FlyerTalk Forums - View Single Post - New BA policy re allocation of A inventory?
Old Sep 17, 2006 | 9:38 am
  #9  
G-BOAC
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Originally Posted by JohnAx
"Why would BA do that?"
"Ethnic groups?! I daren't touch that one

I think it's all down to revenue management and simple market economics of price discrimination. In this case, one way to segment markets is by POS. For example, LHR-JFK is hugely competitive and very busy. The sale of an A class fare to a person in London when they'd be otherwise prepared to pay F is not clever...but to persuade a person based in CDG to fly CDG-LHR-JFK on BA instead of AF CDG-JFK direct it may be necessary to make A class available to them instead of F. There is presumably some fine balancing point where it's better for BA to sell only F ex-LON but F and A ex-CDG to maximize revenue (i.e. where it's better for them to fill the seats with the ex-CDG customer on an A class vs. an ex-LON customer on an A class who would have paid F). That may not be the best of examples given the EU rules these days on cross-border sales intra-EU. But in principle, I guess that's how it works. Perhaps substitute CAI for CDG instead or somewhere like that.

Or maybe it's the case that ex-CDG, only A class pricing will ever really prevail but if you have A wide open ex-LON then people get too used to it and will refuse to consider F fares over time, prefering to go for lower-cost J if they can't get A?

Revenue management is a complex beast!
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