Re: AirFares Make no Sense


Reef Fish wrote:
> James Robinson wrote:
> > "oconnell@xxxxxxxxxxxxxxxx" <oconnell@xxxxxxxxxxxxxxxx> wrote:
> > >
> > > RK wrote:
> > >
> > >> I checked business class tickets to Asia from North America. The
> > >> economy seats are going for $1800 roughly, the business class? $9500
> > >> or so. Why are they 7x ? It's the same plane. They use up more
> > >> space, but only about 50% more. They get better services, but the
> > >> food and drinks are probably only about 20% better. Maybe there is
> > >> 10% more service? Why 700% more cost?
> > >
> > > Well, the easy reason is because people will pay for it. Slightly
> > > more complicated is that the two are relatively different products
> > > and so they are catering to different customers with different
> > > price sensitivies. I'd check that 50% number though, the usual
> > > number I've heard is more like 70% more space.
> >
> > In the first place, $9500 is only 428% more cost than $1800, not 700%
> > more. (5.28 times the price.)

I should have proofread what I posted more carefully before posting.
A few corrections that otherwise wouldn't make much sense.
>
> He probably learned it from some "new math". :-) Besides he had said
> 7x which would have been only 600%.

The OP was talking about 700% MORE; that's why 7 times is 600% more.
:)
>
> >
> > With the extra legroom, and fewer seats in a row, business class seats
> > use about three to four times the space as economy class (200 to 300
> > percent more). It varies somewhat if the business class seats fully
> > recline to a bed or not.
> >
> > That means, with the fares quoted above, the airlines are getting a
> > little over 5 times the price, for 3.5 times the space.
> >
> > If I look at fares between LAX and HKG next week, I find typical economy
> > fares between $900 and $1,000, and business class fares ranging between
> > $3,000 and $7,000. That's a range of between 3.3 and 7 times the price.
> > It seems they do sell business class seats at the ratio of the space on
> > occasion.
>
> I have taken that route on FFM upgrade, and the last time after CO
> had changed its rule by requiring a $300 supplement to the low
> coach fare plus 50K FFMs.
>
> One way to look at that is, at the nominal rate of $20 per 1K FFM,
> the cost of upgrade is only $1,300, substantially below the
> $3000-$7000 range you cited.
>
> That's yet another advantage of being in the CO FF Program, because
> I not only get all (95+% over the past 6 years, 100% the first
> 4 years),

I left out the punchline word of "free upgrade to FIrst Class" over
those 6 years, 100% for the first 4 of those 6 until CO tightened
its upgrade rules to bring in more revenue.


> the "value" for the FFM for upgrade to CO's Business
> First (which is substantially better than CO's domestic First) in
> international travel is that the value of the FFM were/are always
> substantially better than the nominal value of $20 per 1K miles.
>
>
> > Beyond those flights, there simply aren't enough people who want to pay
> > that kind of many to get to their destinations. That's why the number
> > of business and first class seats are limited.
>
> Regarding to topic of "no sense", this subject has appeared many
> times before. Basically the airlines have to price certain routes
> and oombination of routes (in some mathematical optimization
> sense) to come up with the combination that will be "marketable".
>
> That's why I have flown MANY times roundtrip from ATL to Cozumel,
> via IAH, and the ATL/IAH roundtrip cost LESS than the IAH/CZM
> roundtrip (the same time, same planes) that is only PART of my
> trip. In otherwords, CO pays me to fly the ATL/IAH portion. :-)
>
> That's another reason why the airlines no long allow using part
> of a roundtrip ticket, because there would be NO market for the
> IAH/CZM which cost more than the ATL/IAH/CZM!
>
> That's only the tip of the iceberg on the "Make no Sense" pricing.
> It makes sense only from the company's global point of view, and
> the only thing for SURE is that the cost of flying is NOT
> proportional to the distance flown. :-)

Nor is the cost "additive". A ticket from A to C via B, can
cost more, or less, than the sum of tickets (from A to B and
B to C).
>
> -- Bob.

.

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