BER Flyer

I'm not the one you're asked buy anway here's my 2 cents': No. As i pay any ticket out of my pocket i would never spend $ 5k on an TATL flight- what a waste. I will buy bussines if the Z/I fares are in the $ 2-3 k range. Will buy up from Y to PE when the lower "W" fares are available.

HongKonger

I'm pretty sure the power of Congress to regulate commerce IS in the Constitution.

TrojanTraveler

Just to see if I'm following. I do not have expert knowledge here, but to oversimplify, are you saying that Biz fares ex-EU are lower than ex-US due to the heavier competition ex-EU? (And if DL does indeed reduce low biz fares ex-US, then that gap would grow).

If that's the case, it would be interesting to get the opinion of those who think that the US air market is "competitive" post-consolidations.

HongKonger

Oh the horror!

MSPeconomist

Yes, they're lower, but I wouldn't necessarily say that it's due to more competition. AFAIK every carrier that sells TATL tickets exEU also sells TATL RTs exUSA. They're different markets with different elasticities of demand.

knit-in

I agree with you on buying up from Y to W. I've done that myself.

To address your specific flying pattern, I guess the question to you would be, would you buy PE for $2000 even if the $3000 Z fare was available?

GUWonder

Every IATA carrier that sells US-bound ex-EU tickets does sell ex-US EU-bound tickets too.

The US-side and EU-side markets are not perfect copies/mirror images of one another, and the elasticity of demand is not perfectly copied/mirrored either across the markets.

jsmith50

If DL wants to become a commodity and monetize everything domestically, that's fine because their competition has largely done the same thing in a race to the bottom. Then it becomes the lesser of evils. In this case, in my opinion, DL offers a better soft product and hard product which is why I continue to fly DL. However, with the international product, DL is wrong. If you reduce BE seats and increase coach, yes, it does put additional bodies on the planes in some cases and I won't debate Glen's comment that those BE seats are marginally profitable for DL. But what DL seems to miss here is that the international product is NOT competitive with what international airlines are offering. For the first time in several years, I booked an international flight this week NOT on DL. I have an Australian client where I have to visit their site a couple times a year. They are one of my only contracts to allow for international first class. I booked Qantas on a First Saver fare for almost $1K less than DL was charging for BE on the same route (LAX-SYD). In my mind there's no comparison between the premium cabin experience between Qantas and DL so why would I pay $1K for an inferior product. Not to mention that the Qantas lounges are far and away better than the SC. DL can not become a premium airline focused on HVCs and high fare tickets while offering a substandard product. It just can't happen unless those buying the tickets are too stupid to realize they're being swindled out of their money by those in charge who are only interested in the bottom line.

jdrtravel

There is truth to the higher quality of non-us carries. That being said, you picked a bad example as Qantas is going through some fairly major financial difficulties right now. They just announced a massive layoff and I would expect to see a lot more changes in the future.

MSPeconomist

In particular, QF is cutting back on its international routes and also decreasing the number of routes that offer IFC. They seem to be losing market share to mideast carriers and moving toward codeshares on some routes.

My personal experience on QF has been mixed. They have a lot of domestic "commuter" service by affiliates using small planes, in some cases with very severe limits on luggage. I've been on some domestic aircraft that have two rows of domestic FC seats but they use a moving curtain to define the premium cabin. Too bad if your assigned seat isn't in rows 1 or 2. OTOH, I've done their 767 between MEL and SYD with nice 2-2-2 seating (like older recliner business class seats) and a good meal (Australian wine and steak, with no choice). I was less impressed with long haul business class, but I haven't experienced the new seats.

Yes, the QF lounges are great. In fact, on Friday afternoon, the domestic SYD lounge can seem like happy hour as well as a "see and be seen" sort of place.

pbarnette

Given that all competitors on TATL routes ex-EU fly those planes in the opposite direction as well, it is impossible for differences in pricing to result from supply or "competition". Some of our European friends like to perpetuate this canard, but it is illogical and pretty clearly false on its face.

TATL fares are lower ex-EU because there is less demand ex-EU. The European economy is still weaker than the US and European consumers have markedly lower levels of disposable income, on average.

Where the EU has seen more competition in the long-haul Biz space is in non-TATL markets, where the ME carriers have leveraged their geographic and cost advantages to disrupt the market. They lack the geographic advantages for most ex-US markets, so have had less of an impact.

pbarnette

Ageed that it is an incredibly odd choice. QF is getting their clocked cleaned in all directions and is increasingly a financial basket-case.

MSPeconomist

It's not a matter of less demand exEU. Absent any major migration waves, most passengers fly RTs in some form or another, so that the total number of passengers in each direction is the same. If the demand function exEU were the same as the demand function exUSA except that the exUSA one is proportionally larger at all prices (fewer people in the EU but they're otherwise identical, for example), the elasticities would be the same. The point is that the elasticities are different, not that there's less demand for TATL flights from the EU side.

pbarnette

I think you are splitting hairs. And, FWIW, while I would acknowledge that the elasticities are different, you did not present any evidence that demand was not, in fact, higher in the US than the EU. It very well might be.

Regardless, I think we can both agree that the differences result from differences in the demand curve, not the supply curve as postulated by others.

jsmith50

I wouldn't say I 'picked' a bad example. Rather it's what I booked. I did Qantas a year ago in FC flying LAX-SYD. I found their in-flight services, seats, meals, etc. to be far superior to DL's international BE service which I flew earlier last year on the same route. In fact, maybe it's a perfect example that a company going through major financial difficulties can still offer a better FC and lounge experience than an airline like DL that is financially sound. Tends to show where the priorities are and who they are catering to. Qantas is trying to maintain a premium FC experience. DL is trying to save every penny they can while still trying to woo the same flyers willing to pay for the premium cabin.