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Give them an inch and they take $773 million

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Re: Give them an inch and they take $773 million

#81

Post by seanmcdirmid »

michaelt wrote: post #68
tiredofcareer wrote: post #21

Earlier quoted context omitted.

For most customers, maybe, but I suspect there's a pretty sizable portion of the population (myself included) that will happily pay more for an airline that treats me extraordinarily well, considers my comfort while on board, and gives me reasons to shout their name down the street. For example, Virgin America is one of those airlines for me, and I will happily pay a premium to fly one of their tragically few routes…

For most customers, maybe, but I suspect there's a pretty sizable portion of the population (myself included) that will happily pay more for an airline that treats me extraordinarily well, considers my comfort while on board, and gives me reasons to shout their name down the street. I'm not an air travel expert, but as I understand it many airlines offer seats in classes such as 'economy', 'business class' and 'first…

The difference between economy and business class is 3-5X. Its like a completely different world/price level, that those of us stuck in economy can only dream of.

To sleep on a 12 hour flight...that would be great!

Re: Give them an inch and they take $773 million

#82

Post by mseebach »

URSpider94 wrote: post #49
tiredofcareer wrote: post #44

Earlier quoted context omitted.

I wouldn't be so sure. I pay a rent premium for a view.

Yes, but presumably you looked at the apartment first. Unless airline search sites start listing seat pitch, amenities, seat recline, in-flight entertainment quality, etc. next to the ticket price when selecting a fare, it's hard to see how these factors would play into a purchase decision. Even if the data were there, I'm wagering that the lions share of customers would keep $20 in their pocket at the cost of some m…

> Even if the data were there

Oh, but the data is there.

http://www.bbc.co.uk/news/business-21227287

Re: Give them an inch and they take $773 million

#83

Post by StavrosK »

josefresco wrote: post #73
DrStalker wrote: post #6

If flights are at 80% capacity adding 6 extra seats just means an extra 6 empty seats on every flight. The $733 million number is meaningless - what is actually needed is to know how many post-reconfiguration flights had 5 or fewer free seats, since that is the only situation in which the extra capacity is being used.

Not if they maintained the same occupancy rates but with a higher total capacity. 80% of 100 is 80 80% of 106 is 84ish

Why would the average number of passengers suddenly change just because they installed six more free seats?

Re: Give them an inch and they take $773 million

#84

Post by coldcode »

larsberg wrote: post #77
mrshoe wrote: post #51

In addition to the sketchy mathematical foundation, there's another reason to not draw too many conclusions from this observation: your company, product, and customers are probably quite unlike Southwest Airlines. For starters, airline customers care almost exclusively about price. Joel Spolsky was wise to warn against doing what this article suggests ( http://www.joelonsoftware.com/items/2007/09/11.html ): In one of…

> For starters, airline customers care almost exclusively about price I fly exclusively on United because they have Economy Plus, which lets me buy an additional 3-5" of legroom at a reasonable additional price. Sure, it's more than Southwest or whatever else, but I'm more than happy to give them my dollars for the extra space.

At 6'5" I have to look for room even if I have to pay extra.

Re: Give them an inch and they take $773 million

#85

Post by mseebach »

Nursie wrote: post #72
mrshoe wrote: post #51

In addition to the sketchy mathematical foundation, there's another reason to not draw too many conclusions from this observation: your company, product, and customers are probably quite unlike Southwest Airlines. For starters, airline customers care almost exclusively about price. Joel Spolsky was wise to warn against doing what this article suggests ( http://www.joelonsoftware.com/items/2007/09/11.html ): In one of…

>> For starters, airline customers care almost exclusively about price. I wish that wasn't the case. I'd gladly pay an extra £20 on an international flight for decent food, and I regularly do pay an extra £50 or so for more room or an exit row seat. I know there's a market of people like me, for whom business class is way to expensive just to make a few hours a bit more pleasant, but who aren't just counting every pe…

You're the "almost" in "almost exclusively". I am too.

When I was younger, I had more time than money, I travelled many a long hour in "cattle class", but I have some pretty awesome experiences to show for it. These days, I've got less time, but much more money, so I'll spend it for more comfort - but I'd be a damn hypocrite if I wanted airlines to do any less than their best to make sure young people of today can get the same experiences.

Re: Give them an inch and they take $773 million

#86

Post by Nursie »

mseebach wrote: post #85
Nursie wrote: post #72

Earlier quoted context omitted.

>> For starters, airline customers care almost exclusively about price. I wish that wasn't the case. I'd gladly pay an extra £20 on an international flight for decent food, and I regularly do pay an extra £50 or so for more room or an exit row seat. I know there's a market of people like me, for whom business class is way to expensive just to make a few hours a bit more pleasant, but who aren't just counting every pe…

You're the "almost" in "almost exclusively". I am too. When I was younger, I had more time than money, I travelled many a long hour in "cattle class", but I have some pretty awesome experiences to show for it. These days, I've got less time, but much more money, so I'll spend it for more comfort - but I'd be a damn hypocrite if I wanted airlines to do any less than their best to make sure young people of today can ge…

True, true, necessary travel is necessary and unnecessary travel is worthwhile and a broadening experience and definitely to be recommended. Pricing it out of mass market reach would be a bad thing.

I guess to get food that isn't just crap you need to pick your airline. Singapore aren't too awful, and Delta's chicken salad the other week on my ATL->LHR flight was perfectly OK, but that seems the exception rather than the rule.

I listened to a Radio 4 documentary on airline food the other week which was quite interesting. It revealed, amongst other things, that on many airlines there is a budget of roughly £1 ($1.50) per passenger per meal, which goes some way to explaining the hopelessly poor quality. And no, having travelled business class on a number of occasions, that old line "your taste buds are affected by the pressure" has never worked on me...

Re: Give them an inch and they take $773 million

#87

Post by wtvanhest »

josefresco wrote: post #69
jcampbell1 wrote: post #47

Earlier quoted context omitted.

Assume the pricing for seats is as follows: $100 for first 50% of capacity $120 for next 20% $170 for next 20% $300 for next 5% $600 for final 5% What is the revenue impact of expanding capacity? The solution is not obvious, but the author's approximation is more accuare than you suggest. You obviously can't solve this without a stochastic ticket demand model, but 4.8 is much closer to the right answer than 0.

Also if the airline wants to maintain an 80% capacity, having an extra x% of seats means they add to revenue if they can maintain that occupancy percentage. In this case we don't even need to factor in 100% occupancy, which if anything would help the numbers as I'm sure last seats on a fully booked flight aren't cheap.

They target around 100% full. That being said, having more seats allows them to adjust their pricing model so that they have more seats to attempt to maximize revenue.

Depending on the demand structure of routes, those 6 seats may have wildly different values and could potentially be worth more than the average ticket price, on average for the airline.

Since this is counter-intuitive, I'll explain why briefly:

Airlines attempt to price discriminate by selling low priced tickets to leisure travelers and high priced tickets to business customers.

The problem airlines face is that business travelers book at the last minute.

Since business travelers book at the last minute, they need to estimate the number of business travelers who will be flying.

If the average leisure passenger ticket sells for $100, and the average business ticket sells for $500, just having 1 extra seat can add 5 leisure tickets worth of revenue assuming they sell the same number of leisure tickets.

Realistically, their model will readjust the optimal pricing changes overtime to capture the most value. Because the additional seats give the model more flexibility, I would not be surprised if the additional seats added more than an average of 80% of 6 seats multiplied by the average ticket price.

Re: Give them an inch and they take $773 million

#88

Post by freehunter »

yardie wrote: post #76
shabble wrote: post #60

Earlier quoted context omitted.

coming next, Responsive Seating! per-flight configurable seat modules, for exactly the number of people on board, and can be quickly loaded/unloaded to minimise excess weight. Installed seats adjust their clearance automatically based on available space and user's ticket price/options.

I can already see the logistics and engineering nightmare of a flight devoid of seats having to bump an entire group of passengers because the next leg doesn't have enough inventory. Seats are fixed because bolts are easy. Once you get into the whole latches and levers business you compound your points of failure. Ever look under the last row of foldable seats in an SUV? A lot of engineering goes into securing 100kg…

Does speed really matter, though? I mean, the issue with cars is that they sometimes come to a very sudden stop, and in those situations the passengers need to be bolted to the ground. Planes don't often come to very sudden stops and when they do, bolts don't matter much.

The seats need to be secured, yes, but not in nearly the same fashion.

Re: Give them an inch and they take $773 million

#89

Post by mistercow »

zackzackzack wrote: post #48
mistercow wrote: post #42

I feel like saying "a single inch" like it's a pittance when we're talking about airplane legroom is a bit silly. Sure, it seems small compared to the other 31 inches, but that's not a fair comparison, because most of those 31 inches are non negotiable. Realistically, we're talking about at least a 5% reduction in leg room, and that's nothing to sneeze at.

You obviously are not above average in terms of height. I'm 6'5" and planes are a nightmare of cramps and bruised knees. A single inch can mean the difference between being able to sleep comfortably on a long flight and staying awake while stiffening up for eight hours.

I did say "at least".

Re: Give them an inch and they take $773 million

#90

Post by kunai »

yardie wrote: post #76
shabble wrote: post #60

Earlier quoted context omitted.

coming next, Responsive Seating! per-flight configurable seat modules, for exactly the number of people on board, and can be quickly loaded/unloaded to minimise excess weight. Installed seats adjust their clearance automatically based on available space and user's ticket price/options.

I can already see the logistics and engineering nightmare of a flight devoid of seats having to bump an entire group of passengers because the next leg doesn't have enough inventory. Seats are fixed because bolts are easy. Once you get into the whole latches and levers business you compound your points of failure. Ever look under the last row of foldable seats in an SUV? A lot of engineering goes into securing 100kg…

It's not quite that easy either. Seats on airliners must be "9G" after the September 11 disaster -- meaning that they have to survive 9G's of force. I doubt it would be possible to create seats that would stay in place with even 2Gs of force with latches.

Imagine Miracle on the Hudson. Seats may have flown out of their securements, due to the forces in excess of 2G. Or perhaps an emergency landing after an engine failure, which has the potential to be even more forceful. Gimli Glider, anyone?

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