Originally Posted by
Boten
That is actually what I am saying in scenario 2. They will not sell as many discount seats as before therefore the price increases but they would only need to do that if the cabin becomes constrained. If the cabin is not constrained then they cannot charge more than they did before, on average. I am referring to J prices only since that was the OPs question.
Yes but the thing is - and that is probably the reason why both
Sixth Freedom and myself have picked on it - is that there is not that much uncertainty in what is happening: we know the planes are staying the same and we know the seats are staying the same, so it is in effect a zero sum game between gaining some Y seats when you lose some J ones (here I am assuming that W remains constant but even if it doesn't it does not change the principle).
And indeed, we know that load factors are high so there is no doubt that availability reduction will lead to a reduction in seats available for upgrades and cheap buckets (your "B" scenario except that we are already in the A scenario in that seats are not really unsold as of now).