Originally Posted by
minnyfly
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).
You're giving the consumer too much credit. ("Nobody ever went broke underestimating the intelligence of the American public"). The ULCCs acknowledge as much:
https://www.fastcompany.com/1325762/...itable-airline
The advantage of this pricing structure is psychological. “We collect $110 from you at the end of your trip,” Gallagher says. “If I tried to charge you $110 up front, you wouldn’t pay it. But if I sell you a $75 ticket and you self-select the rest, you will.”
Originally Posted by
minnyfly
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.
You have invented "the same customers trying to save a few bucks with BE." It's emphatically
not a "few" bucks -- percentage-wise, it's a huge surcharge in many cases. And very, very few people were doing anything except selecting the lowest fare available at booking. Unless there's a specific advantage to be gained, why? I've never met anybody who buys a non-refundable Q fare when a G is available because they're opposed to paying so little for airfare.
If UA doesn't want customers at $49 fares, don't offer $49 fares. Offering a $49 product that is a negative, stressful experience, and then offering to alleviate the stress for $89 instead is offensive and cheapens their brand. Just offer the fare at $89 and see who's interested. I don't care what G4's prices are, because I never intend to fly them.
If you believe that a seat assignment is worth $40 one way, that's your business, and UA will love you. I get E+ and a decent upgrade percentage, and I'm still not certain it's worth $40 one way. UA's saving graces are (a) I don't have elite status with other airlines, (b) I have no intention of meeting DL's Diamond spend requirement, and (c) AA and AS are weak in the areas I fly.