Muchachos I cannot understand why the economic modeling and simulation here is being conducted using such simplicity when revenue and cost components cannot be broken out of the system independently in this way. Many are covariant.

Overall, in snapshot for this day, airline does not make money on many individual Y pax. Airline makes some money on individual J pax. Buut... there are certain fixed costs and many semifixed costs. Airline flys 772 to LHR. Economy is good load factor is 95 percent. OK. But then demand falls, now 100 less Y pax but same of J. Cannot profit overall on 772. Next month, sub 763. Loss of numerous seats plus, increase in CASM for ALL SEATS because of less efficiency 763 vs 772.

Example Y paxs who fly 772 on UA4. Today only 100, so each pax accounts for "cost" because this specific flight is not revenue-positive or neutral. Divide loss for flight by pax numbers. All paxs "unprofitable" today. But tomorrow, 225 in Y. Strong per-flight profit. All paxs deliver per-pax profit even in snapshot. Buut, if 1 extra pax flys today i.e. 101 instead of 100 then the company revenue delta is positive it is the price of her ticket minus marginal cost of carriage which is very low for this case, 772 with +1 pax. Model 1: she reduced the LOSS of this flight by (individual marginal revenue-marginal cost) probably several hundred $ on this Y ticket especially if walk-up Y or B. But she - like all other paxs including J on this flight - is revenue-negative with respect to the specific flight. So we can think (Model 1) that her loss-reducing capacity = 00s of$$ but at the same moment her revenue is measured as -45$ using the simplistic metric of net profit per pax for the flight (Model 2). If she does not fly, model 1 says, company loses $500. Model 2 says, company "saves" $45!!!

The fact that UA can buy, lease and operate large and expensive frames like 772/773 with very low CASM for high load factors is exactly because they sell hundreds of Y seats on all flights. The fact that UA operates 772 on UA4 both today and tomorrow is because of the need to plan in this way. Y pax numbers over time allow the provision of nice 772 on this route.

We know well the ultimate logical extension of the fractional or component passenger costing model does not work. Finally 100percent business class seating should eliminate all loss because all J paxs make per-pax profit and using this (100 percent J fleetwide) as our management and economic philosophy maximizes all individual flight profit at all times?! Correct?! But no! Airlines with 100percent business class and limited airframe substitution capacity have a poor longterm solvency record even with good product e.g. Silver, Max.

So if you do not believe then por favor try it yourself, become the airline entrepreneur and lease this nice 772 OK now remove Y and install with 120 J only Polaris at $3k per return and see how you can make money... I think even with your slot LHR to EWR or LAX you lasts one week before BK, LOL! I will put this same concept in another way by looking at the behavior of airline. UA does not return leased 772 because of one unprofitable flight - like today's UA4, LOL!!

This is why revenue-optimization strategies that work are based on the principle that both J and Y paxs are necessary. It is also more effective when airline possesses variety of airframes to allocate dynamically as well as product strategies to upfeed Y to J with upsell mechanisms etc. This philosophy of operation is like the robustness delivered by higher genetic diversity but applied in the world of airline economics. Systematically this approach generates stronger long-term results than specific optimization for one class of service, revenue analysis based on single flight snapshots etc even if at any one moment it does not appear so.

Observed behaviors and both success and failure outcomes in this sector corroborate the principle even if paxs are not privy to specific cost and revenue data and models.

Buut if you do not believe and want to buy such 772, then por favor offer me Polaris service mas barato I will try first! LOL!