Eliminate First Class?

[Typhoon1244]

Some of you may have seen the editorial in USA Today. The writer (whose name escapes me) suggested that the majors might do well by eliminating 1st class sections and, as a consequence, increasing leg room slightly in a one-class layout...for domestic service, that is. He claimed it wouldn't really matter sine 1st class service is only a shadow of its former self anyway.

It's working at Southwest, MidWest Express, and Jet Blue, right?

What do y'all think? Do away with the big seats?

 

[Sphincter Boy]

Yeah..its called buying 50 pax regional jets.

 

[chperplt]

I vote NO

Without first, there wouldn't be anyplace for us non revs to sit!

 

[Speedtree]

He has a point. If an airline is going to offer first class they need to offer the attitude and service to go along with it. If it's a half-assed operation why bother.

I believe service has slipped. Not everyone wants to fly southwest, especially on a full flight. Some people are willing to pay the extra dough for the first class but it better be worth it. I believe United and others are missing out on the opportunity to provide some exceptional service.

 

[FL000]

I wonder if that writer has been overseas in coach AND first class.

 

[altimaklr]

First Class upgrades are the only reason business travelers pay the exorbitantly higher fares on AA, UA, DL, etc instead of flying Southwest or Jetblue.

 

[Skyboss]

Some of you may have seen the editorial in USA Today. The writer (whose name escapes me) suggested that the majors might do well by eliminating 1st class sections and, as a consequence, increasing leg room slightly in a one-class layout...for domestic service, that is.

I think the writer should write about things he/she understands. Unless he shows an education and experience in Airlilne economics, he should shut his pie hole. I've run numbers on creating my own airline with all business class seats and more space than Midwest and I come out roses. I'm still testing the model, but to give you an idea... 767-300 with six across and 37" seat pitch turns a hell of a profit going coast to coast for $10.00 more each way per ticket. If you have better service and clearly better comfort, is it worth $20 to you. 70% of 1500 surveyed said yes. If the airline really want to make money, they could drop first class fares by charging only a 10% premium over regular tickets and their won't be any room for non-revs. They could also offer 21 and 14 day advanced purchase first class tix and make them non-refundable.

Study Aircraft:

(Aircraft/Seats/Pitch/Width):

ERJ-170/64/34/18 - 4 across
ERJ-190/88/34/18 - 4 across
757-300/120/38/18.5 - 4 across
767-300/180/38/18.5 - 6 across

Will be looking at 7E7 when prices and better data come up. It's projected this aircraft will have a standard 18.5" width seat which would eliminate having to narrow number of seats in a row. This coudl push a capacity to 200 and a cost 10% less than the 767-300.

 

[Citationkid]

I like what Airtran did. They have what you could call a first class and it only cost $30 to upgrade. Not really a first class tho just bigger seats and better service.

 

[cessna_driver2]

I like midwest idea. The entire cabin is 1st class seats. Two rows aside. Best care in the air. Cost little bit more, but I'm willing to pay for good service.

 

[generaltso]

If no first class where you put all the non-revs?!

 

[Mu2Driver]

I will take my free first class seat on Delta any day as a non-rev, especially to Europe (that's a real treat!) I seem to get first class more now than ever before...however as a stockholder, I wish they would fill them up with revenue passengers so maybe we can start making some money again.

 

[wil]

It's the non-rev 1st class seat that keeps me from going postal!

 

[Skyboss]

I like midwest idea. The entire cabin is 1st class seats. Two rows aside. Best care in the air. Cost little bit more, but I'm willing to pay for good service.

They should run head to head with SWA in the large markets. I think they'd win, big time. They got a pretty good deal on their 717's. About $22.5 Million + seats. Short hops make 717's a cash cow.

Sample Trip:

LAX to LAS - 230 Miles

Block Time: 55 Mins
Trip Cost: $2800

Seat Cost: $32 (roughly)
Max Revenue (100%LF): $5369
Average Fair: $61 ($29 to $89)
Break Even LF: 52% (45 pax)


The ERJ-170/190 etc... Have 18" wide seats and are projected to be a little cheaper. Of course nothing beats a first class/business class seat and a chocolate chip cookie.

 

[350DRIVER]

I vote no. Eliminating first class really will not do any of the major airlines any good since most business travelers look forward to this and alot will attempt to "upgrade" by using the miles and status that they have earned by flying frequently. When I worked for Delta this was a big thing that the typical business person would want and atleast try to get. (was somewhat difficult in the HOU market cause of the loads into both ATL and CVG). Taking the first class cabin out of play and making "more room" for all would cost the majors too much money in revenue since the difference in price is quite substantial on the key marketed routes. One could make the point that the first class seat is too much additional money BUT there are plenty of business people out there that like the extra pampering and will pay the money regardless of what it costs. You will always have first class with the majors, possibly down the line they may attempt to step it down a notch and do what Air Tran has done and make it more cost friendly but with the current economic shape the the airline industry the majors need all the extra revenue they can get and first class certainly does not hurt when the costs are plugged into the equation. Today you are even getting less "first class" quality so this has to play in favor of the airline. I am certainly not a fan of SWA and will avoid them at most costs but I suppose one must respect the business philosophy that has made them so successful over the years. SWA will always make money since they cater to a certain clientel of people BUT most people who enjoy the "extra" service and pampering will probably not be switching from a DAL, UAL, NWA, to a SWA any time soon . . . Even in today's economy money is still not an issue to many.


c h e e r s


3 5 0

 

[501261]

They should run head to head with SWA in the large markets. I think they'd win, big time. They got a pretty good deal on their 717's. About $22.5 Million + seats. Short hops make 717's a cash cow.

Sample Trip:

LAX to LAS - 230 Miles

Block Time: 55 Mins
Trip Cost: $2800

Seat Cost: $32 (roughly)
Max Revenue (100%LF): $5369
Average Fair: $61 ($29 to $89)
Break Even LF: 52% (45 pax)


The ERJ-170/190 etc... Have 18" wide seats and are projected to be a little cheaper. Of course nothing beats a first class/business class seat and a chocolate chip cookie.

Kid, I thought we got rid of you! Son, its obvious you don't know anything the about business side of this industry! $2800 to run a 717 from LA to Vegas??? That might pay for the gas and warranty program, now how do you suppose we pay for the airplane itself! I don't suppose the bank is going to give us the planes do you. How about paying for those pesky ramp agents and baggage guys? I don't suppose you plan on marketing your product, $50,000 for those full page ads United's been putting in the USATODAY!

Here's to hoping that school is back in session soon, so that you have a little less time on your hands.

 

[Skyboss]

Ask Boeing....

Per Boeing (Block Hour Costs):

Crew Cost: $378
Fuel/Oil: $658 (4425 PPH)
Rentals/Depreciation: $650
Insurance: $10
Fees: $21
Direct Maintenance: $173
Labor Burden: $85
Other Direct: $32

Total Direct: $2007
IDOC: $1000 (Aprox)

Net Block Hour Cost: $3007

Distance: 236NM
Flight: 32 Mins (At 280 Kts)
Block add: 20

Block Time: 52

Standard Seat Cost (117 Seats): $24.37
MEH Seat Cost: $32.40/$33.40 with a cookie.

CASM: $.1374

Feel free to check this against their most recent annual report. You'll find their actuals are a bit lower, but the short haul trips gennerally cost more in terms of CASM.

http://media.corporate-ir.net/media_files/NYS/MEH/reports/MEH_2002_AR.pdf

 

[501261]

Eliminate First Class

I've said it once and I'll say it again, I'd rather fly Jet Blue, or Frontier (with the TV's) than domestic first class on UA, AA, or DL! The domestic first class product is simply not worth the cost.

However you are looking at first class at the wrong end of the revenue spectrum, the additional revenue that the first class fare brings in is almost an afterthought, the real value of first class is at the back end of the revenue spectrum, brand loyalty!

Do you think that anyone actually buys a first class ticket? A typical 757 has 24 first class seats, my guess is that one or maybe two of those are bought outright. The rest are upgraded or use frequent flier points. The possibility of the upgrade rewards brand loyalty, brand loyalty will keep someone flying on that airline even though brand blue is cheaper, more convenient, etc.! I’m certainly guilty of flying a brand to get my points up, and staying at certain hotels to get the coveted Platinum/Diamond level.

Besides I think you'd be stupid to buy a first class ticket, all it takes is 1 late arrival, 1 missed connection, 1 change in plans and "we'll get you on the next flight out, but first class is sold out!"

The people that can afford first class on a regular basis probably already own business jets.

 

[Skyboss]

That's the whole point. On short haul, they woudln't have to charge first class fare. In fact, if they could stomach the lower revenue ratio, then they can kick SWA's butt on a short haul flight. Imagine a first class seat at a coach fare.

TVs woudl add about $.01 to the seat mile cost. They're on the order of $250K per plane for the whole system.

 

[501261]

Re: Ask Boeing....

Per Boeing (Block Hour Costs):

Crew Cost: $378
Fuel/Oil: $658 (4425 PPH)
Rentals/Depreciation: $650
Insurance: $10
Fees: $21
Direct Maintenance: $173
Labor Burden: $85
Other Direct: $32

Total Direct: $2007
IDOC: $1000 (Aprox)

Net Block Hour Cost: $3007

Distance: 236NM
Flight: 32 Mins (At 280 Kts)
Block add: 20

Block Time: 52

Standard Seat Cost (117 Seats): $24.37
MEH Seat Cost: $32.40/$33.40 with a cookie.

CASM: $.1374

Feel free to check this against their most recent annual report. You'll find their actuals are a bit lower, but the short haul trips gennerally cost more in terms of CASM.

http://media.corporate-ir.net/media_files/NYS/MEH/reports/MEH_2002_AR.pdf

Kid you still don't get it. The cost of operating an airplane is only about 25% of the cost of the entire operation. Got any idea how much it costs to finance a $22M airplane? Give you a hint it's close to $250K per month.

Let's put it in terms a high schooler (you) can understand. Your car costs $40 a month to fill up, your thinking if I make $160 a month a the ice cream shop, I can easily afford the car, with gas, insurance, and a little left over. Conveniently forgetting that the car costs $350 a month to finance!

 

[Skyboss]

Re: Re: Ask Boeing....

Kid you still don't get it. The cost of operating an airplane is only about 25% of the cost of the entire operation. Got any idea how much it costs to finance a $22M airplane? Give you a hint it's close to $250K per month.

Let's put it in terms a high schooler (you) can understand. Your car costs $40 a month to fill up, your thinking if I make $160 a month a the ice cream shop, I can easily afford the car, with gas, insurance, and a little left over. Conveniently forgetting that the car costs $350 a month to finance!

Back for school again?

Monthly Rate: $180K at 8%

Annual: $2.160M

Utilization: 3500 BlkHrs/Yr - 9.7 Per day

Hourly Cost: $610 - Aircraft Hull Only. This reflects a lease. If it's bought or partially done on a loan then you pay significantly less and write off the depreciation.

Direct Operating costs are approximately 45% of an airlines operational cost. IDOC is 55%. If you look at MEH's annual report instead of spouting, you'll find my CASM is high, meaning the trip actually costs MEH less when factored in with their entire system.

At your estimate, everyone would be out of business.