It makes sense. Do not get me wrong, this is true – but even then I knew it was a gross over-complication. It only really made sense in the premium cabin, where passengers made their airline selection on a factor other than pricing. Airlines don’t actually deal in seats; a seat is kind of a nebulous thing that cannot be quantified easily.
Airlines deal in unit cost and unit revenue. You’ve all probably heard the term CASM (Cost per available seat mile) thrown around, same with RASM (Revenue per available seat mile). Well, when you buy a seat, you are buying capacity on the flight at a specific fare.
It gets worse, because the available seat mile is extremely perishable. It’s gone, forever, once you close the door. There are a good deal of complex price discrimination strategies employed by airlines to ensure that their customers never pay less than they ought to – but before I hurt your heads with complex math and graphs, allow me to completely change the tone of my argument.