is it possible that airlines have arrivals quotas or limits in certain airports, or pay per passenger which arrives at an airport? this could cause what looks like "batshit" pricing.
Isn't it more just straight up price discrimination, which is totally legal?
Like, obviously they'd prefer to fill the NY -> SF jet with high ticket price customers, but if there are seats leftover, it's still better to fill them with people making lower cost connections to elsewhere than to have them be empty. And if they need to get those people to Tahoe or wherever anyway, then putting them on that plane may also be preferable to putting the last few NY -> SF ticket on fire sale and undermining the usual higher price.
Like, obviously they'd prefer to fill the NY -> SF jet with high ticket price customers, but if there are seats leftover, it's still better to fill them with people making lower cost connections to elsewhere than to have them be empty. And if they need to get those people to Tahoe or wherever anyway, then putting them on that plane may also be preferable to putting the last few NY -> SF ticket on fire sale and undermining the usual higher price.