Originally Posted by
jsloan
It has nothing to do with demographics. If it were realistic, their goal would be to sell 100% of the plane as Y and F fares. They don’t offer discount fares out of some need to target different demographics; they do it because there aren’t enough passengers willing to pay full-fare.
That's exactly why they target demographics, because there aren't enough pax willing to pay full-fare. One demographic they are now targeting that they didn't before is people who don't need a bag, don't care what seat they're in, and don't care about status or points. Those people now pay less and you now pay more. More people pay more so UA makes $1b in extra revenue (according to Kirby).
If there were enough people to pay full fare, they wouldn't offer discounts for buying early; for buying lower inventory buckets; for staying a Saturday night; for flying early or late in the day; etc. BE is extremely similar in structure to things airlines have always done to segment their market. Segment the market within a cabin and charge them different prices.
I wish FlyerTalk were old enough that we could see what people said when airlines started offering discounts for staying Saturday night. I'm sure everyone would have been up in arms! "This is a bait and switch! As soon as you they rope you in with the discounted fare you see that it requires a Saturday night and then you buy up!"