Business Insider: Single statistic shows why all airline passengers not created equal
Oct 23, 2016, 10:46 pm
#1
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Business Insider: Single statistic shows why all airline passengers not created equal
This article from Business Insider discuss US carriers, but similar changes have been introduced at AC.
The premise is that 15% of clients, deliver 50% of the revenue, and that 85% of the clients fly fewer than once per year. Airlines are focusing on the 15%.
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13F
The premise is that 15% of clients, deliver 50% of the revenue, and that 85% of the clients fly fewer than once per year. Airlines are focusing on the 15%.
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13F
Oct 23, 2016, 10:56 pm
#2
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This has been discussed before in other forums
The 85% are likely to below yield flying on the cheapest fares. They contribute to overhead but not profit. Still if this 85% pax / 50% revenue go to another airline that's bad news (=loss) for the airline.
The 85% are likely to below yield flying on the cheapest fares. They contribute to overhead but not profit. Still if this 85% pax / 50% revenue go to another airline that's bad news (=loss) for the airline.
Oct 23, 2016, 11:05 pm
#3
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This article from Business Insider discuss US carriers, but similar changes have been introduced at AC.
The premise is that 15% of clients, deliver 50% of the revenue, and that 85% of the clients fly fewer than once per year. Airlines are focusing on the 15%.
--
13F
The premise is that 15% of clients, deliver 50% of the revenue, and that 85% of the clients fly fewer than once per year. Airlines are focusing on the 15%.
--
13F
Oct 23, 2016, 11:29 pm
#4
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For some FT members finally making the top 15% of a ranking is as good as it gets because alot of them were the type of person who was picked last in gym class.
AC must be a very egalatarian type of organization because , I as a member of the 15% segment. asm usually treated like the other 85%.
AC must be a very egalatarian type of organization because , I as a member of the 15% segment. asm usually treated like the other 85%.
Oct 24, 2016, 7:23 am
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Oct 24, 2016, 8:39 am
#8
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While there maybe parallels to Air Canada as the article itself fails to mention the airline I'll relocate this wider aviation discussion to the Travel New Forum for further discussion.
tcook052
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tcook052
Air Canada forum moderator
Oct 24, 2016, 9:05 am
#9
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Note that it really isn't 15% - 15% fly once per year or more. Once per year is a very low bar.
Airlines are probably focused on their top 1-2% of customers. AC has maybe 15,000 SE's and 75,000 Elites - but how many people have flown AC over the last 5 years - I'm assuming at least several million. Other airlines likely have similar ratios.
Airlines are probably focused on their top 1-2% of customers. AC has maybe 15,000 SE's and 75,000 Elites - but how many people have flown AC over the last 5 years - I'm assuming at least several million. Other airlines likely have similar ratios.
Last edited by The Lev; Oct 24, 2016 at 9:11 am
Oct 27, 2016, 7:45 am
#11
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Every industry gets 80% of its revenue from 20% of its customers, 60% of its revenue from 5% of its customers, more or less. That's true of airlines, of florists, of just about everything except (perhaps) barbershops/hairdressers.
Every intelligent manager knows this. Every intelligent manager wants to identify those top few percent and figure out how to keep them coming back. I don't think airlines trying to do that too is in any way weird or evil.
Besides, most of us here have figured out how benefit from that effort. After all, that's much of what FT is about.
Every intelligent manager knows this. Every intelligent manager wants to identify those top few percent and figure out how to keep them coming back. I don't think airlines trying to do that too is in any way weird or evil.
Besides, most of us here have figured out how benefit from that effort. After all, that's much of what FT is about.