Originally Posted by
terencelai
LOL, not 100%, but 0% for sure for March 2025. You have a creative idea, but unfortunately this will not happen this quick. Route managers, Inventory management, pricing analysts all need to come to a conclusion that by unbundling the premium fares will not let AC lose market share, being competitive and the key word " profitable ". The reporting analysis takes at least one year to run, why? There is no way AC will unbundle the premium fares on the seasonal basis, at least for now, so really have no clue why you come up an idea this will take place in March or even anytime in 2025.
What is to say they haven’t been analysing this for a while now and its ready to implement? I didn’t invent this theory; it’s been around for a while in the industry. Surly someone at AC has this on their radar.
I’m also not suggesting it would be implemented seasonally. Once it’s in, it’s in for the long haul and will expand.
The tea leaves in the market have been suggesting a softening in demand for a while now. US domestic demand is down, and the US airlines have been reducing capacity for many months now (on top of Spirit that will cause a reduction in capacity and Jet Blue cutting dozens of routes. For International travel…You don’t add a bunch of new international routes if you are having trouble filling current routes especially in the face of metal delivery delays. Revenge travel is falling, and business travel has not picked up accordingly.
Unbundling premium leads to more revenue as it entices people buying lower cabins to buy a more premium one and could pull passengers off a competitor’s route. Plus, the inevitable ancillary revenue goes directly through the gross margin.
If premium cabin demand is strong as is, then AC won’t implement anything, that is obvious. Given the current economic figures I am reading, I’m not bullish on demand this year so I believe it will start in 2025 – likely charging for seats in PY like LH does as a first setp. Even if it doesn’t happen in 2025, I would wager it will in 2026. Too much upside for the airline not to do it.