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Thread: 787 value
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Old Jun 28, 2005 | 5:19 pm
  #5  
bigred93
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Join Date: Sep 2004
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Originally Posted by andrzej
Why not also assume that the ticket price will be the same?

What makes you think it will be more expensive to fly on a 787?
Well in this age of revenue and yield management, the 'same' ticket price doesn't always mean that under the hood the profits are the same... it's a bit oversimplified, but roughly speaking the last seat on a plane generally doesn't go for the rock-bottom discount rate (with exceptions of course). A plane going out with a higher load factor will be more profitable not just because the plane is full, but because there will be a larger number of people paying higher prices for tickets on that flight - even if the bottom line discount fare dollar number is the same. So, I'm wondering how much the percieved technical advantage to the Boeing plane is real or not from a business point of view. If the 787 is more expensive than the 350 (probably is, the rumors are that Boeing is not as willing to discount as Airbus) but a more comfortable plane will bring more customers (even if some of them pay higher rates through yield management) then it's a good deal for the carrier, and a win for Boeing. If not, then all this R&D on bigger windows and so on is a waste.

This is similar to the whole LCC thing. People *say* they want to be treated like people, but then if WN is $4 cheaper on a route they'll join the cattle call. I'm trying to figure out if Boeing is on to something here - in which case there will be a few people saying yeah, that's worth it to me, if you can make me feel less jetlagged when I get to London, that's worth an extra 10% or 20%. Hope that makes sense.
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