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Faro
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Y Class: How Important To The Airline Industry?

Mon Oct 29, 2012 10:48 am

With the perpetual focus on J and premium economy, just how important is Y class to the airline industry in terms of:

- revenue; and
- profitability?

What is the trend with respect to Y class? Is it getting more or less important to carriers overall?

What are the highest volume Y class routes? What major carriers rely the most on their Y class traffic for revenue/profitability?

Are there any predominately Y class routes which are highly lucrative?


Faro
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GCT64
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RE: Y Class: How Important To The Airline Industry?

Mon Oct 29, 2012 12:00 pm

Quoting faro (Thread starter):
What are the highest volume Y class routes? What major carriers rely the most on their Y class traffic for revenue/profitability?

A few major carriers come quickly to mind as relying on Y class traffic:
Southwest, Ryanair and Easyjet
 
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airbazar
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RE: Y Class: How Important To The Airline Industry?

Mon Oct 29, 2012 12:09 pm

This topic comes up every once in a while and my opinion is: You can't have one without the other. You need the revenue from J but you can't fly a route profitably without a decent load in Y. How many J class only airlines do you know? Even J only routes have had mixed success. On the other hand there are plenty of "leisure only" airlines and high density Y routes that are succesfull. But for most network carriers both are equally important.

I will even argue that Y has become more important than J over the last few years. With tight budgets companies are less inclined to pay for J class. My company for example only let us travel in J on International routes. Even on a 6 hour transcon we have to travel in Y.

Quoting faro (Thread starter):
Are there any predominately Y class routes which are highly lucrative?

Every charter operator is pretty much a Y only airline and they are lucrative or they wouldn't be in business.
AF for example operates B773's with 458Y seats (422Y + 36Y+), and only 14 J. Thats pretty "predominantly Y".
 
sw733
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RE: Y Class: How Important To The Airline Industry?

Mon Oct 29, 2012 12:57 pm

Quoting GCT64 (Reply 1):

A few major carriers come quickly to mind as relying on Y class traffic:
Southwest, Ryanair and Easyjet

Here's one way to look at it - there seem to be a lot more failures of all-J airlines over the last decade than all-Y airlines. Just a thought.
 
hohd
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RE: Y Class: How Important To The Airline Industry?

Mon Oct 29, 2012 1:18 pm

Almost all of the major airlines will have to reduce their flying if not for Y. Many companies do not allow J even on some TATL itineraries. My previous company had to policy to allow J only on 12 hours or more flights.
 
tdscanuck
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RE: Y Class: How Important To The Airline Industry?

Mon Oct 29, 2012 1:52 pm

Quoting faro (Thread starter):
just how important is Y class to the airline industry in terms of:
- revenue; and
- profitability?

Put very simply, without Y the industry doesn't work. The economics for all-Y and mixed-class can work, as evidenced by airlines all over the world. The economics for no-Y don't work at all...every all-J class airline has failed or is the process of failing.

Tom.
 
AAIL86
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RE: Y Class: How Important To The Airline Industry?

Mon Oct 29, 2012 5:44 pm

Quoting tdscanuck (Reply 5):

Put very simply, without Y the industry doesn't work. The economics for all-Y and mixed-class can work, as evidenced by airlines all over the world. The economics for no-Y don't work at all...every all-J class airline has failed or is the process of failing.

Very well put. As with the Titanic - the first class passengers get the publicity and the steerage passengers pay the bills.
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anstar
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RE: Y Class: How Important To The Airline Industry?

Mon Oct 29, 2012 7:03 pm

Quoting sw733 (Reply 3):
Here's one way to look at it - there seem to be a lot more failures of all-J airlines over the last decade than all-Y airlines. Just a thought.

Really?

I can only think of a few all J airlines that have gone since 2008

- Maxjet
- Silverjet
-EOS

Where as all economy I think of
- Skybus
- SkyEuorpe
- Centralwings
- BMIbaby
- Astreus
- Sterling
To name a few....

then we have all the low cost's that also had a few premium seats like ZOOM, Globespan , Excel, Blue Panorama etc
 
lostsound
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RE: Y Class: How Important To The Airline Industry?

Mon Oct 29, 2012 7:15 pm

Quoting anstar (Reply 7):

That's not a fair statement as the ratio to all economy vs all business carriers is much more prominent on the economy side. In fact since EOS and L'Avion failed, there hasn't been a single all J class airline that I know of start up besides BA's A318 service.

It's an almost proven to fail business model.

Given the economy, I dare say Y class is a huge factor in travel today.

[Edited 2012-10-29 12:17:13]
 
anstar
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RE: Y Class: How Important To The Airline Industry?

Mon Oct 29, 2012 7:28 pm

Quoting LostSound (Reply 8):
That's not a fair statement as the ratio to all economy vs all business carriers is much more prominent on the economy side.

I agree totally... I was just replying to the statement that
"there seem to be a lot more failures of all-J airlines over the last decade than all-Y airlines."

Which is factually incorrect.
 
lostsound
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RE: Y Class: How Important To The Airline Industry?

Mon Oct 29, 2012 7:31 pm

Quoting anstar (Reply 9):

Oh alright, I see your point. Sorry!
 
AA94
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RE: Y Class: How Important To The Airline Industry?

Mon Oct 29, 2012 8:23 pm

Quoting anstar (Reply 7):

I see what you're saying, but I think there is a certain level of interpretation that goes along with your statements ...

Did an airline like Skybus fail because no one wanted to fly an all-Y class airline, or because they had an incredibly flawed business plan? I would go with the latter.
 
anstar
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RE: Y Class: How Important To The Airline Industry?

Mon Oct 29, 2012 8:28 pm

Quoting AA94 (Reply 11):
Did an airline like Skybus fail because no one wanted to fly an all-Y class airline, or because they had an incredibly flawed business plan? I would go with the latter.

Well the J airlines certainly didn't fail because people didn't want to only fly an all J airline.

As with all things - it seems to be the business model that has failed.


BA do alright with their J only LCY-JFK flights, not to mention the other EU flag carriers and their privitair flights.
 
luganopirate
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RE: Y Class: How Important To The Airline Industry?

Mon Oct 29, 2012 8:44 pm

I think 10% of the seats are Business, yet they provide 30% of the revenue. Taken the other way, Y provides 70% of the revenue and few business can afford to lose those sort of numbers. So I guess Y is still important to the airlines.
 
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cosyr
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RE: Y Class: How Important To The Airline Industry?

Tue Oct 30, 2012 12:19 am

With the razor thin margins in the airline industry, even if First/Business covered 99% of the costs, Y would still be extremely valuable. Until you're making a profit, everything counts...after you're making a profit, everything still counts to make a bigger profit.
 
22886
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RE: Y Class: How Important To The Airline Industry?

Tue Oct 30, 2012 1:04 am

Quoting LostSound (Reply 8):
In fact since EOS and L'Avion failed, there hasn't been a single all J class airline that I know of start up besides BA's A318 service.

It's an almost proven to fail business model.

There's also Hong Kong Airlines' all J HKG-LGW service, which guess what, has also failed.
 
BlueLine
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RE: Y Class: How Important To The Airline Industry?

Tue Oct 30, 2012 1:15 am

Look at it this way: F and J will determine how much money you make on a route. Y will determine if you make money at all.
 
ORDJOE
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RE: Y Class: How Important To The Airline Industry?

Tue Oct 30, 2012 1:17 am

Quoting 22886 (Reply 15):

There's also Hong Kong Airlines' all J HKG-LGW service, which guess what, has also failed.

No surprise there,
I think the only all J service that is working is the BA LCY-JFK flights.

The problem with those all J airlines is I do not seem them garnering many corporate contracts, they were all too niche and small time. There are really not many rich travelers to buy those J seats for vacations either.
Like others have said, you cant have one and not the other.
 
davidho1985
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RE: Y Class: How Important To The Airline Industry?

Tue Oct 30, 2012 1:58 am

Many people claimed that Y allow the airlines to recover the operating cost of the flight.
And F & J allow them to earn therir "profit" from the flight.
 
Viscount724
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RE: Y Class: How Important To The Airline Industry?

Tue Oct 30, 2012 2:24 am

Quoting anstar (Reply 12):

BA do alright with their J only LCY-JFK flights, not to mention the other EU flag carriers and their Privitair flights

If you're referrihng to the all-J services once operated by Privatair BBJs for KL AMS-IAH and for LX ZRH-EWR, both those services ended within the past year. And the remaining Privatair-operated BBJ services for LH are no longer all-J but operate in 2 class (J and Y) configurations.

Another example of how difficult it is to make those types of all-premium class services economic was the decision by Open Skies to add Y-class seats to their 752s.
 
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tjcab
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RE: Y Class: How Important To The Airline Industry?

Tue Oct 30, 2012 2:35 am

Quoting anstar (Reply 9):
I agree totally... I was just replying to the statement that
"there seem to be a lot more failures of all-J airlines over the last decade than all-Y airlines."

Which is factually incorrect.

but as a percentage? have there not been a lot more all-Y's than J starting? What is the failure rate? One might have to run some numbers.
 
Quokkas
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RE: Y Class: How Important To The Airline Industry?

Tue Oct 30, 2012 2:39 am

Quoting BlueLine (Reply 16):
Look at it this way: F and J will determine how much money you make on a route. Y will determine if you make money at all.

Do we have any way of proving that?

On the surface it seems plausible but given that in the International air business (as opposed to domestic) the amount of space compared to price doesn't necessarily bear it out. People pay a premium to fly first but on a cubic metre basis are they paying that much more, particularly when you factor in lounge access, separate check-in lanes, chauffeur driven transfers, a greater range of meal and drinks, , amenity kits, etc?

The other aspect is that the first class cabin is often not full. An empty seat in F is losing more than an empty seat in Y. Which may go part way to explaining why so few carriers offer International First class on anything other than flagship routes.
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RamblinMan
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RE: Y Class: How Important To The Airline Industry?

Tue Oct 30, 2012 3:09 am

Quoting faro (Thread starter):
What is the trend with respect to Y class? Is it getting more or less important to carriers overall?

Just ask the *former* CEOs of Silverjet, Maxjet, or EOS. On the flip side...I don't see Southwest or JetBlue in a hurry to add F/J

Premium cabins can be huge moneymakers but can't form the basis of an entire airline. A couple of reasons...
1. It's tough to fill F and J on an international flight without offering a network of domestic connections on one end or the other. And it'll be a cold day in hell before there is an all-F domestic carrier.
2. Y class demand is more consistent, and unsold Y inventory can often be taken care of by having a sale. Sometimes you can't put butts in J seats without practically giving them away. It's better to give upgrades as a loyalty bonus than it is to offer your premium cabin too cheap.

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