Originally Posted by
FlyerWx
I remember on the first day of my college intro to econ class, the professor gave a very similar example.
From what I recall, there are definitely short-term vs long-term economic implications. If, at the gate, DL thinks on the margin, they should sell the ticket at a price above the cost of extra food, extra fuel, etc that a D1 seat requires. However, as has been mentioned, they can't keep doing this, or else it would significantly decrease longer-term profits.
Oh, and there's the non-monetary cost of an unhappy non-rev
What is the extra cost of D1 anyway? Seems like it would be pretty small. Crew gets paid the same; person was already on the plane in Y, so no extra fuel; drinks are free in Y too; I assume they cater enough food for the whole J cabin and discard leftovers, so no food costs.
As for giving seats to non-revs, I agree there's an intangible benefit. It's a benefit that probably keeps some employees happy and makes them more likely to stay with DL, just like F upgrades keep some medallions flying on DL. That said, I do think they need to find a mechanism to fill the seats if there are any left after non-revs clear. Either go to medallions after the non-revs (make a DM happy and more likely to buy DL for future intl) or use some kind of FCM.
I understand the argument about FCM cheapening the product, but if it's done only after all non-rev upgrades clear (which seems unlikely on most flights), I don't think that it would. If your vacation/work budget is large enough to afford the $4k fare difference between Y and J, are you really going to roll the dice on a < 5% chance you can buy Y and FCM into J? OTOH, I'm absolutely *not* going to pay the extra $4k up front, but I might consider a $500 FCM offer.