Originally Posted by
J.Edward
Also remember that if revenue management is doing their job the lost seats should be from the lower buckets, not the full fares.
In practice UA might not always trim from the bottom of the fare spectrum, but I suspect they're good enough to keep the loss of seats away from affecting the higher end of fares.
Well, as much as I like to give CO Revenue Mgmt a hard time, it is true that the "last seats" are the money seats.
You don't discount the last seats for business travelers with no flexibility. You just can't.
But, of course, there is more to it than that. And the fact is no configuration is set in stone.
The funniest thing to me is that whenever anyone brings up E+, the example that is immediately trotted out is the decade-old failure of AA's MRTC.
Without getting into any unnecessary detail about that, I suggest a closer look at B6. After they reduced their density (fairly considerably) they improved their profitability. The success of B6 in this regard is a significant blow to the oft-used canard that airline travel is nothing but a pure commodity and nobody cares about anything but price.
B6 is virtually never the cheapest out of NYC, is flown primarily by presumably unsavvy kettles, and yet flies at an LF virtually copmarable to CO's (without, I might add, ever overselling any flights, which is impressive).
So this tells us that, in this age of the internet, of easy information, of greater, more widespread sophistication deeper throughout the travel ranks, people do not necessarily treat travel as a pure commodity.
Of course, those who continue to advance that argument are usually those whose product is little more than a pure commodity.
Given them the minimum, and your customers will only give you their minimum in return.
When will CO learn that there are never any winners in the race to the bottom?