Originally Posted by
FrancisA
In other words lower J demand does not necessarily mean that there is greater Y demand. Are there many who down trade from J to Y (not to W) on LH routes?
It is also necessary to understand the nature of the routes - I presume these are BA's Caribbean routes, as that is the majority of LH business ex-LGW. These are heavily leisure orientated.
I think that your second paragraph answers your first. Nobody has claimed that the link between the two cabin demands is causal, but pragmatically, it so happens that some routes, some seasons, etc are more business or more leisure oriented.
Think about AF's new arrangement with their BEST cabins. They have introduced flexible cabin sizes which (sadly) allow them to withdraw J seats and replace by more Y seats for several routes during the peak summer season. It is not in any way because increase in Y demand "causes" the decrease in J demand or vice-versa, but simply because peak summer season happens to be a period when business travel is quite a lot weaker than usual and leisure travel quite a lot higher. Conversely, AF also use permanently high-Y planes to leisure destinations (notably in the Carribean, Mauritius, etc) and of course, BA already has different versions of the 744 for different routes. This is just another variation of the same here.
Originally Posted by
FrancisA
If you take out J seats, you are unlikely to get full fare Y sales. So at best you will be replacing unsold J seats with discounted Y seats, but you may also loose the potential to sell a discounted J seat.
Assuming discounted J = £900 and you gain 3x Y seats, you need to generate 3 extra Y sales at £300 or more to make up from loss of a J sale. If you are sure you can do this, then fine; but it would seem to me harder to shift seats at the bottom of the market where competition is more fierce, and the consumer more price sensitive and less brand loyal.
Yes, but let's assume that one J seat takes the space of two Y seats, and let's imagine that one way J fares are at £2000 (full fare), £1600, £1200, and £800, (let's say the unit cost is 750) and Y fares are at £1000 (full fare), £800, £600, and £400 (let's say the unit cost is £375). In peak season, you might find it easier to find additional people willing to pay £600 in Y than, say, £1200 in J (to compare the second lowest level) and that would mean that you need to sell fewer seats on which you make a 6% margin in favour of more seats on which you have a significantly higher margin.
Now to clarify, I personally hate this change as I'd much rather BA offered more redemption and discounted J seats but I am not entirely surprised that on such leisure-heavy routes as the LGW network they are choosing to emphasise Y more.