Would you pay extra for an aisle seat?

[sweptback]

I think the BlackPilot 628 is correct. if everyone was to raise prices 20$ their will not be a large change in load factors. People are not going to start driving. I dont know why prices have not gone up already.

Once again, economics 101. Trust me when I say that the airlines have the fares set (for the most part) at the price that will get them the most revenue. How they manage that revenue, however, is a different story.

Instead of increasing fares, the airlines should reduce capacity. Assuming nobody else jumps in the void created (which of course would never happen), supply goes down and demand goes up. Guess what happens next!

 

[tuna pimp]

I think the BlackPilot 628 is correct. if everyone was to raise prices 20$ their will not be a large change in load factors. People are not going to start driving. I dont know why prices have not gone up already.

You're assuming everybody is going to raise the fares $20. Airlines try to do so ALL THE TIME. Sometimes it works and the fares stick. Oftentimes they don't. SWA just initiated a fare increase late last week. From what I understand it stuck so far:

http://biz.yahoo.com/ap/060313/air_fares.html?.v=2

 

[RP170]

Once again, economics 101. Trust me when I say that the airlines have the fares set (for the most part) at the price that will get them the most revenue. How they manage that revenue, however, is a different story.

Instead of increasing fares, the airlines should reduce capacity. Assuming nobody else jumps in the void created (which of course would never happen), supply goes down and demand goes up. Guess what happens next!

Reduce capacity? Are you kidding me? Load factors are upwards of 80% on most all carriers which means prices should be higher. How's that for supply and demand Mr. Economics 101? It appears to me you know nothing about economics. If load factors were running around 50-60% on a consistent basis then yes, todays prices would be reasonable.

 

[dalegribble]

Next will be the lav fee.....

That blue juice aint free ya know. $2 to stand $5 to sit

Feel like washing afterwards.....put a quarter in the slot for soap, value pack $4.60 flush, wash and dry your hands afterwords.

Flight attendant flirting fee. $10.

Boarding preference... Want to get on early to make sure you have room for your carryons? The old folks and screaming kids can wait..... Preboarding with guaranteed overhead bin space $20 each.

Any other ideas?

It is getting crazier. Kudos to the airlines that raised their fares though, wasn't much but I hope it sticks and continues.

 

[Wankel7]

I'd pay more for hotter flight attendants...

 

[SiuDude]

from Jay Leno:

$15 for an aisle seat? Didn't that used to be free? What if you want a sober pilot? Is that a 100 bucks now?

 

[IHateMgmt]

If load factors were running around 50-60% on a consistent basis then yes, todays prices would be reasonable.

50-60%? You think that is the load factor airlines earn the most profit? You've got to be kidding me. It's generally excepted that todays airlines care about one thing and that is money. So if they care about money so much, why does the entire industry seem to aim for about 80% LF? You should be able to tell from my name I'm not a big fan of airline mgmt. They're ruthless bastards that are f*cking with a lot of peoples lives, but they're not stupid.

 

[RP170]

50-60%? You think that is the load factor airlines earn the most profit? You've got to be kidding me. It's generally excepted that todays airlines care about one thing and that is money. So if they care about money so much, why does the entire industry seem to aim for about 80% LF? You should be able to tell from my name I'm not a big fan of airline mgmt. They're ruthless bastards that are f*cking with a lot of peoples lives, but they're not stupid.

Nope they aren't stupid at all are they? Look at what's happened to all the legacy carriers and their employees over the past 5 years.

 

[Carl_Spackler]

As someone mentioned earlier, if a fare increase to stick, everyone has to do it. Doesn't happen very often.

Take a one way flight on a 757 with an 86% load factor and an average ticket price of $500. The revenue on this flight (from ticket sales) would be about $80,000. If they raised a ticket price just $3 for that flight and one pax decided to take another airline instead, then the $3 raise in ticket prices for that flight would not even cover the loss of revenue for that one pax that traveled on another airline.

If prices went up $20 then no more than 5 pax could leave to another airline
before the revenue would be the same with the lower ticket prices.

The higher ticket prices are, relative to the competition, the higher the percentage of pax will decide to take another airline for less money.

The lower the load factor or the smaller the plane, this effect increases due to the fact that the loss of revenue would have to be absorbed by fewer passangers in order not to lose revenue.

 

[atrdriver]

As someone mentioned earlier, if a fare increase to stick, everyone has to do it. Doesn't happen very often.

Which kind of shows how smart management types are. It is possible to fill up an airplane and lose money. Whether it is coordinated or not, proces need to go up across the board. Problem is, right now, those smart management types see a fare increase at a competing carrier as a possibility for increased market share, all while losing money to get it. Personally I would rather have 10% market share and make money than hav a 90% market share and be losing my a$$.

 

[tuna pimp]

Which kind of shows how smart management types are. It is possible to fill up an airplane and lose money. Whether it is coordinated or not, proces need to go up across the board. Problem is, right now, those smart management types see a fare increase at a competing carrier as a possibility for increased market share, all while losing money to get it. Personally I would rather have 10% market share and make money than hav a 90% market share and be losing my a$$.

This is true at some carriers. By the same token, this is why some carriers are reducing capacity (AA, DL, UA). To increase yield by cutting back capacity. The other side of the equation is to then redeploy the capacity in markets that are more insulated from low fare attacks (Latin/transAtlantic).

 

[gator_hater]

Sure, would pay different amounts for different seats, I would also pay more for the crappy middle seat. You pay mre for "better" seats at the ball game or the concert, why not the airplane??

 

[BlackPilot628]

Tuna Pimp,

I respect the post and it was a good post. I'm no economics major for sure and I'm sure there is more to it than raising prices. It seems that all of the carriers want to other carriers to jump at it first. Well, SWA has. I assure you that SWA will continue running at their 80% + load factor.
I'm not just talking about 1 airline raising prices. I think all the airlines need to raise prices, make it better for everyone.

A B757/B767 Capt for United told me in a hotel van last summer, that is was cheaper for his wife to fly on SWA from FLL-TPA then it was for him to catch a van service from PBI-FLL to commute to ORD. That's just crazy to me.

Thank for an informative post.

 

[blackbox]

Just to clarify.........its not 15 bucks for just an aisle seats. Its only on the aisle seats that offer more leg room. Like, i think its row 6C on the DC-9, where there isnt a seat in front of you. Or on the aisle seat 757s that are right behind the 2 seats in an exit row. its not every seat with a C or D on it.

 

[tuna pimp]

Tuna Pimp,

I respect the post and it was a good post. I'm no economics major for sure and I'm sure there is more to it than raising prices. It seems that all of the carriers want to other carriers to jump at it first. Well, SWA has. I assure you that SWA will continue running at their 80% + load factor.
I'm not just talking about 1 airline raising prices. I think all the airlines need to raise prices, make it better for everyone.

A B757/B767 Capt for United told me in a hotel van last summer, that is was cheaper for his wife to fly on SWA from FLL-TPA then it was for him to catch a van service from PBI-FLL to commute to ORD. That's just crazy to me.

Thank for an informative post.

Problem is just that you can't have all the carriers discuss a fare increase ahead of time. That's collusion and the Feds don't take too kindly to it. So the way it works is that one carrier will come out and file an increase in fares and then hope that all the other ones follow. I think DL just filed an increase last week again. Usually it's the SWA's and JetBlues of the world that don't lead or follow and end up spoiling the party for everybody else.

Lately that's been changing too and the industry has been gaining some traction in terms of average fare:

http://www.usatoday.com/travel/news/2006-03-20-summer-travel_x.htm