Originally Posted by
coairtul
Q. It seems like we’re losing customers who
want lie-flat seats in BusinessFirst. When can
we introduce these?
A. Customers want lie-flat seats. The problem is that
they don’t want to pay a penny more for them. If we
take some seats out of BusinessFirst to make room
for fewer seats to lie flat, we’d have to charge more
for that smaller number of seats just to break even.
Some of our competitors have recently introduced a
lie-flat product at the expense of business class seats
and revenue. We are looking at a new seat for
BusinessFirst that dramatically improves sleeping
comfort without sacrificing the number of seats.
We’re still getting feedback from co-workers and
customers to help us make a good decision. When
we have something that we can actually show to customers,
we’ll announce our plans.
A couple of observations.
While everything you write is, prima facie, accurate, CO BF does not exist in a vacuum.
Just as AA was forced to shift to its (admittedly unimpressive) NGBC to keep from slipping, CO is finding itself in a defensive position.
How much longer can its 90's J retain market share? At what point does CO suffer mass defections of customers who can get a full true lie-flat for the same price?
Secondly, I'd love to see an analysis of the RASM's. While it is accurate that CO BF is priced at the same level as its competition, CO also discounts its J much more deeply and more frequently than the competition (on the other hand some of the competition upgrades more customers, so it is not clear which carrier is foregoing the most revenue).
Also, BF cabins seems to fly quite frequently with empty seats, sometimes a lot of them.
While the density of J is helpful in terms of making a profit, if CO starts to fly with a lot of empty BF seats, this density won't be doing them any good.