FlyerTalk Forums - View Single Post - Has no F and smaller J cabins led to higher fares?
Old Apr 12, 2017, 1:16 am
  #7  
jsloan
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Originally Posted by fly747first
Every airline sets its own Pricing and Revenue Management policies. United hasn't had talented PRM staff for a while, so don't be surprised if they randomly implemented something that makes little to no sense.

Just last week: FLL EWR A319. UA did not sell a single F seat and the cabin was filled with 8 upgraders, yet UA kept raising the F rate as it got closer to departure. Coach left with many empty seats too and again, UA kept raising prices as it got closer to departure... which they could do if the plane was filling, but in this case it didn't.
It's a pretty big leap to go from an example or two to "United hasn't had talented PRM staff." There are several variables that RM has to take into account, and the total load factor is just one of them. UA certainly could have filled the plane if they had offered every seat for $1, and, in the short term, that can be a revenue-maximizing approach. However, not only is there an opportunity cost to selling a discount seat -- you reduce the inventory available for more expensive seats later, and you offer someone a lower price who may be willing to pay a higher one -- there's also a significant customer training disincentive.

Airlines are offering a product that is, in many cases, essentially a commodity, and their inventory expires. If UA were to adopt a policy of always reducing fares on close-in flights that haven't filled, they would destroy their ability to make money. Travelers would learn to play "chicken," waiting until the last possible moment to book. They'd run into a self-perpetuating cycle; the more passengers waited, the worse UA's load factors would get, so the more they'd discount, and the longer passengers would wait. Furthermore, business travelers, who tend to be less price-sensitive, wouldn't be charged a premium for last-minute bookings on these empty flights -- and it's that business travel premium that allows UA to offer discount economy fares in the first place.

In the long run, it makes much more sense for UA to allow an occasional flight to go out half-full than it does for them to cede leverage over pricing to the customer.

To the OP: to the extent that fares are higher, I think it has more to do with a strong economy and high demand than it does the elimination of F. After all, F got its FT reputation as "employee class" for a reason -- UA had trouble filling those seats with paying customers. Gauge reductions will have more of an impact -- the only plane in the fleet that comes close to the 64 J+F seats on the 744 is the 77W, with 60 -- and, of course, that's limited to SFO-HKG for the time being. So, if you're used to 744 routes, then that's absolutely going to be a factor.

I haven't noticed P fares being any higher than usual, but I also haven't seen a lot of sales, and I mostly fly TPAC, not TATL.

As for R availability -- there is definitely a general feeling that it's harder to find R than it has been in years past. I think this goes back to RM getting better at selling the fares, and the strong economy providing customers to buy them.

Originally Posted by skycrab
It's genuinely silly prices - £4000 ($4800) for a P class fare LHR-LAS (example).
This was always a £2800 or less fare last year.
Are you comparing the same season? Keep in mind the difference in the £/$ rate since this time last year. If the UA fares are denominated in pounds, they may well have re-filed them.

Last edited by jsloan; Apr 12, 2017 at 1:19 am Reason: Added response to additional post
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