bringiton
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Sat Oct 14, 2006 8:27 am

Why is buisness class so much more expensive as opposed to Economy class ? I was checking out BA for ticket prices to go to LHR from JFK and the cost difference was huge b/w buisness and economy . Can we equate this in any way for eg - how much more space does a buisness class seat take as opposed to economy ? How many more FA's per passenger ( fraction ) etc etc !!
 
star_world
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Sat Oct 14, 2006 9:03 am

Working it out that way will result in some difference, but will not come close to accounting for the gap. The reason it's so high is that is what the market will tolerate on routes like this. BA operate 10 flights a day between the UK and New York, and it's one of their busiest premium routes - it can often be hard to get a seat in business class. From a business point of view for the airline it makes complete sense, you price the product at the upper end of what the market will pay.

As a perfect example of this, try setting the originating location to somewhere like AMS or LIS on the BA.com site (leave the destination as JFK) and look how dramatically lower the prices are. This is because a passenger starting in AMS has other options to get to the US, and BA prices its offering to attract customers like this too. You can end up in an identical seat, on an identical flight for the longhaul portion (eg: if you flew AMS-LHR-JFK) but yet pay 25% of what the UK-originating passenger paid!

What you'll also find is that for many other routes around the world, the difference between economy and business is much smaller. LON-NYC is probably one of the more "inflated" ones due to the huge amount of business travellers .
 
Viscount724
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Sat Oct 14, 2006 9:09 am

The short answer is because people are willing to pay those high fares. If they weren't, the fares would come down. But as long as you can fill your premium seats at $3000, you're not going to want to charge $2000.

There are of course numerous cost-related reasons for higher business class fares but there's rarely any direct connection between economy and premium class fares. It's largely a matter of supply and demand and charging what the market will bear.

Fortunately for the airlines, but unfortunately for their customers, the UK and LON in particular is one of the world's strongest origin/destination business travel markets, and has long resulted in the less-price sensitive premium fares being significantly higher than many other points in Europe. That's not likely to change anytime soon.
 
dstefanc
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Sat Oct 14, 2006 9:50 am

There is one more thing to add. The reason that Business Class seats are so expensive is because the Economy seats are so cheap. The airline must compensate somehow with the low cost of economy seats, and it does so by charging more for business class. Back in the day the difference was much smaller, because economy seats used to cost much more than today.

D
 
a3
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Sat Oct 14, 2006 5:03 pm

Quoting Viscount724 (Reply 2):
The short answer is because people are willing to pay those high fares. If they weren't, the fares would come down. But as long as you can fill your premium seats at $3000, you're not going to want to charge $2000.

So true!!!

I still wander what is the average load factor.
I know that economy offered seats are about 85% .
If it is more than 50% I think that the prices will remain High.
Don't spend your money on airlines that don't respect your business.
 
TheSunseeker
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Sat Oct 14, 2006 7:23 pm

Passengers are willing to pay those large amounts because they arrive relaxed.
Simple example: you fly from London to New York for a 6h meeting in Economy,
you will need to stay there for a night because otherwise you will basicly die :p

Take the same trip in business class, you will arrive relaxed and be able to fly home straight after the meeting. Means you can be back at work "at home" fresh the next day.

Thats why there will always be people willing to pay the price.
They arrrive more relaxed, so they need less time to recover from a flight,
means they can work more  Smile
RSA: Dont drink and drive - take the train and get mugged
 
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Starlionblue
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Sat Oct 14, 2006 7:37 pm

Quoting Bringiton (Thread starter):
Why is buisness class so much more expensive as opposed to Economy class ? I was checking out BA for ticket prices to go to LHR from JFK and the cost difference was huge b/w buisness and economy . Can we equate this in any way for eg - how much more space does a buisness class seat take as opposed to economy ? How many more FA's per passenger ( fraction ) etc etc !!

With your logic, cost should be the only basis of price. But you forget the role of supply and demand. These place the price at current level. The cost of the service does not.

The airline seeks to make a profit, not simply recoup cost plus a small markup. Also, as Dstefanc points out, Business class on many routes is the main money maker while Monkey class barely breaks even. If Business were not prices thus, Monkey would be more expensive.

Having flown Biz and Monkey over the pond numerous times, I would say that the difference in experience is vastly more than just the size of the seat and the food. Being able to stretch your legs out completely, not bumping into a neighbor, having a foot rest, getting a glass of wine, being able to go to the crapper without climbing over other pax, and so forth, enables you to arrive somewhat refreshed and relaxed as opposed to tired and tense. If you have to work on arrival, this makes a huge difference.
"There are no stupid questions, but there are a lot of inquisitive idiots." - John Ringo
 
TGV
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Sat Oct 14, 2006 10:43 pm

Quoting Starlionblue (Reply 6):
With your logic, cost should be the only basis of price. But you forget the role of supply and demand. These place the price at current level. The cost of the service does not.

Basic principle of free market economy.

Quoting Star_world (Reply 1):
From a business point of view for the airline it makes complete sense, you price the product at the upper end of what the market will pay.

As a perfect example of this, try setting the originating location to somewhere like AMS or LIS on the BA.com site (leave the destination as JFK) and look how dramatically lower the prices are. This is because a passenger starting in AMS has other options to get to the US, and BA prices its offering to attract customers like this too.

This is also true for Eco fares.

So in the end the airline will charge less for a connecting flight (let's say JFK-LHR-AMS) than for the direct flight WHICH IS IS A PART of the connecting flight (JFK-LHR).

This means that you will pay less for something more expensive to produce (from the airline point of view, they have to accommodate you on the connecting flight), and worst for the environment.

A perfect example of why free market economy HAS to be regulated, especially for the environmental impacts.
Avoid 777 with 3-4-3 config in Y ! They are real sardine cans
 
georgiaame
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Sat Oct 14, 2006 11:26 pm

It is called a "market economy" They charge what the economic market is willing to bear. Of course the prices are absurd! But silly people, me included, are willing to pay for the amenities.

As proof of the invisible hand of the economic market, you may wish to explore several web sites for Business class sales. There are multiple airlines with an "I" fare, which greatly discounts the seat to about $2500 rt between the US and Europe. (Rather than, say $6000 rt) You pay 50-60 days in advance, essentially have the same restrictions on the ticket that you would have on a 14-21 APEX economy fare, but you do fly business. CO has been running a fall sale for the past several years for about $1200 rt. They know in advance that the seats won't sell at the stratospheric prices, they are discounted and filled.

I think the real question should be, why do some carriers continue wasting valuable aircraft volume on First Class seating, which no one ever pays for, when that space could be generating Business Class revenue? This is one lesson Delta really got right in 1998 when they introduced their Business Elite product. (Which alas, really needs a major overhaul for the price they charge)
"Trust, but verify!" An old Russian proverb, quoted often by a modern American hero
 
fbgdavidson
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Sun Oct 15, 2006 12:12 am

In short the difference between Economy pricing and Business Class down to price elasticity of demand. I suggest Googling it, but in short it reflects the proportional rate at which demand is influenced by raising and lowering prices. This of course ties in with supply and demand.

The PEd is rather different between J and Y. A larger proportion of Y travellers in the back are price driven (i.e. cheapest ticket available). So increase prices by 10% and you lose 15% of your customers. OTOH, Business class is more product driven and a 10% increase may mean you only lose 5% of your customers. This was certainly more marked in the 90s when a higher proportion of companies were paying for J longhaul.

You could also tie in the influence of corporate policies...the Fortune 100 company I work for has a list of four preferred airlines with whom we have discounted rates. If we fly with another airline we get taken to the cleaners. The numbers of people flying within the company mean the airlines win easily even on discounted rates, knowing we are over a barrel somewhat with our corporate policy.

Quoting GeorgiaAME (Reply 8):
I think the real question should be, why do some carriers continue wasting valuable aircraft volume on First Class seating, which no one ever pays for, when that space could be generating Business Class revenue?

On a logistical front it sometimes isn't possible to replace the F cabin with more J seats. One that springs to mind is the F suite products in the nose of the 747. Because of the shape of the nose you can't get that many more J seats in than you can F seats. A fair number of routes are filled with fare-paying passengers in F class, especially on airlines with a decent F product that you can't use stickers or vouchers to upgrade into  Wink
"My first job was selling doors, door to door, that's a tough job innit" - Bill Bailey
 
rdwootty
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Sun Oct 15, 2006 12:28 am

If you are going to do this then what about the STN option? Maxjet is " old Style" business class and EOS is more upmarket and both are lower than the old codgers at LHR
 
pa201
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Sun Oct 15, 2006 7:29 am

Also, the vast majority of business class seats are filled by corporate business travelers whose companies enjoy discounts of 20,30, even 40% via their contracts with the airlines. Only a small amount of business class seats are occupied by travelers paying the actual published full fare.
 
GuyBetsy1
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Sun Oct 15, 2006 7:33 am

Quoting Bringiton (Thread starter):

Have you looked at the fare for First Class?
 
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Starlionblue
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Sun Oct 15, 2006 9:11 am

Quoting TGV (Reply 7):
This means that you will pay less for something more expensive to produce (from the airline point of view, they have to accommodate you on the connecting flight), and worst for the environment.

A perfect example of why free market economy HAS to be regulated, especially for the environmental impacts.

What makes you think regulation would improve things? If you take the extreme of regulation on a decent scale, Soviet Russia, you can see how well that went. Environmental, social and economic disaster.

I'm not against some regulation in principle. I'm against the unregulated application of regulations.  Wink One needs to be very very careful introducing imperfections in the market.

Quoting GeorgiaAME (Reply 8):
I think the real question should be, why do some carriers continue wasting valuable aircraft volume on First Class seating, which no one ever pays for, when that space could be generating Business Class revenue?

By "no one ever pays for" I presume you mean everyone ugrades into it? First of all, automatic upgrades are pretty much a North American phenomenon, even with US carriers. On international flights (outside NA) for American, for example, upgrades to status travelers are only given if the original class is full. Also, an upgrade or a reward is hardly a loss for the airline. Bonus programs are big moneymakers. Finally, plenty of people do actually pay those F fares, whether full or discounted.
"There are no stupid questions, but there are a lot of inquisitive idiots." - John Ringo
 
Elite
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Sun Oct 15, 2006 4:36 pm

For example there are bigger seats, better IFE and the food is better... when you see how many Business class seats there are and how many economy seats can be added in the place of the business class seats, the price evens out.
 
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Starlionblue
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Sun Oct 15, 2006 9:02 pm

Quoting Elite (Reply 14):
For example there are bigger seats, better IFE and the food is better... when you see how many Business class seats there are and how many economy seats can be added in the place of the business class seats, the price evens out.

I don't agree. Even if you could put 4 economy seats in place of one biz (you cannot) the biz seat tends to cost more unless you're talking full fare economy,
"There are no stupid questions, but there are a lot of inquisitive idiots." - John Ringo
 
jumbojet
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Mon Oct 16, 2006 12:05 am

Quoting Pa201 (Reply 11):
Also, the vast majority of business class seats are filled by corporate business travelers whose companies enjoy discounts of 20,30, even 40% via their contracts with the airlines. Only a small amount of business class seats are occupied by travelers paying the actual published full fare.

This is 100% correct information. And to ad to that you then have the frequent fliers or platinum medallion members (In DL's case) that get the upgrade certificates that allow upgrading to a business class seat when you purchase a coach seat in Y,B, or M class.

business class seat without discount from JFK to MAD costs $4,000

same seat for PM member upgrading from M is $1,600.00

and a deeply discounted coach seat on same flight sells for $660.00
 
TGV
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Mon Oct 16, 2006 12:10 am

Quoting Starlionblue (Reply 13):
What makes you think regulation would improve things? If you take the extreme of regulation on a decent scale, Soviet Russia, you can see how well that went. Environmental, social and economic disaster.

I'm not against some regulation in principle. I'm against the unregulated application of regulations. Wink One needs to be very very careful introducing imperfections in the market.

Since the totally free market leads to the global stupidity I mentioned (and for me this shows that the market alone is imperfect in itself), we need something to help it to give more acceptable results.

I am not advocating a Soviet style system, of course.
But some regulations that would help the market to consider not only the private companies short term profits, but also global consequences of their activities.
Avoid 777 with 3-4-3 config in Y ! They are real sardine cans
 
bayareapilot
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Mon Oct 16, 2006 2:41 am

Quoting TGV (Reply 17):
Since the totally free market leads to the global stupidity I mentioned (and for me this shows that the market alone is imperfect in itself), we need something to help it to give more acceptable results.

So any pricing scheme you don't like is imperfect and stupid? How exactly do you propose to find the "perfect" price?
 
TGV
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Mon Oct 16, 2006 6:03 am

Quoting BayAreaPilot (Reply 18):
So any pricing scheme you don't like is imperfect and stupid? How exactly do you propose to find the "perfect" price?

I don't know if you read my initial post when I was saying:

Quoting TGV (Reply 7):
So in the end the airline will charge less for a connecting flight (let's say JFK-LHR-AMS) than for the direct flight WHICH IS IS A PART of the connecting flight (JFK-LHR).

This means that you will pay less for something more expensive to produce (from the airline point of view, they have to accommodate you on the connecting flight), and worst for the environment.

I am in no way an economist, but for me, a system in which the price of something is not connected to its cost (selling cheaper two flights than one of the two flights) is something which is not logical.
And this is even before taking into account the indirect cost of environmental nuisances.

So I let economist design an adequate pricing system, integrating all aspects, and not only some private companies short term profits.
Avoid 777 with 3-4-3 config in Y ! They are real sardine cans
 
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Starlionblue
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Wed Oct 18, 2006 1:43 am

Quoting Jumbojet (Reply 16):
This is 100% correct information. And to ad to that you then have the frequent fliers or platinum medallion members (In DL's case) that get the upgrade certificates that allow upgrading to a business class seat when you purchase a coach seat in Y,B, or M class.

This only applies to some airlines. As a rule, you only get auto-upgraded on intercontinental if your class of service is full or if you use your limited supply of upgrade certificates.

Quoting TGV (Reply 17):
Since the totally free market leads to the global stupidity I mentioned (and for me this shows that the market alone is imperfect in itself), we need something to help it to give more acceptable results.

I am not advocating a Soviet style system, of course.
But some regulations that would help the market to consider not only the private companies short term profits, but also global consequences of their activities.



Quoting TGV (Reply 19):
I am in no way an economist, but for me, a system in which the price of something is not connected to its cost (selling cheaper two flights than one of the two flights) is something which is not logical.



Quoting TGV (Reply 19):
So I let economist design an adequate pricing system, integrating all aspects, and not only some private companies short term profits.

This economist is cringing. I would agree that the capitalist system breaks down when large projects with long payback timescales (e.g. Eurotunnel) are involved since private investors can make the same money by investing several times shorter term with less risk.

However, I am loath to give control of this sort of thing to "someone". The results speak for themselves. "Free market" economies are the most powerful in the world, with the richest inhabitants per capita, BECAUSE they are free. Socially acceptable or not, a large spread between the richest and poorest is in many ways beneficial.

Removing "excess profits" from companies is punishing them for succeeding in creating value for their shareholders. This simply means they will have less of an incentive to do well, or more likely just move profits overseas. Either way is bad.

The best thing is provide a consistent environment and not mess with it unless something is blatantly broken. Government is notoriously bad when they try to "fix" the market. The problem being that legislators tend to be just as short sighted and parochial as corporations. Any assumption that they look at the long-term good of the entire country/state/city is flawed.

I'm not saying capitalism is perfect. It is deeply flawed in many ways. However it's better than the rest of them. To paraphrase Churchill: "Capitalism is the worst possible system, except for all the other ones."
"There are no stupid questions, but there are a lot of inquisitive idiots." - John Ringo
 
TGV
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Wed Oct 18, 2006 8:51 am

StarlionBlue,

I have to agree with a lot of what you wrote about capitalism.

My problem is how to integrate in this "less bad system" elements that are not taken into account by it.
Take environment, which is for me an important problem (considering the moral obligations we have with our children or grandchildren).

There are not many examples of firms voluntarily integrating in their production process environment friendly measures, if these measures cost something to them: obligations have to be imposed by a higher authority, the state or whatever you will call it. And there is a good reason, why would some companies choose to support a higher burden than their competitors? It is not in their own interest.

The only way is to have everybody be forced to comply. And to do so the only way is to regulate (intelligently, here begin the difficulties).

But I would be interested if you have a different solution.
Avoid 777 with 3-4-3 config in Y ! They are real sardine cans
 
sllevin
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Wed Oct 18, 2006 6:27 pm

Two things:

1) A business seat takes up about 3x the space of a coach seat;

2) because of that, business inventory is much more tightly controlled, so you don't find many super deep deep discounted fares being offered.

If you compare business class fares to more mid-range coach fares, you'll find the differential on them is much less.

Steve
 
N1120A
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Wed Oct 18, 2006 6:48 pm

Quoting Starlionblue (Reply 6):
The airline seeks to make a profit, not simply recoup cost plus a small markup.

Actually, you just described a profit.

Quoting Starlionblue (Reply 6):
Also, as Dstefanc points out, Business class on many routes is the main money maker while Monkey class barely breaks even. If Business were not prices thus, Monkey would be more expensive.

How about not using such an insulting pegorative as monkey in relation to economy class?
Mangeons les French fries, mais surtout pratiquons avec fierte le French kiss
 
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Starlionblue
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Wed Oct 18, 2006 8:31 pm

Quoting TGV (Reply 21):
But I would be interested if you have a different solution.

I wish. And so do many other people. "Intelligent regulation" is the big problem facing modern governments. Rregulating based on voter (and sometimes media AKA perceived voter) pressure is relatively easy in the short term. And so you get an insecure environment in which companies and individuals have no idea what will happen next. "Should I save or spend? Should I re-invest or cash out?" Crucial questions important for the economy in general.

I would also like to see more focus on environmental issues. However unchecked environmental legislation in the short term could be bad for the economy in the short time. Long term planning, for example gradually raising pollution taxation over 10 years, ensures both positive environmental impact and fewer hiccups for the economy. However, politicians need to be reelected every 3-5 years, so their planning horizons are not long enough. After three years they lose patience and start thinking about re-election. Enter populism.

There is something to be said for non-elected power, at least for part of government. An aristocracy is much more concerned about the long term and in theory not as subject to short term pressures. Another option would be having one houses elected for 20-25 years at a time and the other for 5. In any case the longer term needs somehow to be taken into account.

I am not really optimistic, however. Politicians have a stronger incentive to be re-elected than to do something truly statesmanlike because the rewards for the former outweigh the ones for the latter. Call me a cynic.

Quoting N1120A (Reply 23):
Quoting Starlionblue (Reply 6):
The airline seeks to make a profit, not simply recoup cost plus a small markup.

Actually, you just described a profit.

Sure. But far from all are simply markups like that. If they were, the economy would be pretty stagnant.

Quoting N1120A (Reply 23):
How about not using such an insulting pegorative as monkey in relation to economy class?

Choose to be offended if you like. I call it humor. And for the record I fly Monkey Class all the time. After all, we share 99% of our DNA with many apes.  Wink

[Edited 2006-10-18 13:35:54]

[Edited 2006-10-18 13:36:13]
"There are no stupid questions, but there are a lot of inquisitive idiots." - John Ringo
 
nudelhirsch
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Wed Oct 18, 2006 8:32 pm

This cannot be serious...
Putana da Seatbeltz!
 
Lufthansa
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RE: Business Class Cost!

Thu Oct 19, 2006 12:07 am

TVG..

I'd like to point something else out. The concept of yeild management is also related. You explained that it was basically bad because it lead to an airline charging less for something that cost more to produce. But consider this. Lets say those seats would have gone unsold otherwise. If that were the case, we'd have the same environmental damage done but nobody benefited from it, or infact worse because additional aircraft would be deployed from AMS to cater for the increased demand for a direct service (+plus the onsold seats via LHR), and it would possibe push the cost of services like AMS-LHR up because of fewer paying passengers on those flights. Now there are many many complex examples to be brought in, that work both ways, but the above one alone shows that it possibly isn't as inefficient as it seems on the surface. Passengers don't all travel in nice 747 sized alotments and fly directly from A to B in uniform volume. So perhaps just another way of looking at it?
 
mptpa
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RE: Business Class Cost!

Thu Oct 19, 2006 3:48 am

Quoting Star_world (Reply 1):
As a perfect example of this, try setting the originating location to somewhere like AMS or LIS on the BA.com site (leave the destination as JFK) and look how dramatically lower the prices are. This is because a passenger starting in AMS has other options to get to the US, and BA prices its offering to attract customers like this too. You can end up in an identical seat, on an identical flight for the longhaul portion (eg: if you flew AMS-LHR-JFK) but yet pay 25% of what the UK-originating passenger paid!

Like you said, if you put this in an economics sense, it goes like this... There are diferent types of customers hose demands are dissimilar: the cutomers whose demands are inelastic (read as business travellers). And then there are market demands that are elastic (read as leisure travellers). In the LHR-JFK route, there is a lot of customers whose demands are inelastic includes businessman (financial markets) who make last minute trips, short trips, day trips and have needs to change travel plans at the last minute. The demand is very high. Similar arguments go for leisure traellers, but they are budget conscious and the supply is aplenty. To maximize profit, airlines will use something alled third degree disciminatory pricing, which matches the marginal cost and marginal demands of each market segment. Therefore, the revenue earned from the few business travellers are high compared to marginal revenue earned from many leisure travellers. Airlines use the premium class to make the money they lose with budget group.

Now, the price is determined by what the market can bare.. If the price is too high, the a/c goes empty (ie no takers at that marginal cost), and if it is too less, there will be a shortage of seats. Airlines do not set the price out of no where; it is decided by th emarket (you and me)... Why would they pay more not the leisure travellers? They see the value in paying more... Arrive relaxed, work while flying, rest and sleeep for the meeting, get out of the line fast through immigration an customs, etc.


Thi sis the airline business in a nutshell.
 
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Starlionblue
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RE: Business Class Cost!

Thu Oct 19, 2006 10:02 am

Kudos to Mptpa for explaining it in microeconomic terms. I'm getting serious university flashbacks. Big grin
"There are no stupid questions, but there are a lot of inquisitive idiots." - John Ringo
 
TGV
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RE: Business Class Cost!

Thu Oct 19, 2006 10:07 am

Quoting Lufthansa (Reply 26):
I'd like to point something else out. The concept of yeild management is also related.

First of all, your example of selling a seat at the last minute and with a discount price to avoid have it flying empty is a very specific case.

In the examples I have looked at in detail (namely CCS-CDG versus CCS-MAD-CDG, CCS-FCO-CDG, and CCS-MAD versus CCS-CDG-MAD, etc.), and where this difference appeared, it was for travel dates far in advance, not last minutes sales. So the airlines strategy is in place well in advance.

Furthermore all airlines do not use this tactic of last minutes sales, to avoid people waiting the last minute to buy their tickets. Usually you will find the lower prices when buying with a lot of anticipation, and having to pay your ticket right away, so the money arrives quickly in the airlines account, where it can be used long time before you use the airline service.

But anyway, let's consider this specific case of last minute travel.

So we have a last minute passenger who wants to fly from JFK to LHR, and has two possibilities: a direct flight, and a JFK-AMS-LHR option (we will consider this JFK-AMS-LHR option as 1 flight called "connecting flight" to simplify the reasoning).

Two cases: if one of the two is fully booked, the passenger has only one option: if he really needs to travel he will pay what the airline asks for. No need to discount.
If he is price sensitive, then he will not fly if the ticket price is too high. In that case the airline can prefer to sell at discount price than fly an empty seat. Anyway the price should be higher than the marginal cost for the seat. As the marginal cost for the connecting flight is higher than for the direct flight, the price asked should be higher for the connecting flight than for the direct flight.

Of course the airline does not know if the passenger is price sensitive or not, and can elect to discount, to be sure. But this does not change anything to the fact that a higher production cost should lead to a higher price!

If both flights have empty seats (and assuming both airlines use the last minute discount sale tactic), both airlines will discount their seats, considering that everything above marginal cost is good to take. OK but in this case the airline with the higher production cost (the connection airline) should sell at higher price than the other, because its marginal cost is higher.

Of course airlines have no way to know in what situation is the passenger, or in what situation is the competition flight (in real life cases are more complex, as we would also have JFK-FRA-LHR, JFK-CDG-LHR, etc.). So if they choose to discount, they will do so in function of their marginal cost. And we come back to the problem that the connecting flight having a higher marginal cost, it should not be sold at a lower price.

In reality if the connecting flight is sold at a lower price it is because the connecting airline knows its offer is less competitive than the direct flight (travel time, annoyance of a connection) and tries to compensate this by a lower price. So not only its marginal cost is higher, but its revenue is lower: in the end its margin is lower.

For me the conclusion of this example is that if airlines elect to discount seats at the last moment, they will have to sell suboptimal services (connecting flight) at lower price than better services (direct flight), even if it costs them more to produce.
So for the airlines this means a reduction of their margin. In our example, maybe 5 minutes later the seat could have been sold at a higher price for a JFK-AMS passenger (and if we assume there are always a lot of free seats, then we have over capacity, and the "perfect market" should lead to a capacity reduction to avoid these empty seats flying around every day!).

Looking at the environmental side, this pricing system will induce our last minute passenger to use the less environment friendly flight (more miles flown, more take-off), as it is cheaper.

The only potential winner here is the passenger who would be able to select or the more comfortable/more expensive option, or the less comfortable/cheaper option. But if it is a lat minute flight will he have the time to analyze all possibilities?

So really I think it is difficult to say a totally free market is perfect, and some regulations would be required to better it, so it takes into account all other factors.

But I totally agree with Starlionblue excellent analysis  thumbsup  regarding the difficulties of regulation, and the fact that our short-sighted democracies are not able to do intelligent enough regulations. I may be a cynic also!

[Edited 2006-10-19 03:09:32]
Avoid 777 with 3-4-3 config in Y ! They are real sardine cans
 
YULWinterSkies
Posts: 1266
Joined: Thu Jun 09, 2005 11:42 pm

RE: Business Class Cost!

Thu Oct 19, 2006 10:39 am

Quoting TGV (Reply 7):
A perfect example of why free market economy HAS to be regulated, especially for the environmental impacts.



Quoting Starlionblue (Reply 13):
What makes you think regulation would improve things? If you take the extreme of regulation on a decent scale, Soviet Russia, you can see how well that went. Environmental, social and economic disaster.

Why, as soon as someone is introducing the word "regulation". someone else has to jump into the other extreme to say that regulation should not be the way to go? We are talking about regulation of capitalism here, not abusive socialism. (clarification : abusive IMO because socialism was initially intended to be for the good of ALL people, but ended up being for the good of A FEW people who abandoned everyone else) Please don't compare apples and oranges.

Quoting Starlionblue (Reply 13):
I'm not against some regulation in principle. I'm against the unregulated application of regulations.   One needs to be very very careful introducing imperfections in the market.

I basically agree with both of you guys though, and enjoy reading both of you.

Quoting TGV (Reply 29):
Looking at the environmental side, this pricing system will induce our last minute passenger to use the less environment friendly flight (more miles flown, more take-off), as it is cheaper.The only potential winner here is the passenger who would be able to select or the more comfortable/more expensive option, or the less comfortable/cheaper option. But if it is a lat minute flight will he have the time to analyze all possibilities?

Again you are right TGV but, to me, the cheapo last minute pax will likely fly Y whereas the wealthy direct-flight one will likely fly J. If you balance the amount of fuel burned per Y pax on LHR-FCO-ATL-JFK vs the fuel burned per J pax on LHR-JFK, the weird connecting routing still wins. My reasoning is that 1 J seat takes 4 Y seats (or whatever it is exactly) and that for about the same amount of fuel you could carry 3 more people if all seats were Y.

To replace the topic in a larger environmental frame, I don't think that it is by being last minute than we can pretend becoming more environmentally-friendly...
When I doubt... go running!
 
Lufthansa
Posts: 2303
Joined: Thu May 20, 1999 6:04 am

RE: Business Class Cost!

Thu Oct 19, 2006 11:31 am

Quoting YULWinterSkies (Reply 30):
To replace the topic in a larger environmental frame, I don't think that it is by being last minute than we can pretend becoming more environmentally-friendly...

Bingo! This was my point exactly. I mean if we all booked at roughly the same time in advance, and all filled the aircraft at equal levels of demand for each flight (that is, each departure time is equally as popular) we could simply send the most efficient aircraft, (say the 773 prop) and fly it only as often enough to fill it nicely and get the idea efficieny. THEN... then looking at number of takeoffs and distance you actually fly would make sense. In reality, it is very very difficult to measure because the world is a complex place and people's lives are complex. What i mean to say is, lets say we've got a wealthy London crowd that are going to go no matter how much it costs...and they're willing to cover the cost of the aircraft no matter what (say leaving half that plane empty). It wouldn't be more environmentally friendly to then run say another widebody out of AMS in addition would it? Obviously you can argue it both ways...but that is exactly my point. It is just too hard to say if in reality (rather then just looking flying distance and no of takeoffs) if it is actually less efficient. It is very hard to calculate. The best thing you can do is work on producing more fuel efficient aircraft, or perhaps an alternative fuel source that is more environmentally friendly.
 
N1120A
Posts: 26468
Joined: Sun Dec 14, 2003 5:40 pm

RE: Business Class Cost!

Thu Oct 19, 2006 11:55 am

Quoting Starlionblue (Reply 24):
Choose to be offended if you like. I call it humor. And for the record I fly Monkey Class all the time. After all, we share 99% of our DNA with many apes.

We are apes, but that is behind the point.
Mangeons les French fries, mais surtout pratiquons avec fierte le French kiss