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jnev3289
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Airlines Handling Fares During Natural Disasters

Wed Sep 06, 2017 4:11 pm

So I know a lot of people are #madonline about revenue management systems jacking up prices (often vilifying the airline) because inventory goes so quick and is generally bought very close to departure date when these things happen, but what does the RM Dept do in these situations? Do they let the systems do their worst or is there any fare relief?
 
flyguy89
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Re: Airlines Handling Fares During Natural Disasters

Wed Sep 06, 2017 5:14 pm

There is no good outcome here. People will either be mad that prices have gone up to account for scarcity, or they'll be mad if airlines override revenue management systems to keep prices reasonable but find that there are no available seats to be had.
 
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Super80Fan
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Re: Airlines Handling Fares During Natural Disasters

Wed Sep 06, 2017 5:21 pm

Yeah this is a totally no win situation for the airlines. They either jack prices up to keep up with basic supply & demand or they lower prices and no seats are available at all.
RIP McDonnell Douglas
RIP US Airways
 
BlatantEcho
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Re: Airlines Handling Fares During Natural Disasters

Wed Sep 06, 2017 6:16 pm

Why not raise prices and let the market decide if it wants to fly or drive?

What does a natural disaster have to do with airplane prices? The premise here is very confusing.
 
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jnev3289
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Re: Airlines Handling Fares During Natural Disasters

Wed Sep 06, 2017 6:20 pm

People are screaming price gouging blah blah blah... Just curious to know if any Revenue Management departments do anything different or special during things like this
 
Turnhouse1
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Re: Airlines Handling Fares During Natural Disasters

Wed Sep 06, 2017 6:39 pm

The best PR win is to find an underutilized 747 and send it in to do an evac flight, find a suitably photogenic family with a sick kid/pregnant mum and stick them in first/business class.

Flights paid for within the timescale of an accurate weather forecast are unlikely to be that cheap anyway.
 
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jaybird
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Re: Airlines Handling Fares During Natural Disasters

Wed Sep 06, 2017 7:08 pm

I don't understand the question either - airlines waive fees and let people rebook their flights over a span of dates .. they have to reroute flights, they have to cancel flights, they have to reposition staff, they rebook people .. they're not going to drop empty planes in and sell the seats for the lowest fare in the market. They don't jack-up prices - prices (on most airlines) are based on how close you are to departure and how many seats are left on the flight. Natural disasters are a no-win situation for everyone - airlines included.
 
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jnev3289
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Re: Airlines Handling Fares During Natural Disasters

Wed Sep 06, 2017 7:17 pm

Just saw Jetblue capped nonstop fares at $99 for people leaving FL before Sunday
 
Varsity1
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Re: Airlines Handling Fares During Natural Disasters

Wed Sep 06, 2017 8:48 pm

Unfortunately people's memories are short.

Goodwill buys 15 seconds of fame, PR fiascos buy 15 years.
"PPRuNe will no longer allow discussions regarding Etihad Airlines, its employees, executives, agents, or other representatives. Such threads will be deleted." - ME3 thug airlines suing anyone who brings negative information public..
 
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gatibosgru
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Re: Airlines Handling Fares During Natural Disasters

Wed Sep 06, 2017 9:31 pm

jnev3289 wrote:
Just saw Jetblue capped nonstop fares at $99 for people leaving FL before Sunday


Just checked FLL-BOS on B6 for Friday, to try to get my parents out of there, and they're all sold out.
@DadCelo
 
alasizon
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Re: Airlines Handling Fares During Natural Disasters

Wed Sep 06, 2017 9:52 pm

The real reason at this point is because the only thing left is Full Fare Y and J for most flights. Its probably best for airlines to just not intervene, otherwise you get those passengers that say "well why couldn't you just sell the seats at that price all the time" if they cap/lower it.
Manager on Duty & Tower Planner
 
coolian2
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Re: Airlines Handling Fares During Natural Disasters

Wed Sep 06, 2017 9:56 pm

BlatantEcho wrote:
Why not raise prices and let the market decide if it wants to fly or drive?

What does a natural disaster have to do with airplane prices? The premise here is very confusing.

This is what's wrong with the world.
Q300/ATR72-600/737-200/-300/-400/-700/-800/A320/767-200/-300/757-200/777-300ER/
747-200/-300/-400/ER/A340-300/A380-800/MD-83/-88/CRJ-700/-900
 
32andBelow
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Re: Airlines Handling Fares During Natural Disasters

Wed Sep 06, 2017 9:57 pm

coolian2 wrote:
BlatantEcho wrote:
Why not raise prices and let the market decide if it wants to fly or drive?

What does a natural disaster have to do with airplane prices? The premise here is very confusing.

This is what's wrong with the world.

No all you social justice warriors need to understand that if you don't raise prices there will be no seats, so it doesn't matter at that point. Also airlines need to maintain some inventory for the irreg ops pax that they rebook free of charge.
 
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Super80Fan
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Re: Airlines Handling Fares During Natural Disasters

Wed Sep 06, 2017 10:29 pm

You guys should be more angry at the gasoline companies for charging outrageous prices for gas, there is NO reason for gas to be so high when there are plenty other refineries running to full capacity and the reserves.
RIP McDonnell Douglas
RIP US Airways
 
axiom
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Re: Airlines Handling Fares During Natural Disasters

Wed Sep 06, 2017 10:55 pm

coolian2 wrote:
BlatantEcho wrote:
Why not raise prices and let the market decide if it wants to fly or drive?

What does a natural disaster have to do with airplane prices? The premise here is very confusing.

This is what's wrong with the world.


I agree completely. You can hide behind the pseudo-science of economics or algorithms all day, but the outcome here is immoral. Airlines are protifting from disaster.
 
32andBelow
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Re: Airlines Handling Fares During Natural Disasters

Wed Sep 06, 2017 11:04 pm

axiom wrote:
coolian2 wrote:
BlatantEcho wrote:
Why not raise prices and let the market decide if it wants to fly or drive?

What does a natural disaster have to do with airplane prices? The premise here is very confusing.

This is what's wrong with the world.


I agree completely. You can hide behind the pseudo-science of economics or algorithms all day, but the outcome here is immoral. Airlines are protifting from disaster.

So it creates an opportunity for a different airline to charge a lower price. But when there is a shortage there is not much you can do to keep airline tickets available.
 
flyguy89
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Re: Airlines Handling Fares During Natural Disasters

Wed Sep 06, 2017 11:11 pm

axiom wrote:
coolian2 wrote:
BlatantEcho wrote:
Why not raise prices and let the market decide if it wants to fly or drive?

What does a natural disaster have to do with airplane prices? The premise here is very confusing.

This is what's wrong with the world.


I agree completely. You can hide behind the pseudo-science of economics or algorithms all day, but the outcome here is immoral. Airlines are protifting from disaster.

What do you want then? Labeling something "pseudo-science" doesn't change the reality that there are only so many seats available and that there are associated costs/risks born by the airlines.

You have a total of three options:
1) Ban all commercial operations and have the government air lift people out
2) Artificially keep airfares from floating the market, which will mean all available space sells out and most people don't get a seat
3) Let airfares float the market, most people don't get a seat, but at least there will be some space available to those who really want/need it
 
axiom
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Re: Airlines Handling Fares During Natural Disasters

Wed Sep 06, 2017 11:13 pm

32andBelow wrote:
axiom wrote:
coolian2 wrote:
This is what's wrong with the world.


I agree completely. You can hide behind the pseudo-science of economics or algorithms all day, but the outcome here is immoral. Airlines are protifting from disaster.

So it creates an opportunity for a different airline to charge a lower price. But when there is a shortage there is not much you can do to keep airline tickets available.


No, scarcity is inevitable. But competition is imperfect in this industry, and profit through exploitation is wholly avoidable. In fact, price gouging during disaster is illegal in Florida. Airline tickets are not subject to such law, but it's hardly a stretch to argue that it is ethically questionable for an airline to profit from disaster-induced scarcity. I hear reports that B6 froze prices at $99 for remaining inventory before selling out.
 
32andBelow
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Re: Airlines Handling Fares During Natural Disasters

Wed Sep 06, 2017 11:16 pm

axiom wrote:
32andBelow wrote:
axiom wrote:

I agree completely. You can hide behind the pseudo-science of economics or algorithms all day, but the outcome here is immoral. Airlines are protifting from disaster.

So it creates an opportunity for a different airline to charge a lower price. But when there is a shortage there is not much you can do to keep airline tickets available.


No, scarcity is inevitable. But competition is imperfect in this industry, and profit through exploitation is wholly avoidable. In fact, price gouging during disaster is illegal in Florida. Airline tickets are not subject to such law, but it's hardly a stretch to argue that it is ethically questionable for an airline to profit from disaster-induced scarcity. I hear reports that B6 froze prices at $99 for remaining inventory before selling out.

And what about people that buy up those tickets as insurance and don't wind up using them. Is that ethical? While someone who has a family emergency out of state or country who is willing to pay to fly can't buy a ticket?
 
axiom
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Re: Airlines Handling Fares During Natural Disasters

Wed Sep 06, 2017 11:19 pm

flyguy89 wrote:
axiom wrote:
coolian2 wrote:
This is what's wrong with the world.


I agree completely. You can hide behind the pseudo-science of economics or algorithms all day, but the outcome here is immoral. Airlines are protifting from disaster.

What do you want then? Labeling something "pseudo-science" doesn't change the reality that there are only so many seats available and that there are associated costs/risks born by the airlines.

You have a total of three options:
1) Ban all commercial operations and have the government air lift people out
2) Artificially keep airfares from floating the market, which will mean all available space sells out and most people don't get a seat
3) Let airfares float the market, most people don't get a seat, but at least there will be some space available to those who really want/need it



Yes, point 2. You prohibit price gouging. It is illegal in almost every case in Florida after a state of emergency has been declared. It's really quite simple.

As for your third point, need I point out how heinous that logic is, as if entitlement or need is a pure function of wealth? Only someone sheltered by privilege could make such an argument with a straight face.

I ammapragmatist. Seats are limited. There are alternatives to flying out of state. I believe it is the responsbility of the state to help facilitate opportunities for everyone, regardless of income, to find security and shelter. I also believe it is the responsibility of the state to prevent unreasonable profiteering during disaster.
 
axiom
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Re: Airlines Handling Fares During Natural Disasters

Wed Sep 06, 2017 11:21 pm

32andBelow wrote:
axiom wrote:
32andBelow wrote:
So it creates an opportunity for a different airline to charge a lower price. But when there is a shortage there is not much you can do to keep airline tickets available.


No, scarcity is inevitable. But competition is imperfect in this industry, and profit through exploitation is wholly avoidable. In fact, price gouging during disaster is illegal in Florida. Airline tickets are not subject to such law, but it's hardly a stretch to argue that it is ethically questionable for an airline to profit from disaster-induced scarcity. I hear reports that B6 froze prices at $99 for remaining inventory before selling out.

And what about people that buy up those tickets as insurance and don't wind up using them. Is that ethical? While someone who has a family emergency out of state or country who is willing to pay to fly can't buy a ticket?


You are engaging in straw man hypotheticals. The question is not whether or not there is scarcity. The question is whether or not it is ethical or appropriate for a business to profit from this kind of scarcity.
 
32andBelow
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Re: Airlines Handling Fares During Natural Disasters

Wed Sep 06, 2017 11:24 pm

axiom wrote:
32andBelow wrote:
axiom wrote:

No, scarcity is inevitable. But competition is imperfect in this industry, and profit through exploitation is wholly avoidable. In fact, price gouging during disaster is illegal in Florida. Airline tickets are not subject to such law, but it's hardly a stretch to argue that it is ethically questionable for an airline to profit from disaster-induced scarcity. I hear reports that B6 froze prices at $99 for remaining inventory before selling out.

And what about people that buy up those tickets as insurance and don't wind up using them. Is that ethical? While someone who has a family emergency out of state or country who is willing to pay to fly can't buy a ticket?


You are engaging in straw man hypotheticals. The question is not whether or not there is scarcity. The question is whether or not it is ethical or appropriate for a business to profit from this kind of scarcity.

all the tickets getting sold out is not hypothetical. Maybe the airline should raise the fares and donate a portion.
 
flyguy89
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Re: Airlines Handling Fares During Natural Disasters

Wed Sep 06, 2017 11:39 pm

axiom wrote:
flyguy89 wrote:
axiom wrote:

I agree completely. You can hide behind the pseudo-science of economics or algorithms all day, but the outcome here is immoral. Airlines are protifting from disaster.

What do you want then? Labeling something "pseudo-science" doesn't change the reality that there are only so many seats available and that there are associated costs/risks born by the airlines.

You have a total of three options:
1) Ban all commercial operations and have the government air lift people out
2) Artificially keep airfares from floating the market, which will mean all available space sells out and most people don't get a seat
3) Let airfares float the market, most people don't get a seat, but at least there will be some space available to those who really want/need it



Yes, point 2. You prohibit price gouging. It is illegal in almost every case in Florida after a state of emergency has been declared. It's really quite simple.

These weren't meant to be points. They're either/or options.

axiom wrote:
As for your third point, need I point out how heinous that logic is, as if entitlement or need is a pure function of wealth? Only someone sheltered by privilege could make such an argument with a straight face.

You can call it whatever you'd like, but the fact is that your proposal isn't any more helpful and is arguably more harmful since you're all but guaranteeing quick depletion of supply with no widespread benefit.
 
luv2cattlecall
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Re: Airlines Handling Fares During Natural Disasters

Thu Sep 07, 2017 3:20 am

32andBelow wrote:
axiom wrote:
32andBelow wrote:
And what about people that buy up those tickets as insurance and don't wind up using them. Is that ethical? While someone who has a family emergency out of state or country who is willing to pay to fly can't buy a ticket?


You are engaging in straw man hypotheticals. The question is not whether or not there is scarcity. The question is whether or not it is ethical or appropriate for a business to profit from this kind of scarcity.

all the tickets getting sold out is not hypothetical. Maybe the airline should raise the fares and donate a portion.


That seems like a good solution..as long as the donation was a large portion of the average price/disaster price spread.


United lost nearly half a billion with Harvey.. Not sure where the accusations of airlines profiting from disaster are coming from. Public pressure to sell all seats at a 21 day advance off-season price won't really motivate anyone to add tons of extra flights and pay overtime/MX overtime as fleet utilization gets a sudden bump. However, if for example WN got $800/seat out of Florida, they could afford to cancel some of the 30 or whatever DAL-HOU flights, combine pax, and compensate people to voluntarily cancel their plans (or take a car/bus/whatever).
 
32andBelow
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Re: Airlines Handling Fares During Natural Disasters

Thu Sep 07, 2017 6:48 am

luv2cattlecall wrote:
32andBelow wrote:
axiom wrote:

You are engaging in straw man hypotheticals. The question is not whether or not there is scarcity. The question is whether or not it is ethical or appropriate for a business to profit from this kind of scarcity.

all the tickets getting sold out is not hypothetical. Maybe the airline should raise the fares and donate a portion.


That seems like a good solution..as long as the donation was a large portion of the average price/disaster price spread.


United lost nearly half a billion with Harvey.. Not sure where the accusations of airlines profiting from disaster are coming from. Public pressure to sell all seats at a 21 day advance off-season price won't really motivate anyone to add tons of extra flights and pay overtime/MX overtime as fleet utilization gets a sudden bump. However, if for example WN got $800/seat out of Florida, they could afford to cancel some of the 30 or whatever DAL-HOU flights, combine pax, and compensate people to voluntarily cancel their plans (or take a car/bus/whatever).

Lost revenue in aviation is overstated. You may lose 500 million in Rev while saving 450 million in operating cost.
 
axiom
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Re: Airlines Handling Fares During Natural Disasters

Thu Sep 07, 2017 6:59 am

32andBelow wrote:
axiom wrote:
32andBelow wrote:
And what about people that buy up those tickets as insurance and don't wind up using them. Is that ethical? While someone who has a family emergency out of state or country who is willing to pay to fly can't buy a ticket?


You are engaging in straw man hypotheticals. The question is not whether or not there is scarcity. The question is whether or not it is ethical or appropriate for a business to profit from this kind of scarcity.

all the tickets getting sold out is not hypothetical. Maybe the airline should raise the fares and donate a portion.


You misunderstood me. I didn't say that selling out was hypothetical, I said that your scenario was. Positioning one customer's hypothetical utility for a ticket against another's and then reconciling it through a pricing mechanism is the problem. This is the ideological crux of microeconomic theory hey becomes unethical. That is my point. Price is not a fair or just universal arbiter of value. That an airline would exploit disaster through the price mechanism is unethical.

There is no question the seats sell out. For the 8th time, the argument is that they should not be a profit center. Large multi-billion dollar corporations have insurance policies to offset the cost of disasters. Individual consumers lack these protections. As often is the case with free market ideologues, the argument seems to be here that everyone is a free agent with equal market power and position. That simply isn't true. That this has to be stated repeatedly and can only be resolved by one side repeating the same old, same old about pricing mechanism argument says a lot about the state of market fundamentalism in the world.

Next time we're the lone survivors after a hurricane, would you like me to charge you $1,000 for a sip from my water bottle? Because I possess the water bottle and have the right to charge you, it must be just, no?
 
Samrnpage
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Re: Airlines Handling Fares During Natural Disasters

Thu Sep 07, 2017 7:20 am

I have to say I understand why, but humanities first act during troubled times like this is "how can we make more money". The decent thing to do is sell tickets to break even on the flight, not to make profit but to pay for the costs of the flight and that's it. That is the RIGHT thing to do and to argue otherwise is outrageous.
 
flyguy89
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Re: Airlines Handling Fares During Natural Disasters

Thu Sep 07, 2017 8:46 am

axiom wrote:
32andBelow wrote:
axiom wrote:

You are engaging in straw man hypotheticals. The question is not whether or not there is scarcity. The question is whether or not it is ethical or appropriate for a business to profit from this kind of scarcity.

all the tickets getting sold out is not hypothetical. Maybe the airline should raise the fares and donate a portion.


You misunderstood me. I didn't say that selling out was hypothetical, I said that your scenario was. Positioning one customer's hypothetical utility for a ticket against another's and then reconciling it through a pricing mechanism is the problem. This is the ideological crux of microeconomic theory hey becomes unethical. That is my point. Price is not a fair or just universal arbiter of value. That an airline would exploit disaster through the price mechanism is unethical.

I guess I'm failing to see how forcefully suppressing the pricing mechanism and essentially using a first-come-first-serve model that encourages hoarding, wastes scarce supply and locks out anyone not lucky enough to get online and whip out their credit cards quick enough is any more ethical. It might feel "icky" that the airline is making a profit, but like I mentioned up-thread unless the government is going to come in and start airlifting people out, profit is the most ethical and efficient way of maintaining and encouraging additional supply. You have to ask yourself whether or not its more ethical to maintain supply at any price versus no supply at any price.

axiom wrote:
There is no question the seats sell out. For the 8th time, the argument is that they should not be a profit center.

As much as you may hate the profit, the reality is that airfares/prices are critical information signals that let suppliers know what/where supply is scarce and, more importantly, encourages more supply- case in point, all the additional sections airlines have added to Florida. The best, most efficient and ethical solution to keeping supply available and getting more seats in the pipeline is to let airfares float the market and allow these crucial information signals to get out...that or charity (the purview of governments and aid organizations).

axiom wrote:
Next time we're the lone survivors after a hurricane, would you like me to charge you $1,000 for a sip from my water bottle? Because I possess the water bottle and have the right to charge you, it must be just, no?

Versus? I'd much prefer having the available option of paying $1,000 for sip instead of NO water being available and zero options for a sip.
 
luv2cattlecall
Posts: 806
Joined: Fri Sep 28, 2007 6:25 am

Re: Airlines Handling Fares During Natural Disasters

Thu Sep 07, 2017 7:06 pm

32andBelow wrote:
luv2cattlecall wrote:
32andBelow wrote:
all the tickets getting sold out is not hypothetical. Maybe the airline should raise the fares and donate a portion.


That seems like a good solution..as long as the donation was a large portion of the average price/disaster price spread.


United lost nearly half a billion with Harvey.. Not sure where the accusations of airlines profiting from disaster are coming from. Public pressure to sell all seats at a 21 day advance off-season price won't really motivate anyone to add tons of extra flights and pay overtime/MX overtime as fleet utilization gets a sudden bump. However, if for example WN got $800/seat out of Florida, they could afford to cancel some of the 30 or whatever DAL-HOU flights, combine pax, and compensate people to voluntarily cancel their plans (or take a car/bus/whatever).

Lost revenue in aviation is overstated. You may lose 500 million in Rev while saving 450 million in operating cost.


I thought they were paying the employees who were scheduled? If so, the only savings are fuel and MX, but then add the expenses for fixing stuff and repositioning everything.
 
BlatantEcho
Posts: 2125
Joined: Wed Sep 27, 2000 10:11 am

Re: Airlines Handling Fares During Natural Disasters

Thu Sep 07, 2017 7:34 pm

Samrnpage wrote:
That is the RIGHT thing to do and to argue otherwise is outrageous.


It might be outrageous to YOU, but it's very logical and reasonable to a lot of citizens actually.

Where is the line in your mind?
- Hurricane, ok: how about break even pricing (whatever the heck that means)

- car crash: ok, let's do breakeven plus 25%?

- flood: maybe airlines do breakeven plus 15%?

- your cat is sick: maybe below break even?

- terroism: how about breakeven plus 40%??


--
You can quickly see why the world doesn't work like this.
And you should be able to see how illogical it is to parrot.

YOUR beliefs and morals have no bearing on what I will pay for an airplane seat.

And yoir delicate moral compass has no basis in the business world or reality. Please stop complaining. If you want to run an airline as a charity, start one up!

I'll fly for free at your expense, sounds nice!
 
32andBelow
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Re: Airlines Handling Fares During Natural Disasters

Thu Sep 07, 2017 9:17 pm

I don't think people understand how airline pricing even works. Last seat availability day of is always hundreds % more than 21 day advance empty flight. It's just more people are looking during the disaster. This pricing model is how you are able to buy a 125 dollar one way from LA to NYC 2 months out.
 
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N644US
Posts: 80
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Re: Airlines Handling Fares During Natural Disasters

Thu Sep 07, 2017 11:22 pm

flyguy89 wrote:
axiom wrote:
32andBelow wrote:
all the tickets getting sold out is not hypothetical. Maybe the airline should raise the fares and donate a portion.


You misunderstood me. I didn't say that selling out was hypothetical, I said that your scenario was. Positioning one customer's hypothetical utility for a ticket against another's and then reconciling it through a pricing mechanism is the problem. This is the ideological crux of microeconomic theory hey becomes unethical. That is my point. Price is not a fair or just universal arbiter of value. That an airline would exploit disaster through the price mechanism is unethical.

I guess I'm failing to see how forcefully suppressing the pricing mechanism and essentially using a first-come-first-serve model that encourages hoarding, wastes scarce supply and locks out anyone not lucky enough to get online and whip out their credit cards quick enough is any more ethical. It might feel "icky" that the airline is making a profit, but like I mentioned up-thread unless the government is going to come in and start airlifting people out, profit is the most ethical and efficient way of maintaining and encouraging additional supply. You have to ask yourself whether or not its more ethical to maintain supply at any price versus no supply at any price.

axiom wrote:
There is no question the seats sell out. For the 8th time, the argument is that they should not be a profit center.

As much as you may hate the profit, the reality is that airfares/prices are critical information signals that let suppliers know what/where supply is scarce and, more importantly, encourages more supply- case in point, all the additional sections airlines have added to Florida. The best, most efficient and ethical solution to keeping supply available and getting more seats in the pipeline is to let airfares float the market and allow these crucial information signals to get out...that or charity (the purview of governments and aid organizations).

axiom wrote:
Next time we're the lone survivors after a hurricane, would you like me to charge you $1,000 for a sip from my water bottle? Because I possess the water bottle and have the right to charge you, it must be just, no?

Versus? I'd much prefer having the available option of paying $1,000 for sip instead of NO water being available and zero options for a sip.


But, of course, the question is: do you have $1000 for a sip, or do you just want the option around?

Just having the option to fly would mean that you favour potentially stranding people who couldn't afford $1000 for a ticket, yet could afford something reasonable (other airlines like DL and UA have price caps around $400, some of which still have seats). And assuming that you have $1000, advocating that you want $1000 sips solely because you can have some at the expense of others is both selfish and immoral; assuming that you have the money and are adamant about flying, you could get a seat either way ($99 or $1000).
Aviation: the field where (almost) anything can be solved using math and science.
 
flyguy89
Posts: 2567
Joined: Tue Feb 24, 2009 6:43 pm

Re: Airlines Handling Fares During Natural Disasters

Thu Sep 07, 2017 11:47 pm

N644US wrote:
flyguy89 wrote:
axiom wrote:

You misunderstood me. I didn't say that selling out was hypothetical, I said that your scenario was. Positioning one customer's hypothetical utility for a ticket against another's and then reconciling it through a pricing mechanism is the problem. This is the ideological crux of microeconomic theory hey becomes unethical. That is my point. Price is not a fair or just universal arbiter of value. That an airline would exploit disaster through the price mechanism is unethical.

I guess I'm failing to see how forcefully suppressing the pricing mechanism and essentially using a first-come-first-serve model that encourages hoarding, wastes scarce supply and locks out anyone not lucky enough to get online and whip out their credit cards quick enough is any more ethical. It might feel "icky" that the airline is making a profit, but like I mentioned up-thread unless the government is going to come in and start airlifting people out, profit is the most ethical and efficient way of maintaining and encouraging additional supply. You have to ask yourself whether or not its more ethical to maintain supply at any price versus no supply at any price.

axiom wrote:
There is no question the seats sell out. For the 8th time, the argument is that they should not be a profit center.

As much as you may hate the profit, the reality is that airfares/prices are critical information signals that let suppliers know what/where supply is scarce and, more importantly, encourages more supply- case in point, all the additional sections airlines have added to Florida. The best, most efficient and ethical solution to keeping supply available and getting more seats in the pipeline is to let airfares float the market and allow these crucial information signals to get out...that or charity (the purview of governments and aid organizations).

axiom wrote:
Next time we're the lone survivors after a hurricane, would you like me to charge you $1,000 for a sip from my water bottle? Because I possess the water bottle and have the right to charge you, it must be just, no?

Versus? I'd much prefer having the available option of paying $1,000 for sip instead of NO water being available and zero options for a sip.


But, of course, the question is: do you have $1000 for a sip, or do you just want the option around?

Just having the option to fly would mean that you favour potentially stranding people who couldn't afford $1000 for a ticket, yet could afford something reasonable (other airlines like DL and UA have price caps around $400, some of which still have seats).

The reality is that those people are already going to be stranded if prices are kept artificially suppressed and supply is allowed to quickly deplete. Again, you have to decide whether it's better to have supply at any price, or no supply at any price. I think the former is more humane.

N644US wrote:
And assuming that you have $1000, advocating that you want $1000 sips solely because you can have some at the expense of others is both selfish and immoral; assuming that you have the money and are adamant about flying, you could get a seat either way ($99 or $1000).

And I think it's selfish and immoral to advocate for a system that encourages hording and artificially lengthens the time that supply is scarce. Even if I couldn't afford $1,000 for a sip, it still benefits me to allow prices to float in such as way as it sends out the strongest signal possible to get more of that scarce supply to where I am.
 
mcogator
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Re: Airlines Handling Fares During Natural Disasters

Thu Sep 07, 2017 11:56 pm

Quite a few seats on MIA/FLL/MCO-LAX that are selling for $160-$250 RT. I just bought a full Y fare for LAX-MCO RT Monday-Wednesday for $220. I need to help cleanup at my parents and the rental properties.
“Traveling – it leaves you speechless, then turns you into a storyteller.” – Ibn Battuta
 
jeffrey1970
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Re: Airlines Handling Fares During Natural Disasters

Fri Sep 08, 2017 12:01 am

In my opinion it is not about what will win you good favor with the public. It is about doing the right thing in disasters like this. I think the right thing to do is to increase capacity when you can, and cap fares at a very good price. If I ran an airline I would rather take a loss knowing we helped save people's lives.
God bless through Jesus, Jeff
 
whatusaid
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Re: Airlines Handling Fares During Natural Disasters

Fri Sep 08, 2017 3:34 am

My flight out of RSW was cancelled for Saturday by AA. Those $99 airfares are a PR joke - sure they show avails for Sunday, but that's peak Irma time. I was able to get a oneway from TPA to DFW for Friday for $700 with no credit for my cancelled RSW-DFW. That's the reality of how AA is acting outside their PR stunting.
 
gtargui
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Re: Airlines Handling Fares During Natural Disasters

Fri Sep 08, 2017 3:46 am

Varsity1 wrote:
Unfortunately people's memories are short.

Goodwill buys 15 seconds of fame, PR fiascos buy 15 years.


Same sort of thing with reviews and complaints

Someone is more likely to leave a bad review or complain if something has gone wrong than leave a good review or praise the service recieved
 
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RWA380
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Re: Airlines Handling Fares During Natural Disasters

Fri Sep 08, 2017 5:05 am

Interesting comments, my perspective is thus, profiting on peoples misfortune should be criminal. The people who know how any commercial flight sells out, also knows as seats are bought up, your lowest fare inventories sell out. It's no secret that often times the highest coach fare can be less than $200 different from discounted first class tariffs.

What B6 has done is exactly what should happen. Give everyone a chance to get a seat, when they are sold out, they are sold out. If only those with money or great credit limits can get out, then you are saying only the privileged deserve their lives saved vs those of more modest means, which most people will agree is selfish thinking & anyone knows it is not the right thing.
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77H
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Re: Airlines Handling Fares During Natural Disasters

Fri Sep 08, 2017 5:47 am

RWA380 wrote:
Interesting comments, my perspective is thus, profiting on peoples misfortune should be criminal. The people who know how any commercial flight sells out, also knows as seats are bought up, your lowest fare inventories sell out. It's no secret that often times the highest coach fare can be less than $200 different from discounted first class tariffs.

What B6 has done is exactly what should happen. Give everyone a chance to get a seat, when they are sold out, they are sold out. If only those with money or great credit limits can get out, then you are saying only the privileged deserve their lives saved vs those of more modest means, which most people will agree is selfish thinking & anyone knows it is not the right thing.


Do you truly think that is what is occuring or do you see it as a simple case of supply and demand working at an accelerated rate?
Artificially fixing pricings, for any commodity in a time of crisis leads to a run on that specific commodity. There were plenty of stories out of Houston wherein people were pumping gas into big holding tanks and people at the grocery store with 40 cases of bottle water. Once the supply is gone, nothing new is coming in, leaving the rest of the population without those desperately needed commodities. Airline seats are much the same. If prices remain fixed, you have a run seats and the first few thousand people to log in get all the seats.

Imagine if you were on the road, at work, etc, and by the time you get in front of a computer or could access your phone all the seats were completely sold out. People logging in looking for seats after all the flights are booked up would simply begin complaining about how the airlines weren't helping to get people out, etc etc. Its a true damned if you do, damned if you don't scenario.

Letting the airline's inventory and revenue management system run as per normal allows individuals to decide whether or not it is financially worth it to fly vs take another form of transportation out of harms way. All that being said, if an airline were to artificially jack up prices knowing there was going to be high demand I think that should be criminal.

And for those suggesting the airlines simply operate a under utilized WB aircraft into MIA or FLL we must consider cost to the airline. If airline X runs a 777 down to FLL or MIA the inbound flight would almost certainly be empty. Meaning that airline X bears 100% of the cost to operate that flight. Said another way, operates that segment at a complete loss.
Now the airline has some choices to make. Does it charge double for the FLL/MIA outbound leg in an effort to recoup its losses on the inbound? Does it take the loss and chalk it up to a goodwill PR story that will likely be forgotten in two weeks time by the majority of the American people? Does the airline fix prices causing a further run on that inventory. There are more than 10 million people in the path of this hurricane. The US3 for example could devote their entire fleets to evacuating South Floridians and you would still be several million seats short of getting every Floridian out. The US3 combined have 2,552 mainline aircraft in active service (according to wikipedia). For the sake of quick math, lets assume the average number of seats of the combined fleet is 170 seats. That is only 433,840 available seats. If the US3 were able to operate each of the 2552 aircraft on 3 round trips, again, assuming average seat count of 170, thats only 1.3M available seats. The MIA-FLL Metro area alone has 5M residents.

If you ask me, there should be some sort of Natural Disaster Airlift Program put in place by the Government (similar to the Civil Air Reserve) wherein the Government calls on the airlines to operate government subsidized charters to airlift people out of areas impacted or soon to be impacted by large scale natural disasters to assist in evacuation efforts. In my opinion, it is the government's responsibility to look after it's peoples welfare, not corporations, be it airline or otherwise.

77H
 
axiom
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Re: Airlines Handling Fares During Natural Disasters

Fri Sep 08, 2017 8:12 am

Can't believe someone is arguing that price fixing for essential services induces horsing when a single family holds more warpath than the bottom 40% of US. The naivety and ideological fetishism in the face of loss of life is outrageous.

How about a different paradigm, one through which basic needs in a time of disaster and crisis are met through other forms of organization not centered on speculative grounds or profiteering. Radical thought, radical thought.
 
c933103
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Re: Airlines Handling Fares During Natural Disasters

Fri Sep 08, 2017 8:29 am

While in regular situation it would be a effective way for market to raise price in order to lower the demand to match supply, that isn't a effective situation in this case as the demand isn't nearly as much elastic. Especially for those who are on islands, they don't really have much alternative to buying a ticket no matter the cost.

Of course, numerous people would still buy those tickets if the revenue management system is followed and the flight is priced at US$5K each, but then another way to look at it would mean the airlines is capitalizing on the existence of the natural disaster. While there are nothing intristically wrong about capitaizing on natural disaster, it would cause bad public images.

Also, allowing price to freely goes up due to lack of available seats instead of capping the price at certain level might result in airlines does not have as large incentive to upgauge equipment on the grounf of revenue per customer and revenue per flight

77H wrote:
If you ask me, there should be some sort of Natural Disaster Airlift Program put in place by the Government (similar to the Civil Air Reserve) wherein the Government calls on the airlines to operate government subsidized charters to airlift people out of areas impacted or soon to be impacted by large scale natural disasters to assist in evacuation efforts. In my opinion, it is the government's responsibility to look after it's peoples welfare, not corporations, be it airline or otherwise.

Previously I have saw ROC Taiwan military used their C130 to help transport people to and from remote islands before and after typhoon hit. Can US military do something similar?
When no other countries around the world is going to militarily stop China and its subordinate fom abusing its citizens within its national boundary, it is unreasonable to expect those abuse can be countered with purely peaceful means.
 
BlatantEcho
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Re: Airlines Handling Fares During Natural Disasters

Fri Sep 08, 2017 12:15 pm

Modern society LOVES to tell other people what to do.
It's one of the highest forms of idiocy on display each day.

If you guys want to run charity airline flights for people, start an airline!
Donate your life savings to subsidize ticket prices or something!
Donate all your airmiles to charity today!
Charter a plane to make 5 runs down to Florida each day for the next week!

Oh, wait, yeah, none of you are doing that.
You'll argue on the internet telling someone ELSE what to do....
But, you can sit at home and act all self-righteous when no one does what you say....

--
This thread is built on some fallacy that a ticket price of '$200' is 'fair and reasonable'.
And there is a magic 'fairness princess' that knows that.
And of course, if that seat is '$400' instead of $200... now no one can afford to save themselves! #scaryairlinepricing

If you're going to live in a state that gives you a 5 day warning before a natural disaster happens.
And you are price sensitive enough to not save your own life for a thousand dollars....
Life is a LOT harder than choices like that one. Honestly.

So:
Costco should sell bottled water at 'breakeven' pricing too anytime the weather is above 80F - that saves lives.
Electricity should be free when it rains, because, well, that would be nice.
Everyone should get a free lollipop too, to ride out any inconvenience in comfort.

What you all forget and just simply don't grasp:

THE MORE AN AIRLINE CHARGES FOR A SEAT, THE MORE SEATS THEY WILL PROVIDE!
Lower prices would provide LESS seats.
 
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jnev3289
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Re: Airlines Handling Fares During Natural Disasters

Fri Sep 08, 2017 12:28 pm

Great economic debates going on, but does anyone work in RM or know anyone who does?
 
CriticalPoint
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Re: Airlines Handling Fares During Natural Disasters

Fri Sep 08, 2017 3:34 pm

jeffrey1970 wrote:
In my opinion it is not about what will win you good favor with the public. It is about doing the right thing in disasters like this. I think the right thing to do is to increase capacity when you can, and cap fares at a very good price. If I ran an airline I would rather take a loss knowing we helped save people's lives.


One point I don't see being made is how do you prevent people from flying who are going on vacation? My house is high and dry so lets go to PHX for a couple days just to stay out of the rain. I can argue their lives aren't being saved so why should they be able to buy a cheap ticket at the airlines expense just to go get some sun?

Now if you want to cap a fare and run rescue flights for people that are directly in harms way then yeah I support that. Unfortunately how do you prove that you HAVE to get out.

Being able to hop on an airplane and leave IS NOT a right it is a privilege. There are 1,000 other ways to evacuate.
 
DfwRevolution
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Re: Airlines Handling Fares During Natural Disasters

Fri Sep 08, 2017 3:51 pm

77H wrote:
Artificially fixing pricings, for any commodity in a time of crisis leads to a run on that specific commodity.


:checkmark:

That's a Category 5 truth bomb.

c933103 wrote:
Previously I have saw ROC Taiwan military used their C130 to help transport people to and from remote islands before and after typhoon hit. Can US military do something similar?


1. There are federal laws that limit deployment of the U.S. military on U.S. soil (Posse Comitatus Act). This was famously cited in 2005 as a reason why the Bush administration could not deploy the U.S. military to perform disaster relief after Katrina. The law was amended in 2007 to permit more latitude for disaster relief. I will disclaim that I am NOT a lawyer, but I don't think the present laws would allow the U.S. military to facilitate an evacuation before a natural disaster.

2.Even if they could, I would think twice about boarding thousands of people onto military transports. Generally speaking, military aviation has a significantly higher accident rate than commercial aviation. Military service is dangerous even during peacetime operations.
I have a three post per topic limit. You're welcome to have the last word.
 
mcogator
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Re: Airlines Handling Fares During Natural Disasters

Fri Sep 08, 2017 3:54 pm

whatusaid wrote:
My flight out of RSW was cancelled for Saturday by AA. Those $99 airfares are a PR joke - sure they show avails for Sunday, but that's peak Irma time. I was able to get a oneway from TPA to DFW for Friday for $700 with no credit for my cancelled RSW-DFW. That's the reality of how AA is acting outside their PR stunting.

Not true at all. There were plenty of flights available as of yesterday afternoon for those prices out of Florida for flights today. They were to LAX, but they were available.
“Traveling – it leaves you speechless, then turns you into a storyteller.” – Ibn Battuta
 
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CobraKai
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Re: Airlines Handling Fares During Natural Disasters

Fri Sep 08, 2017 4:14 pm

jnev3289 wrote:
Great economic debates going on, but does anyone work in RM or know anyone who does?



I worked in RM for a years until earlier this year - what's your question?

Edit: I will say, if we start fixing prices, where does it end?
Should airlines be able to set the price at what demand would have been without the hurricane? So if a normal Thursday the would have been able to sell tix up to $450, they can set that price?
If it is capped at $200, but I bought a month ago for a regular trip when it was $250, am I now SOL?
Some people are saying price at break-even - is that for the lowest cost carrier or the highest? Or is it for each carrier to determine on their own? Then when DL costs more than NK people are going to bash DL for being more expensive, so now they are losing profit and getting negative goodwill. Also, is it break-ever per flight? What if I can't afford to evac to DEN and ATL is sold out because it was cheaper?

Some are saying the gvt should step in like with the CRAF to evac people. Who is going to compensate the family that now can't fly from ORD to NRT because their 777 is going to evac people out of FL?

Slippery slope we are heading down here...
Last edited by CobraKai on Fri Sep 08, 2017 4:27 pm, edited 1 time in total.
 
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jnev3289
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Re: Airlines Handling Fares During Natural Disasters

Fri Sep 08, 2017 4:28 pm

CobraKai wrote:
jnev3289 wrote:
Great economic debates going on, but does anyone work in RM or know anyone who does?



I worked in RM for a years until earlier this year - what's your question?

Wondering if it's just business as usual, or what is likely going on for analysts with Florida routes. It's a job I'd really like to do actually. I interviewed at AA for it two years ago
 
c933103
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Re: Airlines Handling Fares During Natural Disasters

Fri Sep 08, 2017 4:38 pm

BlatantEcho wrote:
If you guys want to run charity airline flights for people, start an airline!
Donate your life savings to subsidize ticket prices or something!
Donate all your airmiles to charity today!
Charter a plane to make 5 runs down to Florida each day for the next week!
--
This thread is built on some fallacy that a ticket price of '$200' is 'fair and reasonable'.
And there is a magic 'fairness princess' that knows that.
And of course, if that seat is '$400' instead of $200... now no one can afford to save themselves! #scaryairlinepricing

No one ask airlines to sell at lost. No one stop them from making a profit while doing such activities, what people want is just fair and reasonable. 200 or 400 are actually not too far off, but airlines system weren't asking 200 or 400, they were asking 2000 or 4000.

It is normal in regular day to day flying especially when seats are in short supply and demand are high for airlines to gain the most out of the capacity they have and also use the filter of price to let only those willing to pay the price to book the flight, however in a situation of pending natural disaster it is different from regular day to day flying and people expect airlines as a public transport to react accordingly.

If you're going to live in a state that gives you a 5 day warning before a natural disaster happens.
And you are price sensitive enough to not save your own life for a thousand dollars....
Life is a LOT harder than choices like that one. Honestly.

Name me a place on earth where disaster would not occur except with at least 5 days warning.


So:
Costco should sell bottled water at 'breakeven' pricing too anytime the weather is above 80F - that saves lives.
Electricity should be free when it rains, because, well, that would be nice.
Everyone should get a free lollipop too, to ride out any inconvenience in comfort.

Your way of thinking is that, if airlines can't sell their seats at the absolute maximum price travellers are willing to pay, then that would be the airlines' lost?

THE MORE AN AIRLINE CHARGES FOR A SEAT, THE MORE SEATS THEY WILL PROVIDE!
Lower prices would provide LESS seats.

Not really,
When higher price is allowed, they can charge high price and take only those that willing to pay the higih price,
When the price is lower, if airlines want to gain more profit from it, then they would need to transport more quantity of people there, and thus the incentive of using larger aircraft and provide more seats there. While at the end of the day the availability might not be as good, more people would be transported away from there if the airlines react economically.

CriticalPoint wrote:
One point I don't see being made is how do you prevent people from flying who are going on vacation? My house is high and dry so lets go to PHX for a couple days just to stay out of the rain. I can argue their lives aren't being saved so why should they be able to buy a cheap ticket at the airlines expense just to go get some sun?

Now if you want to cap a fare and run rescue flights for people that are directly in harms way then yeah I support that. Unfortunately how do you prove that you HAVE to get out.

Being able to hop on an airplane and leave IS NOT a right it is a privilege. There are 1,000 other ways to evacuate.

Might be true to those live in Florida but not really true for those on islands.


DfwRevolution wrote:
2.Even if they could, I would think twice about boarding thousands of people onto military transports. Generally speaking, military aviation has a significantly higher accident rate than commercial aviation. Military service is dangerous even during peacetime operations.

Is the risk greater than leaving people there? Sometimes youb would have to like what Israel have done in Ethiopia
When no other countries around the world is going to militarily stop China and its subordinate fom abusing its citizens within its national boundary, it is unreasonable to expect those abuse can be countered with purely peaceful means.
 
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CobraKai
Posts: 31
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Re: Airlines Handling Fares During Natural Disasters

Fri Sep 08, 2017 4:38 pm

jnev3289 wrote:
CobraKai wrote:
jnev3289 wrote:
Great economic debates going on, but does anyone work in RM or know anyone who does?



I worked in RM for a years until earlier this year - what's your question?

Wondering if it's just business as usual, or what is likely going on for analysts with Florida routes. It's a job I'd really like to do actually. I interviewed at AA for it two years ago


I can't say what is going on now with all the negative attention, but in disasters previously it was really just business as usual.

Normally when things like this happen, the demand spike is so sudden that capacity fills even before the analysts can react, so it is reliant on the system to manage inventories because everyone waits until a day or 2 before to make sure the hurricane doesn't turn. (Furthermore, we never sat around and tightened the rules to purposely maximize fares because amazingly we aren't heartless).

RM from an analyst perspective is getting less interesting (at least at the airline I worked for) - it is going much the same way as Wall Street, out of the hands of the analysts and into the black boxes of the math guys.

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