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Faro
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Cost Of F/J Seat Vs Y Class Seat (Y = 100)

Thu Jul 21, 2011 10:11 am

If a single economy class seat on a widebody, long-haul trip costs a carrier 100, how much would a single business or first class seat typically cost them on the same trip given the following mark-ups:

- Increased floor area use;
- Higher depreciation expense of more costly seating/IFE equipement;
- Higher F/A-to-pax ratio for premium service product;
- Higher fuel burn due to i) heavier seats and ii) more F/A-per-pax ratio and iii) greater baggage allowance;
- Higher beverage/meal costs; and
- Other significant cost mark-ups.

How much would the total mark-up typically be if Y class is the datum 100? Would the % mark-up it be in line with the increased (full) ticket price for J/F class over Y class or not?

Faro

[Edited 2011-07-21 03:13:36]
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Kevin777
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RE: Cost Of F/J Seat Vs Y Class Seat (Y = 100)

Thu Jul 21, 2011 10:37 am

Interesting questions; I've often aksed myself the same ones...

I've often had SK's long haul a/c in mind on this subject, and from what I know from experience on SK, seating charts etc., I reckon that, for SK's Y versus J on their 330/340s:


- Increased floor area use: Factor 3,5-4
- Higher depreciation expense of more costly seating/IFE equipement: Don't think this that important after all in the major scheme of things; four Y seats probably don't cost much less than one J seat (factor around 1)
- Higher F/A-to-pax ratio for premium service product. Definitely - but still, per sq metre of cabin floor space, I don't think there's much difference, and this is what counts here (factor around 1)
- Higher fuel burn due to i) heavier seats and ii) more F/A-per-pax ratio and iii) greater baggage allowance; Yes - but again, per available sq metre of cabin I don't think it's higher; e.g. a business pax might sit in a heavier seat, require more F/A attention etc., but for each of these there would be four Y-pax; if they require 1/4 of the service versus a J-pax, then no difference (e.g. net also a factor of arond 1)
- Higher beverage/meal costs: I would not be surprised if J-meals and drinks were up to 10 times as expensive per pax than the same for Y (in SK's case, also because alcohol is not free in Y). But still, net it is only a factor 2,5-3, because there is only about 1 J seat per four Y seats.

So bottom-line, I'd say the Y => J factor for SK's long-haul is around 4. Looking at their fares, I think this is pretty well reflected. J is often around a factor four of Y, but for discounted Y tickets, it can be higher - but these would then not have the higher flexibility of a J fare (e.g.CPH-EWR in Y can often be found for less than DKK 4.000, and J at DKK 22.000; a factor 5,5; but the Y ticket here has no flexibility)

Best regards,

Kevin777  
"I was waiting for you at DFW, but you must have been in LUV" CPH-HAM-CPH CR9
 
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Faro
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RE: Cost Of F/J Seat Vs Y Class Seat (Y = 100)

Thu Jul 21, 2011 11:00 am

Quoting kevin777 (Reply 1):
So bottom-line, I'd say the Y => J factor for SK's long-haul is around 4. Looking at their fares, I think this is pretty well reflected. J is often around a factor four of Y, but for discounted Y tickets, it can be higher - but these would then not have the higher flexibility of a J fare (e.g.CPH-EWR in Y can often be found for less than DKK 4.000, and J at DKK 22.000; a factor 5,5; but the Y ticket here has no flexibility)

Thanx for the detailed feedback. Funny though how everywhere on a.net people say that J/F is where carriers make the money. I would have expected that the seat/surface area cost mark-up of a J/F class seat is a lower multiple than the ticket price mark-up...very interesting indeed...

Faro
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oneskyjet
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RE: Cost Of F/J Seat Vs Y Class Seat (Y = 100)

Thu Jul 21, 2011 12:08 pm

Unfortunately, there has never really been any linkage between cost and price in the airline industry. Seats a re priced based on opportunity. If an airline cant fill all of its economy seats, the 4:1 space ratio is moot.
 
Kevin777
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RE: Cost Of F/J Seat Vs Y Class Seat (Y = 100)

Thu Jul 21, 2011 1:03 pm

Quoting faro (Reply 2):
Funny though how everywhere on a.net people say that J/F is where carriers make the money

Well, it all depends - but looking at it in a long-term, more theoretical, economic equilibrium perspective, if it was the case that airlines always made more money in J than in Y per available sq metre of cabin floor (e.g. the fare multiple was always higher than the cost multiple), then we should see airlines taking out Y seats and installing more J untill we reached the equilibrium.

In practice though it is very much depending on the specific route, market, a/c available, competition etc., as oneskyjet also indicates. In some markets, surely, J is more profitable, in others probably not.

Take SK again: The last two winters they did CPH-DXB with a 343 (46J, 35Y+, 186Y IIRC, something like that) - not an ideal a/c for the route at all, but you have to do with what you have; you don't get a tailored new a/cx everytime you start a new route. Now, this was, for all practical purposes, a charter service more than a scheduled service. CPH-DXB in winter is 95 % leisure traffic or something like that, and the route is not longer than most pax will stick it out in Y and not pay Y+ or J. Result: An overbooked economy, and LOTS of free upgrades; I know form personal experience and experience from several friends who flew the route. In practice, this means that even though your published J fare might have been a factor 4 of Y (resembling cost differences) (it actually was), realized J fare has probably been closer to a factor 2, if that. Bottom-line, this meant that the DXB route made its money in the back of the cabin, not the front!

On the contrary, however, I think that a route like CPH-BKK served with the same 343 might make good money in J, and a little less per sq metre in Y, because of more business traffic and longer distance.

I think it is difficult to draw the general conclusion that money is always made in front of the cabin - it all depends. Now, where I do think you can draw a general consluion, is that money is made on pax travelling nonstop. Customers pay more for onestop service - regardless of class of travel. Then it might be of course, that J-pax tend to take nonstop routings more than Y-pax, and this increases the J-fare more than the cost increase versus Y. But saying that money is always made in front of the cabin, merely based on the premium product up there, I don't buy - it does not make economic sense.

Kevin777  
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frmrCapCadet
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RE: Cost Of F/J Seat Vs Y Class Seat (Y = 100)

Thu Jul 21, 2011 4:22 pm

Kevin - nice information. Perhaps you can correct my paranoid view of why Y is so uncomfortable. Even with my short body the 29-31 inch pitch just about kills me on a long trip. I long for the days when 35 inches was standard. Are they making it all so miserable in back to fill up the front or middle. I am perfectly comfortable at 35 inch pitch, but Y+ is much more expensive. I don't mind the 17.2 inch seats. Don't care about IFE, food and drink (so long as they have water), And I want the bathrooms to work, and generally be available.

More seriously this minimum comfort at a reasonable price has a great affect on my willingness to fly. Most of my friends of the same age feel the same. I am flying a lot less these days, and vacationing by car. I would happily pay about 15% morfe just for pitch. Obviously I am not in synch with the market. Any observations?
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hal9213
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RE: Cost Of F/J Seat Vs Y Class Seat (Y = 100)

Fri Jul 22, 2011 2:16 pm

Quoting frmrCapCadet (Reply 5):
More seriously this minimum comfort at a reasonable price has a great affect on my willingness to fly.

Try some other airlines then. 29-31 sounds like LCC. There are plenty of airlines with 33-34 inch.

As for the topic, on top of the onboard product, there is also costs for lounges, free airport transfers, dedicated counters, airport fees for fastlanes and priority bags, dedicated hotline etc. Its all small stuff, but sums up.
 
Viscount724
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RE: Cost Of F/J Seat Vs Y Class Seat (Y = 100)

Sun Jul 31, 2011 5:07 am

One factor I don't think anyone has mentioned is load factor. I've been on dozens of longhaul flights where Y class is full or close to it but first class is sometimes completely empty or may have just one or two passengers (and you never know whether they're employees flying free) in a cabin area that could accommodate 50 Y class seats and where those seats could have been sold.

Quoting hal9213 (Reply 6):
on top of the onboard product, there is also costs for lounges, free airport transfers, dedicated counters, airport fees for fastlanes and priority bags, dedicated hotline etc. Its all small stuff, but sums up.

For example, at ZRH and GVA, LX transports F class passengers to/from the aircraft,in a fleet of S Class Mercedes. Those aren't cheap.

Quoting frmrCapCadet (Reply 5):
Even with my short body the 29-31 inch pitch just about kills me on a long trip. I long for the days when 35 inches was standard.

On international routes in the days when IATA resolutions agreed by the member airlines and approved by governments covered such issues, the maximum seat pitch for Y class was 34 inches, not 35. On domestic routes airlines could do whatever they wanted, but carriers that operated both international and domestic routes using the same aircraft couldn't exceed 34 inches.

Many of the new lightweight Y class seats with much thinner backs have more effective legroom at 31 inch pitch than older seats did at 34 inches.
 
Horstroad
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RE: Cost Of F/J Seat Vs Y Class Seat (Y = 100)

Sun Jul 31, 2011 1:40 pm

i think you can not compare the costs of seats, as you can put more Y seats than F seats in a certain area.

so i think the comparison of the costs per floor area, let´s say a square meter or so, is better

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