Originally Posted by
jsloan
Fine, but in the real world, people will book away, and UA absolutely must replace those passengers with incremental revenue elsewhere. If your statement is, "all things being equal, higher prices generate more revenue," that's fine -- but all things are not equal.
Of course UA will see a loss of demand if their prices are raised in a competitive environment. It's economics 101. But that's not what was being analyzed.
Originally Posted by
jsloan
If this analysis were true, ULCCs would go out of business immediately. Their entire business strategy is to entice people with low fares and then make their money on ancillary revenue. People are simply more willing to spend $100 twice than $200 once. Study after study has proven it, and the fact that the ULCCs are still in business confirms it.
Just because you're not seeing E+ full on your flights doesn't mean it's not full on others. It also doesn't mean that the customers currently seated in E- aren't going to be willing to do a last-minute buy-up when they realize how lousy their seat will be -- perhaps even a TOD all the way to F.
You're selling the consumer short. Your analysis means that the ULCCs are depending on people being unwise and not calculating the entire perceived value. ULCCs are advancing because of low costs, not a revenue advantage because consumers are generally unwise (they actually run at a revenue disadvantage).
Ask any UA traveler. If the plane isn't 100% full, which cabin is most likely to have empty seats? It's not based on my observations. It's based on the aggregate observations, and it's backed up by UA's own actions (shrinking E+ cabins). Again, the same customers trying to save a few bucks with BE will be the least likely to upgrade to E+ or even all the way to F.
Originally Posted by
spin88
I say again, I have yet to ever run into a BE fare on DL, even for family trips. I know it is out there, I just don't run into it.
Really? How you can you
NOT run into an E fare, especially with family trips? If true, that tells us you are in a very rare situation. And if you never have to deal with DL's E fare, then clearly your opinions are susceptible to selection bias against UA and for DL.
Originally Posted by
zeer0
Here's the thing, it's very very rarely $10 or even $20 RT. Far more often it's $40 on flights under ~$300 and $80 on flights more than that. You're looking at an upsell of up to 40% on short distance flights, and that's beyond just superly price sensitive customers not buying up or saying no to UA all together.
The buy-up prices I used were one-way.