Originally Posted by
beckoa
So how much service is required to sustain a BR presence? Both OGG and SJC have seen increases to flights to those destinations and neither have a lounge available for use by a partner. Do they meet the requirements or is there not enough revenue there justify it?
Don't get me wrong, I love lounges, I have had a membership 2 years running now (since i started flying basically), but I can't even come up with a good reason as to why an airline would even want to own and operate a lounge in the first place. Nobody flies paid first class. Even if a subset of those will actually visit a lounge and wouldn't have bought the ticket otherwise, that couldn't possibly be paying the bills. Charging $275 a year, and assuming every MVP Gold bought a lounge membership, you have a paltry $13M-$15M/year in gross revenue. No idea how to guess daypass revenue. It seems like with rent, alcohol, food, partner lounge payouts, etc. maybe you could make a little bit of money.
Maybe simply having a Board Room attracts high end customers to the airline and for people to join memberships that they wont really end up using during time constraints. It seems also that putting a BR at the end of a spoke (where people aren't having to sit around, waiting for a connection) frequented by casual vacationers would also be of little financial benefit.
It seems that another purpose would be to bill out when a partner airline customer visits, and set up camp in some place where those partners would be compelled to visit (and wouldn't be in violation of whatever agreements were signed), and watch some revenue trickle in. An airline would want to probably setup agreements with international carriers that do not have a very strong presence in that particular BR city.
If I had to guess how an airline would decide using a partner lounge vs. O&O board room, I think it would be (forecasted) costs for the partner lounge exceeding the costs of operating a board room for many years running, also be in a location where someone would be most likely to want/use it (ie, mid-connection), and/or frequented by business travelers that need a quiet oasis of food/internet/telephone/fax/etc. Then it would make sense to lease expensive airport space, pay whatever million(s) for improvements, hire on experienced and friendly employees, and cover whatever other operating costs there are.
I really doubt OGG would be on the list (Last time I was there, Alaska was still contracting a lot out for airport services to United/etc), but SJC .. maybe.. i'd imagine if there was a partner lounge already there, that would be the natural first step.