Originally Posted by
adam.smith
PLeblond, I see where you're coming from with your point about diminishing marginal utility, but I see this a little bit differently. If Dorian is flying mainly in paid J, presumably he's still a profitable customer. AC is definitely not selling 100% of its business class seats, so it's not as though they can turn around sell every seat he doesn't take to someone else. AC is willing to pay a fair amount (by providing SE benefits) for his first 100K AQM of business. So why would they be willing to pay so little for his next 100K+ AQM of business?
There in lies (my latest) question. In order to corral the added business, AC needs to invent a layer above SE. And not just an extra tier, but one geared towards the profitable extra-SE flyer.
So the question is two fold:
a) how much does that extra tier cost to develop, market and maintain? How many extra perks need to be put for the Dorians of this world to continue spending? Especially given that the Dorians of this world or on the brink of choosing airlines with a true F class, or even, private aviation. AC is not an EK, nor do I believe they can (profitably) be. I do not reasonably believe AC can support a true F cabin. Wouldn't dorian eventually get blasé-ed from QR/EK J and wish to move up to their F offerings?
b) Are their enough Dorians to warrant such a level of service, however it would eventually be offered? Does the market AC cover have enough potential Dorians to justify this tier? In the end, is asking AC to provide for this level of customer akin to asking a top notch national restaurant chain to offer 2 Michelin star dishes? One cannot ask a tomato to be a kiwi....
I'm truly fascinated by this discussion. There will always be customers who surpass what a business can offer. Where is that line?