What factors account for the variation in airfares? Should airlines be permitted to get as much as they can for a seat?
You’d think that the farther you fly, the more expensive your airfare would be. According to U.S. Department of Transportation data, however, that’s not the case. For example, the average cost of a 280-mile flight from Boston to Philadelphia was $342, which is $1.22 per mile. A 2,602-mile flight from Boston to Long Beach, California, cost $169, or $0.06 per mile! That’s the average cost; fliers sitting next to each other likely paid different prices. Many factors influence the pricing of airfares; distance has minor impact, even though two major expenses—fuel and labor—increase the longer the flight. In this example, one factor might be that the Boston-Philadelphia route averages 484 passengers per day, while the Boston–Long Beach route averages only 330 passengers per day. Airlines claim they are just charging what the market will bear.