<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by StuMcIlwain:
Here's an example of how yields work.
Suppose you have 400 people who want to go to LHR. 200 of them are willing to pay anything up to $1000 for their ticket. The other 200 will only pay up to $500 for their ticket; they will stay home if the prices are any higher. If AC offered seats at $500 each, all 400 people would buy them. AC would almost fill a 747 and they would get 400 x $500 = $200000 in revenue. But if they flew a 767 and offered seats at $1000 each, they would still get 200 x $1000 = $200000 in revenue and almost fill the 767. The 767 is much cheaper to operate, so AC would be better off with this option.</font>
Ah...yes but what if AC could offer superior service/ammenties etc to the competition and could sell all 400 seats @ $1K = $400K in revenue?
