-CVG and PHX
    – AA speeds up start date for two new roundtrips to MCI
    – Adds 3rd round trip starting Nov. 1, for total of 13
    – AA attacks Vanguard DFW-Wichita market by substitutes narrow-body jets for commuter aircraft, flooding seats
    – AA attacks Vanguard in DFW-CVG (AA had previously given up route as unprofitable)
    – AA increases frequency in DFW-PHX market
    – ValuJet takes a beating and eventually downsizes and exits key routes at DFW

    The competitive dynamics of whether to enter a market move far away from pricing and into Game Theory. It is extremely clear that there is an incumbency advantage — which isn’t to say that the advantage cannot be overcome, but rather that monopolists can often charge high rents without worrying about a new entrant.

    This is critical to Southwest’s (and, to a lesser extent, JetBlue’s) strategy: when Southwest enters a market, they never enter it in a “small” way. They usually enter it with a complete slate of departures to match the offerings of current carriers. Southwest’s management is on record as this being a key part of their strategy.

  12. AS said,

    This was a disappointing response. The original Nate Silver article is colored with references, evidence, etc. Gary’s text often is too, but not today.

    Today’s rebuttal is frequently opinion and innuendo, not analysis or fact-based. For example, the criticism of the data massaging is filled with hypothesis that I personally didn’t agree with. Nate’s original explanation rang truer than Gary’s rebuttal – such as the zero-cost fares, high fares, upgrades, etc. Gary’s responses were in cases literal but missed the points. For example, “Of course, Silver has no idea what Wal-Mart pays in its corporate deals for airline tickets.” may be factually true but the data are for that airport and are correct, whether Walmart paid those fares or their customers/suppliers is not Nate’s point: the point is that airfares are high at that airport.

    When Gary agrees with Nate, it’s done with a tone of condescension. All of the following are representative of areas where Gary agrees with Nate’s conclusions, yet you’d never know it from the tone. “Almost as a throwaway he tosses out as fact that it’s best to shop for airfare on the weekends.” “It’s true that Southwest isn’t that cheap and its costs also aren’t that low by many measures” “Ding ding ding” “Silver doesn’t get everything wrong, though”.

    Worst of all, though, I think Gary misses the fundamental point. It wasn’t a moral argument at all. It was an economic model. Nate’s model showed that at large airports, where large players dominated market share they are exercising significant pricing power that is to the detriment of people using that airport. Yes we all knew that, but Nate quantified it. Every time you fly out of EWR instead of JFK or LGA, you are paying a higher rate due to the influence of a major market participant. Nate doesn’t argue that its unfair for Continental to charge that fare, he argues that a consumer is paying an inflated, distorted price. At smaller airports prices are generally higher especially as communities are smaller and less well served. Yes we intuitively suspected that too. But it’s quantified. With this analysis, you *can* calculate how much more it will cost, per flight, per year, etc.

    Measuring that economic cost, to consumers and businesses, was the purpose of the article. Personally, I think Gary and several other people who fancy themselves industry ‘insiders’ just totally misunderstood what Nate wrote.

  13. Gary said,

    @AS Wrote:

    For example, “Of course, Silver has no idea what Wal-Mart pays in its corporate deals for airline tickets.” may be factually true but the data are for that airport and are correct, whether Walmart paid those fares or their customers/suppliers is not Nate’s point: the point is that airfares are high at that airport.

    If Silver stuck to the facts, that would have been great, but he was hypothesizing the reasons for those facts. And I was explaining that the reasons didn’t make sense. Wal-mart may not be paying hte average fares (due to corporate deals) and he assumes constant costs in his analysis of what fares would be ‘expected’ and thus what are ‘unfair’ when higher than expected. But the sort of traffic the market demands in and out of XNA is much higher cost to provide — high frequency but fewer passengers, smaller aircraft because airlines can’t fill larger aircraft with that traffic, yields much higher cost per enplanemnet than lesser frequency (fewer planes, fewer takeoffs and landings, larger aircraft yield lower per-seat costs).

    Worst of all, though, I think Gary misses the fundamental point. It wasn’t a moral argument at all.

    Of course it was, Silver spends a good bit of time laying out what constitutes ‘fairness’ and consistently references ‘unfair’ fares. That’s a moral argument.

    You found other, more relevant points in his article but frankly need to strain in reading the article in order to do so.

    It was an economic model. Nate’s model showed that at large airports, where large players dominated market share they are exercising significant pricing power that is to the detriment of people using that airport.

    The first part is true, it was a model, and I do not question his data (for the most part). But the claim that the people are harmed at the airport is precisely what I contended doesn't clearly follow from the model, precisely because he doesn't understand the reasons for pricing that are behind the effects he identifies in the model.

    Gary and several other people who fancy themselves industry ‘insiders’ just totally misunderstood what Nate wrote.

    Perhaps, though I would hypothesize that if this is true it’s a function of reading what he wrote, rather than what he meant. :)

  14. Chris Darland said,

    Well! this comment will be in a very different vein than what’s been written so far…
    BUT…Gary, in the second large paragraph, you mentioned a number of good tips in searching for airfare. I’m not exactly sure how I’d search for those on your blog, as they were full sentences of info. Any way you could do a post providing links to your posts, whether comprehensive or not? I know about some of those things, but fuel dumping, connecting through the city you want to travel to, and availability of fare buckets are all things I need to learn more about.

    Thanks!

  15. Chris Darland said,

    Ha! I just read the Mar 30 post about fuel dumping, and realize I may have asked for info that is nto s’posed to be openly known. :) Other tips that are a bit less “secretiv” might be helpful, though. Thanks for what you do!

  16. FiveThirtyEight: Reads & Reactions | Il Neurone USA said,

    [...] critical emanate with Nate’s rankings of a many over- and under-priced airports: Gary Leff during View From a Wing and Seth during The Wandering [...]

  17. Reads & Reactions | new york said,

    [...] critical emanate with Nate’s rankings of a many over- and under-priced airports: Gary Leff during View From a Wing and Seth during The Wandering [...]

  18. View from the Wing in Other Media - View from the Wing said,

    [...] My criticism of Nate Silver’s New York Times take on fairness and disparity in airfares leads their roundup of online reaction to his writings. While it’s certainly interesting to do statistical analysis of airfares, I take issue with the conclusions he draws from the data analysis. As one of my commenters observed, how can Fedex be taking up most of the capacity at Memphis, squeezing aut all the potential air service that would come ot the city and bring down prices, when the bulk of their activity is late night? [...]

  19. Brian said,

    **Instead of worrying about which airfares are “too high,” recognize that they’re lower now with airlines in control of pricing than they ever were in the regulated era when central planners were in charge of pricing. And recognize further that markets with significant subsidies for their air service tend to be on the higher side as well, there’s not a very strong empirical case for intervention.**

    I don’t see where Mr. Silver was making a case for intervention. He was just pointing out various quirks in airline pricing. I didn’t infer and don’t believe he was implying that it would be favorable to have pricing like was in place in the 1970’s.

  20. AySz88 said,

    He wants a cost of production model of fairness…

    Of course it was, Silver spends a good bit of time laying out what constitutes ‘fairness’ and consistently references ‘unfair’ fares. That’s a moral argument.

    These are probably some of the most ridiculous things I’ve ever seen. By “fair”, Nate meant a price that a consumer should view as advantageous. Period. The numbers don’t care about how airlines arrive at that price, and especially not “cost of production”.

    I think it’s obvious that you misunderstood. Perhaps as context, you should have read the first article in the series – the one about getting a fair deal out of by-the-pound salad bars.

  21. Rocky said,

    There are a number of other areas where his logic doesn’t hold up.

    “the airline can run fewer profitable flights each day, so the costs of ground services like check-in and baggage handling will be spread over fewer passengers, and aircraft may be idle longer.”

    Actually, it’s more likely the case that they contract with other airlines or airport-based companies to provide ground services. The turns at these airports are quicker because it’s often out-and-back and you’re not waiting for connections.

    “Memphis, about 28 percent overpriced, is nearly as bad, because Delta controls about two-thirds of the passenger traffic and FedEx ties up a lot of the airport’s flight capacity with its shipping hub.”

    FedEx flights aren’t exactly competing for runway/tarmac capacity given that the vast majority of them are in the early morning hours.

    The reality is that people are buying different products and you can’t really compare them. His analysis bundles together leisure and business products. If you ran the data, you’d likely find that for the “unfair” cities, there was a high variation from the mean. For the “fair” cities, there is a low variation.

  22. Kaitlin said,

    I had trouble getting past this assertion:

    “Then he waives his hands at the extra distance and costs of connecting flights”

    To waive something means to relinquish it. Unless Mr. Silver is wearing two prosthetic hands and is standing at the TSA gate at LaGuardia, how is he going to relinquish his hands?

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