Juat a question on "Business Class" ......

[IMA_FARANG]

This may be a silly question, but I know that on this forum topic there are those who seem to have some good knowledge of costs and profits for various airline classes.

Specifically, what I would like to know whether it would be potentially possible for an airline with a popular route todo the following:

• Increase the number of First and Business Class seats by (let's just say) 20%
• Then reduce their fares by (again just picking numbers) 5 % or possibly 10% on these "premium" seats to sell them at a better price for that class of service than competitors could.
• Would this be financially viable? It would seem, that there should be a point where with more seats available, a good marketing program, and the extra revenue generated ...... that such a thing might be profitable for the airline.

I just wonder if some airline traffic or revenue manager somewhere has done a computer analysis of this to see if and how it could be profitable on certain high volume routes.

Anybody on this forum who might have some answers?

Let's just say, for example, on such flights as from Europe and the U.S.A to Southeast Asia

Edited April 13, 2014 by IMA_FARANG

[yermanee]

In view of the fact that many airlines are cramping as many passengers as possible, as for example Emirates on their 777's with 10 abreast, I don't think that many airlines are interested in reducing seat capacity in economy.

Furthermore the airlines have for sure looked at every angle possible to maximize profits dictated by past experience and prognosis of future developments.

Also many airlines have dropped 1st class for a reason.

Would be nice though to have cheaper business

Sorry can't help more.

Yermanee

[Bpuumike]

There is Premium Economy on some airlines. Much better seats and leg room than regular economy though same food.

[seedy]

There is Premium Economy on some airlines. Much better seats and leg room than regular economy though same food.

Why I only fly EVA

[ignis]

To get the right type of people to Thailand [quality tourist] then NO regular economy at all, but would any airline only have 1st class and business class ?

[kwonitoy]

http://www.frommers.com/articles/7084.html

It's been tried before without too much luck

[wprime]

Take the Qantas BKK-SYD routes for instance. It's usually carried by an A330 You have a 2-2-2 arrangement in business and the seats are roughly twice as long as economy seats. In economy you have 2-4-2 arrangement. So just on floor capacity, business class seats take up 2.67x the space of economy seats. Then there's the additional baggage allowance, airport CIP/express passes, food, lounge access, etc. Also consider the fact that they can't oversell the business cabin so no shows are usually replaced with economy passengers to accommodate an oversold economy cabin.

Economy tickets range from 10,000 baht return to 45,000 baht return plus taxes.

Business tickets range from 54,000 baht return to 89,000 baht return plus taxes.

I'm not sure what percentage of seats are sold at which different fare levels, but if we just take averages then business seats cost roughly 2.8x economy seats so when you factor in all of the above, they actually make a greater % return on economy seats than they do on business class seats.

Obviously this assumes an even distribution of fares types which isn't the case, but even from the above figures, the most profitable fares are the full paying economy travellers.

[Chivas]

. Also consider the fact that they can't oversell the business cabin so no shows are usually replaced with economy passengers to accommodate an oversold economy cabin.

Business Class is certainly over sold working on past statistics....

[KittenKong]

I would happily pay 50% extra for an economy seat that occupied 50% more floor space (mostly in the width), rather than pay 300% more to fly business and get a whole load of other extras/services/features I dont want or need.

The main reason I fly business is because I dont fit comfortably into the really narrow economy seats on many modern planes.

So premium economy is the right way to go for me, but sadly most airlines haven't got the space/price calculations in that class right yet.

[wprime]

. Also consider the fact that they can't oversell the business cabin so no shows are usually replaced with economy passengers to accommodate an oversold economy cabin.

Business Class is certainly over sold working on past statistics....

Qantas only oversells business on 3/4 class services, Qantas' SYD-BKK transfers are a 2 class service.

[tartempion]

Seems Etihad found a way to increase revenue with eco passengers paying for business class: they sent you a mail 7 days before you fly offering a bidding price for each segment.

It seems to work, eco flyers will pay a premium to upgrade one segment of their trip, say Abu Dhabi-Bangkok at 300+ euro.

If i fact you would bid and pay for all 4 segments you will end up paying MORE than a normal business class ticket

AND on Etihad your luggage allowance will NOT increase accordingly

I always check seat availability on experflyer.com and see lots of free business class seats until 24h before departure, then when I board the aircraft nearly all business class seats are occupied.

[lomatopo]

I just wonder if some airline traffic or revenue manager somewhere has done a computer analysis of this

In a word, Yes.

Each airline devotes a lot of brains and processing power to yield/fleet/route management.

Each route/city-pair has varying "potential", while (re-)configuring an aircraft can take a long time and require significant capital expense, but you then lose flexibility re: aircraft deployment. And customers get peeved with aircraft substitutions utilizing perceived inferior hard product.

Most airlines currently handle the OP's "idea" with multi-bucket business class inventory offering most restrictive/least expensive buckets like "Z", which also have the most stringent APEX requirements, up through P, J, D and C (these can vary by airline). They'll also over-sell.

Profitability is, broadly speaking, managed by maximizing RASM, and minimizing CASM.

[bkkden]

In fact they do. First class is not as profitable because many of those are business class point redemptions. However, they are always looking at the demand for business class which is highly profitable and growing that segment.

Many of the worlds best carriers focus on business class customers with an array of service, entertainment and excellent f+b. I don't mind 3x or 4x the price for it on long haul travel.

Economy travel in air these days is like being on a bus. No one can complain about economy travel because it is very cheaply priced.

My favorite three are Emirates, Singapore and Cathay, all outstanding!!

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