JetBlue TrueBlue - Pricing, I don't get it.

JFK -> LAS

I have a friend who loves B6, as I have stated before I love cheap prices. I was willing yet again to fork over some extra green to fly with other other people in the party. But TWICE THE PRICE of USAir? I don't think so. Yes, I know we could save money by taking the 6:50 AM flight out and a later or earlier flick back but it's not as convenient. Even searching for the least expensive times of the day they are still more.

JFK -> LAX (LGB for B6)

Had a situation that I had to resolve for somebody today. Last minute ticket purchase, literally purchased for them as they were driving to JFK today. Put them on Delta for $200 less then B6

Am I just looking at popular times / routes for B6 and getting hit with this? I don't get it; now, an occasional higher price I get. But for 2007 they are 0 for 5 trips.

-Dave

I've seen this with Southwest Airlines as well. Here's my theory for WN, and it might apply to B6.

I believe that WN is better at yield management, extracting peak prices for peak flights that are bound to sell out. Legacy carriers tend to offer deep discounts to some degree on all flights, including those that would sell out at higher prices. Some of this is due to the (until recently) relaxed standby policies at legacy carriers, under which you could purchase a cheap off-peak ticket and standby for a peak flight at no additional cost.

You might be seeing this effect, in which case you should take advantage of the relative generosity of legacy carriers. Travelers should be glad that different airlines work differently, because it enables us to choose the one that best fits a particular trip.

Not sure if its just a lot of NYC-based high rollers traveling to LAS but for some odd reason this flight is always packed--always, no matter the time. B6 could easily add another 1 or 2 nonstops on Fridays and Sunday and make a killing.

It stinks for us though because I've yet to find this route price for less than $400 RT....You basically have to buy seats really early along to snag the decent prices.

You basically have to buy seats really early along to snag the decent prices.

People get upset at WN because they don't offer deep discounts on flights like this, even when the schedule first opens. That's what I mean by aggressive yield management: zeroing out the discount seats rather than merely reducing their number somewhat.

I believe that WN is better at yield management, extracting peak prices for peak flights that are bound to sell out. Legacy carriers tend to offer deep discounts to some degree on all flights, including those that would sell out at higher prices. Some of this is due to the (until recently) relaxed standby policies at legacy carriers, under which you could purchase a cheap off-peak ticket and standby for a peak flight at no additional cost.


If B6 does not overbook flights then 2hrs before there was at least 1 seat open. In my mind you would want a person in that seat. So at the last minute the price should drop like a stone. Lets face it unless somebody was in line at the airport, CC in hand that seat more then likely was still empty when the flight took off.

Looking through my records I took B6 6 times in 2002, 4 times in 2003, 5 times in 2004, 4 times in 2005, 1 time in 2006 and so far 0 for 2007. As somebody who does not care about service as much as cost in my mind this is a sure sign of price creep.

-Dave

If B6 does not overbook flights then 2hrs before there was at least 1 seat open. In my mind you would want a person in that seat. So at the last minute the price should drop like a stone.

Game theory says that you have to take the reasoning further. Suppose that you, the passenger, know this. Then you refrain from buying the high fare so that you can pick up the last-minute bargain fare. Then the airline loses money by discounting that last seat.

This same reasoning explains Southwest's unconventional standby policy. Decisions on policy need to anticipate behavioral changes that the new policy will trigger.

Game theory says that you have to take the reasoning further. Suppose that you, the passenger, know this. Then you refrain from buying the high fare so that you can pick up the last-minute bargain fare. Then the airline loses money by discounting that last seat.


Absolutely true. In my mind however, there has to be a point where you do say screw it lets just sell the seat. Be it 30 minutes out or 120 out is a decision that the airline has to make. Yes there will always be the people who try to abuse that. But after getting stuck at the airport a few times because somebody hit the enter key on their laptop faster I would think that it would not be much fun.

To any B6 employee out there, can you see how many empty seats that were empty on the 11:30 JFK->LGB yesterday and post it? Just curious, not that important. My very tired coworker that just got back said the DL flight he was on was fairly full but not 100%

-Dave

Absolutely last-minute purchases carry a "value" most of the time. If someone absolutely 100% needs to get on that flight a few hours before, the airline puts a value on that need for convenience. Sure, it's better for the seat to go out full - and yes, sometimes the fare does go down last second, but it's all about putting a value on that seat at the last second.

I get an e-mail from Continental every couple of weeks or so for last minute get-a-way fares. Its usually EWR-ORF, MCI, PWM, etc. It usually for travel for the fallowing weekend and its for $99, 149, or 199 depending on the destination. The e-mails have the destination at random (seemily). My questions: 1) Does anyone else who is a one pass member get these? 2) Would JetBlue find this benefitial? I think so.

One dirty little secret of yield management (and pricing in general across most industries) is that you can intentionally construct hurdles to sort out your customer base. Customers who will switch for a dime will clear every one of those hurdles to get the lowest price. Customers who don't care very much about price will take the easy path and pay more.

Semi-secret sales are one of these hurdles. They provide the best price to diligent shoppers, while allowing prices to be increased for the non-diligent. Southwest has an extreme version of this technique called Ding, offering sales that typically last only 6 hours. Apparently they believe it works for them, generating more extra revenue than it costs to operate.

Will JetBlue offer targeted specials by email or otherwise in the future? They'd be foolish not to.

For an airline that has had more than its share of bad publicity in the past couple of months their fare structures are indeed confusing. I need to travel IAD/LAX (LGB) in late June. Over the past ten days I have watched B6 fares rise steadily to the point where the cheapest RT fare on my travel dates is now $815. During this same time AA has held steady at $425 and UA has actually come down from around $490 and now matches AA at $425.

I truly enjoy flying B6, but not at nearly twice the price of the two legacy carriers, who offer more flight choices, interline agreements, etc. For $200 I can even buy my way up to E+ on UA for a full year and have nearly the same legroom as B6. For me, at least, it is a no-brainer.

I truly enjoy flying B6, but not at nearly twice the price of the two legacy carriers, who offer more flight choices, interline agreements, etc. For $200 I can even buy my way up to E+ on UA for a full year and have nearly the same legroom as B6. For me, at least, it is a no-brainer.

People post similar situations all the time on the Southwest forum. I contend that WN and B6 have a better handle on market value of seats at peak times than do the legacy carries. Certainly, somebody is off the mark in these situations of large price disparity.

The days of simply going to an LCC website and buying a ticket with full confidence that it's the best deal are long over. That's one way in which LCCs continue to move toward the legacies, even as the legacies change to become more like LCCs.

If B6 does not overbook flights then 2hrs before there was at least 1 seat open. In my mind you would want a person in that seat. So at the last minute the price should drop like a stone. Lets face it unless somebody was in line at the airport, CC in hand that seat more then likely was still empty when the flight took off.

You don't necessarily want a person in that seat if it gets to a point of where x people are waiting for that hot price. If too many people know that hot price is coming, it may be better to have the 14 people pay a higher price and let 1 seat go empty than have 15 people pay a lower price.

The difference between filling up planes and maximizing revenue is the balancing act of managing RASM and load factors. Its best to have them both growing.

You don't necessarily want a person in that seat if it gets to a point of where x people are waiting for that hot price. If too many people know that hot price is coming, it may be better to have the 14 people pay a higher price and let 1 seat go empty than have 15 people pay a lower price.

Agreed, but only to a point. We are assuming that there is only 1 seat open. What if there were 5 or 25? ALMOST EVERY flight I looked at from JFK to LAX (and area) had seats for sale. MOST (all? don't remember stopped checking after DL had space) were less then B6. I am just feeling that their yield management system is funky. Once again just my view from my own limited use of the airline.

I like Jet Blue. I like cheap prices, to me flying is a necessary evil to go on vacation and work. If I could snap my fingers and be wherever I was going I would be happy regardless of the price. But since I can't I'll get the best price I can.

-Dave

Agreed, but only to a point. We are assuming that there is only 1 seat open. What if there were 5 or 25?

Very similar equation: if last minute down pricing is available, how many people will wait and how much money will be lost to those last minute pax buying cheap fares versus how many additional seats are available and how much will those seats bring in?

Currently B6 believes the number of additional last minute fliers does not warrant cutting the price of not just those last minute travellers but certainly some of the other pax as well that are now buying further in advance.

Keep in mind, most people plan air travel fairly far in advance, more so with B6 since B6 has a higher percentage of leisure travellers than most other carriers in the US. The number of additional seats B6 would sell for last minute travel probably isn't that high. Couple that with pax now waiting to take advantage of these last minute deals, its probably tough to break even much less be better off.

If you're truly flexible with carriers and to time of day, don't forget about http://www.priceline.com http://www.kayak.com and http://www.hotwire.com . They can often help with getting you a last minute deal albeit some sites do so without the benefits of regular fares: standby travel, points, etc.

Very similar equation: if last minute down pricing is available, how many people will wait and how much money will be lost to those last minute pax buying cheap fares versus how many additional seats are available and how much will those seats bring in?

Currently B6 believes the number of additional last minute fliers does not warrant cutting the price of not just those last minute travellers but certainly some of the other pax as well that are now buying further in advance.

Keep in mind, most people plan air travel fairly far in advance, more so with B6 since B6 has a higher percentage of leisure travellers than most other carriers in the US. The number of additional seats B6 would sell for last minute travel probably isn't that high. Couple that with pax now waiting to take advantage of these last minute deals, its probably tough to break even much less be better off.


Playing devils advocate here for a second. Then why raise the pricing at the 21 day / 14 day / 7 day mark at all? Just base it on yield / capacity and such.

I have to agree with nsx with the LCC vs. legacies thing here. In all fairness to B6 I just looked for JFK -> LAX for out today and return tomorrow. Round numbers:

B6 $800
DL $800
UA $1475
UsAir $660 but not non stop. All NS are sold out
AA:$800

So it's not always a major price difference.

I have used priceline and such, when it's just me it's easier. When you have more people it can be a PITA to deal with that kind of ticketing.

-Dave

Playing devils advocate here for a second. Then why raise the pricing at the 21 day / 14 day / 7 day mark at all? Just base it on yield / capacity and such.

Depending on the route or carrier, its not always 7/14/21 days. But those are easy cutoff points for fare rules. I believe JFK-SMF (or JFK-SJC) has a 7 day advance purchase while JFK-OAK doesn't; presumably due to more demand to OAK.

Also, all carriers (including B6) will play with inventory levels so that even if a fare is published, inventory is zeroed out so that certain fares are effectively invalid. With that in mind, airlines are already playing outside of the 7/14/21 day marks.

B6 has recently become a good example of this. The low priced seats are not automatically offered when the schedule opens up like they used to do.

I have to agree with nsx with the LCC vs. legacies thing here. In all fairness to B6 I just looked for JFK -> LAX for out today and return tomorrow. Round numbers:

B6 $800
DL $800
UA $1475
UsAir $660 but not non stop. All NS are sold out
AA:$800

So it's not always a major price difference.

B6 wouldn't have you believe that though! Check out http://www.jetblue.com/about/corptravel/about_corpAveFares.html . They continue to give the impression that they are lower than legacies, when there are many, many times when they are not. Very misleading if you ask me.