> Actually, the airlines use rather complex revenue
> models to set fares. Our resident LNG might even be
> familiar with the models. Essentially, the goal is to
> maximize revenue for each flight.
>
> This is because the cost to operate any individual
> flight is pretty closed to being fixed. The
> incremental cost of adding or savings from subtracting
> another passenger is pretty low. A little more fuel,
> another pack of pretzels, and another can of diet
> coke.  :D
>
> So the airlines don't care if the plane is full or
> half-empty, they only care about how much money was
> collected before takeoff. If it is half full of
> business passengers, the revenue total is higher than
> a plane full of tightwad tourists!
>
> Of course, this economic model results in considerable
> confusion among the airline customers....

While what you say is true, you've left out several significant factors
including competition for the route, scheduling of planes needed at a
specific location in order to accommodate other, possibly high profit
flights and the freight, mail and similar items that add revenue to each
flight.

It's more complex than even Cochran's tweaking formulas.

Lee