FlyBoeingJets
YES, that's NICE
- Joined
- Mar 20, 2003
- Posts
- 1,802
Revenue management is very difficult and can fluctuate almost daily.
If a market can support 200 passengers a day it may be foolish to put 2 MD-80's or 737's on it. A mix of a CRJ and a narrowbody may be better. And, as pointed out earlier, the narrowbody during the day for the business traveler with the CRJ for a late flight sounds ideal.
Then there is the next leg or 2 after. If the plane is full on the next leg, is it o.k. to have it 60% on this leg? Even with 2 or 3 CRJ's full on both legs, you would lose revenue on the next leg with less capacity on it. Particularly if the next leg has high yields. It's a balancing act. When you can keep the average daily narrowbody loadfactor, and yield, up the less than 70 seaters lose money.
The ballgame will change with 70-110 seaters. Perhaps only slightly, but the balance of power will significantly shift. International routes with labor making 20% less will again subsidize operations on domestic routes to fend off LCCs and other legacy competitors. We will see some of the same strategies we saw in the mid 1990's. But it will be different with the bigger feed (or smaller mainline E-jets).
We, the LCC's, are seeing the calm before the storm. Hub operations appear to be under great pressure with proposed cuts. The next year will be good for LCC's. But the legacies are just preparing the battlespace before they get funding for, buy, and deploy the new E-jets.
If a market can support 200 passengers a day it may be foolish to put 2 MD-80's or 737's on it. A mix of a CRJ and a narrowbody may be better. And, as pointed out earlier, the narrowbody during the day for the business traveler with the CRJ for a late flight sounds ideal.
Then there is the next leg or 2 after. If the plane is full on the next leg, is it o.k. to have it 60% on this leg? Even with 2 or 3 CRJ's full on both legs, you would lose revenue on the next leg with less capacity on it. Particularly if the next leg has high yields. It's a balancing act. When you can keep the average daily narrowbody loadfactor, and yield, up the less than 70 seaters lose money.
The ballgame will change with 70-110 seaters. Perhaps only slightly, but the balance of power will significantly shift. International routes with labor making 20% less will again subsidize operations on domestic routes to fend off LCCs and other legacy competitors. We will see some of the same strategies we saw in the mid 1990's. But it will be different with the bigger feed (or smaller mainline E-jets).
We, the LCC's, are seeing the calm before the storm. Hub operations appear to be under great pressure with proposed cuts. The next year will be good for LCC's. But the legacies are just preparing the battlespace before they get funding for, buy, and deploy the new E-jets.
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