Dieuwer wrote:So we have tons of domestic capacity additions leading to trashy fares, while TATL premium fares are still sky high. What gives?? Why are airlines not adding TATL premium capacity instead of trashing it out domestically?
Case in point:
Next Monday BOS-LAX, cheapest B6 Mint = $619. Cheapest J BOS-LHR = $6609 (DL).
Combo of factors, some of which you have already alluded to.
1. Because they can.. TATL JV's exist for a reason and it's not all about the customer
2. Means they can get away with offering trashy domestic fares and making it back up on TATL because bigger margins.
3. Costs for TATL are a bit larger than domestic, especially if flying to LHR and having to pay the APD and other taxes, you would be surprised how little the actual fare was.
4. Comparing a little bit of apples and pears. B6 is no TATL J, however they market it. But let's not forget a lot of J space is taken up with FF and upgrades using miles, so capacity is limited, of course they are going to try and charge higher prices to make the return on the real estate that remains, that's just economics.
5. As we have seen by the blustering of B6 over their initial attempts to get into LHR, it ain't that easy, even those with Premium Economy like DY, FI have not made a huge impact in the J market because of #4
I agree, a 10x differential for a flight of around the same length is insanity, but at the end of the day, the market is about charging what it's willing to bear. If DL's customers are ultimately willing to pay $6609 for a 7 hour flight in J, why would DL leave money on the table and charge a lower price. Any finance/economic type person would tell you they are doing exactly what they are supposed to do.
The only way to bring it down, is bring in a competitive offering like Mint that provides excellent value for Money, or another airline willing to take the risk with a premium offering to match it, it's a reason why types like Silver Air, Open Skies and La Compagnie, tried their all J offering to tap into that market and well you can see how well that ended up.
It basically needs some airlines to go in and push that capacity up with an offering that is more than comparable. VS won't do it, because they belong to DL, AA/UA don't want to do it, because well AA was running CDG and bailed and UA gave up that ghost along ago. B6 could do it, if they could find their rear end from their elbow in terms of moving that forward. DY/DI could do it, but need to pack their planes right now, so taking seats out is not good. (just think DY's 789's carry 344, JL's as an example are more like 180.. BIG difference!), I would love to have seen MT try something like that, but again like DY they need to pack planes to make them work and they canned BOS anyway.
As I said, the TATL JV's exist for the benefit of those in it, not for the customer, if those were ripped up, you might lose a few routes, but at least you might have some chance at some competition. I was looking forward to the 4 way fun on CDG, between, PF, DY, AF and DL, but alas not to be..