Originally Posted by
Boten
Based on Revenue Management theory:
If an airline has 100 seats and only ever sells 75 seats at, on average, £100 then by reducing the number of available seats to 80 does not mean that the market is prepared, on average, to pay £110 for those seats and therefore the prices remain as they were.
However if they reduce the number of seats to 50 then the airline should remove the 25 seats of the lowest fares normally bought in order to optimise revenue.
It is a bit more complicated than that in practice though.
On unconstrained flights there will be no difference because the seats would otherwise be unsold. And on heavily constrained flights there will be no difference either because no seats would ever be released in the lower fare classes. But there will be some flights, most likely during the school holidays, when I class fares would previously have been available but will now not be.
Originally Posted by
bafan
Presumably they are reducing the number of CW seats because they aren't being sold (otherwise why would they want to lose the extra revenue generated by CW seats)...
Therefore prices should stay the same, or even fall slightly.
Mmm....
It does depend on the yields though.
CW pitch is 72" and WT pitch is 31" so three rows (24 seats) of CW (216") occupies the same space as 7 rows (63 seats) of WT (217"). If BA can sell the last 24 CW seats at GBP 500 each in I class for GBP 12k revenue and the last 63 seats in WT at GBP 250 each for GBP 15.75k revenue it can make sense (subject to refitting costs) to increase density.