<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by FCfree:
I'm not sure I understand how yield management precludes Load Factor Dynamic Rebalancing (I love that name!).
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They are one and the same.
There are two ways to manage the load factor:
1) re-schedule aircraft and crew all the time
2) adjust the fares
When you see an aircraft flying with few people, you can bet that re-scheduling is not going to help, because the aircraft will be needed down the line anyway, either to carry more passengers or for maintenance.
Let me give you three examples (happens to be on Delta, but all the airlines are basically the same in this respect).
1) A 757 flying LGA to CVG at 5:30 PM on a Wednesday. You would think the plane would be packed, but it's less than half full. Substituting it for a RJ or 737-200 won't work because that plane continues to LAX.
2) An MD-90 flying DFW to MSY at 7:00 AM. Not too many people on this flight. I took the "continuing" flight (same plane, different flight number) to CVG and it was full from MSY to CVG. There would have been no point in downgauging the DFW-MSY flight.
3) A 757 flying CVG to LGA late at night. Only 33 people on board! No continuing flight that night, but the plane is needed somewhere the next morning, such as ATL.
So, what it boils down to is that airlines already schedule aircraft as efficiently as possible within the constraints of the hub-and-spoke system. There is no point in constantly looking for flights to downgauge because the plane of that size will be needed later on.
When airlines see a particular route that has too many seats, they downguage for the next schedule (e.g., 757 to 737). Other routes that could use more seats get the larger plane.
You don't need to do this every single day, because the frequency with which airlines change aircraft types on a routing does not change that often.