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Irregularities In Business Class Prices  
User currently offlineATL From United States of America, joined Nov 2011, 68 posts, RR: 0
Posted (3 years 6 months 3 weeks 6 days ago) and read 4730 times:

Hey guys,

I was just randomly fake booking flights (seeing what aircraft type, departure times, etc) for KLM in business on the flight JFK-AMS-JFK. The price tag came up to 8,179 USD. I then decided to compare, assuming that BA's JFK-LHR-JFK would have a higher (or at the very least, slightly above) price tag, due to what I believe is a much superior business class product, and it didn't! I decided to be fair and book DFW-AMS-DFW on BA instead, so FOUR FLIGHTS, one of which is not in a OW hub. The price? 6550 USD. I then thought that perhaps there was room for debate as to how good of an airline BA in business is relative to KLM (never flew KLM in business, I have done BA in J a number of times however, and loved it). Thus, I decided to see how much EWR-SIN-EWR would cost on SQ in business class (an 18 hour flight mind you, on one of the best airlines out there). The price? 6,975.82 USD. Roughly 1,100 Dollars less than KLM's inferior product on a much much shorter route. I then checked AA's business class flight DFW-LHR-DFW. The price? Over 9000 dollars. I understand that AA's cabin is fine, but how is it possible that a shorter flight, with an inferior product, on a hub to hub route, can be 2000 dollars more than the SQ flight? I also checked VS, JFK-LHR-JFK in upper class; the price? 5,016 dollars. That's over 3000 dollars saved! UA's business class on EWR-LHR-EWR? Over 10,000 dollars! Why? I am at loss. Why is it that airlines without the best product charge way more than their competitors? And why are US airlines so expensive with regards to First and particularly Business class? I think US airlines' product on both is pretty damn good (albeit it could improve if you ask me), but I don't think a J flight on United from EWR-LHR-EWR should be worth twice JFK-LHR-JFK on BA in J. Can anyone please tell me why airlines are doing this? Doesn't this drive customers away? Is there logical reasoning behind this? I would to hear an explanation for this one.

By the way, I hope all you fellow KLM fans weren't offended, I'm sure KLM is a fine airline in its own respects, but you cannot convince me that SQ>KLM in J.

Thank you!

6 replies: All unread, jump to last
User currently offlineViscount724 From Switzerland, joined Oct 2006, 29464 posts, RR: 24
Reply 1, posted (3 years 6 months 3 weeks 5 days 23 hours ago) and read 4587 times:

Airlines set their fares based on demand in each market and fares vary drastically from day to day and route to route, depending on the market situation and competition. You can't compare prices over a short period of time since one airline may be operating at high load factors and can thus charge high fares for the remaining seats and another carrier may be half empty due to different demand characteristics. Differences in product have little to do with it.

Personally KLM is one of my preferred airlines since AMS is such an excelleint connecting hub and that advantage offsets minor product differences. KL's on-time performance is also good in my experience and I like their style of inflight service which is efficient and friendly and their aircraft are always clean and in excellent condition. I also usually find KL's fares very competitive.

User currently offlineATL From United States of America, joined Nov 2011, 68 posts, RR: 0
Reply 2, posted (3 years 6 months 3 weeks 5 days 23 hours ago) and read 4582 times:

LHR T5 is a great hub, so is SIN. Also, both have friendly service. So maybe it's just yield?

User currently offlinecofannyc From United States of America, joined Jan 2007, 215 posts, RR: 0
Reply 3, posted (3 years 6 months 3 weeks 5 days 21 hours ago) and read 4567 times:

You're also seeing just a tiny snapshot of what is going on and a snapshot that is affected by things like current bookings and how many seats are left in the cabin (not to mention historical demand, the cost of turning away a booking, and the myriad of other things that go into a revenue management forecast).

For the sake of comparison, here are the range of published fares (for the sake of comparison: outbound 05Feb13, return 12Feb13) for all of the routes and carriers you referenced:

KL NYC-AMS-NYC: $4526 - $9748
BA NYC-LHR-NYC: $2244 - $13514
BA DFW-AMS-DFW: $4626 - $13384
UA EWR-LHR-EWR: $2244 - $12686
SQ EWR-SIN-EWR: $7856 - $13890

Some flights may be selling towards the low end, some towards the top, some might have non-published sales only available through certain channels.

I should also note that you are truly comparing apples to oranges since (with the exception of the BA/UA NYC area-LON flights) are the same product. Different markets are different products regardless of the quality (perceived or real) of the amenities in the cabin.

User currently offlinefbgdavidson From United Kingdom, joined Oct 2004, 3831 posts, RR: 26
Reply 4, posted (3 years 6 months 3 weeks 5 days 19 hours ago) and read 4534 times:

Airlines don't necessarily charge based on being able to cover the cost of the flight, they'll charge whatever they feel they can get for them on the open market. Hopefully that is enough to pay for lugging the aircraft about!  

Don't forget that convenience comes at a premium, and often at the expense of comfort so DFW-AMS-DFW on KL is bound to be pricier than DFW-LHR-AMS-LHR-DFW on BA, despite the superior product on the latter.

"My first job was selling doors, door to door, that's a tough job innit" - Bill Bailey
User currently offlinerwsea From Netherlands, joined Jan 2005, 3286 posts, RR: 2
Reply 5, posted (3 years 6 months 3 weeks 3 days 6 hours ago) and read 4354 times:

KL/DL have a monopoly on the AMS-JFK route. KL also regularly charges a premium on nonstop flights to AMS. If you were to look at, for example, JFK-AMS-LHR on KL vs JFK-LHR on BA, you'd probably see that KL is cheaper than BA. Most people are willing to pay extra for the nonstop convenience.

User currently offlinelonghauler From Canada, joined Mar 2004, 6054 posts, RR: 43
Reply 6, posted (3 years 6 months 3 weeks 2 days 6 hours ago) and read 4260 times:

Quoting ATL (Thread starter):
By the way, I hope all you fellow KLM fans weren't offended, I'm sure KLM is a fine airline in its own respects, but you cannot convince me that SQ>KLM in J.

KLM charges what they do, because they can.

If they couldn't charge what they do, then they wouldn't. That is all part of being a successful business, airline or not. Clearly if comparing their product to SQ, and losing, was costing them revenue, then they would fix it. It isn't so it hasn't been "fixed".

Pricing irregularities occur all the time with respect to airline fares. The biggest mistake is when a passenger thinks it has something to do with distance when is has more to do with competition and revenue maximization.

Just because I stopped arguing, doesn't mean I think you are right. It just means I gave up!
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