Beltway2A

Like with all things, some essentially do. The Nats sell $5 tickets in the hours before the game. Lots of people just buy them instead of buying tickets beforehand. And everyone walks out happy.

Similarly, many airlines have no problem selling last minute upgrades. Delta just isn't one of them for this particular route.

runninaway

You do realize you've just given an example that supports the theory that last minute discounting depresses regular priced sales?

runninaway

CPMaverick

There are economic arguments each way.

What's interesting is DL is on the forefront of FCM domestically, selling FC tickets for just small amounts more than coach just to fill the seats. Yet internationally, they protect the product. Totally different philosophy.

CPMaverick

The argument isn't against cheapening the product, the argument is that the airline makes less revenue when they offer buy-ups. Because some passengers rely on buy-ups instead of buying a J ticket.

As you have shown, people eavesdrop at the gate. If someone that paid $5000 for a J ticket heard you buying an upgrade for $500, they might say 'next time I will just do that.'

Nobody says 'next time I will just be the captain's wife.'

Beltway2A

A buy-up from someone already on board isn't the same as buying cheap baseball tickets. I was directly responding to the person who asserted that sports venues don't sell last minute tickets cheaply - they absolutely do.

The idea that selling a last minute upgrade somehow "cheapens" the product, or that not selling them "protects" the product is a little absurd. Some of the world's best premium class products sell last minute upgrade, with no effect on the perception of the product.

One way to differentiate such an offering is to remove certain soft products from the offering, such as the complimentary chauffeur service or lounge access. You can differentiate pricing into segments without "cheapening" your product. In the baseball example, the tickets are standing room only. If you want to guarantee a seat, you have to buy a ticket ahead of time.

CPMaverick

It's hardly absurd. Is it the best strategy for revenue? Unclear. But obviously Delta thinks so. They have a lot more information than any of us. it's absurd to think it is so black and white.

PRWeezer

Are the $5 Nats tix for empty premium seats that weren't sold or just for Grandstand nosebleed seats? No, you say they are standing room.

Or can you buy your way from the nosebleed to an empty seat behind home plate where you get unlimited food & drink for 5 bucks once the game starts? Otherwise there's no point of comparison to the premise of this thread. Because Delta isn't willing to do that, as you say.

s0ssos

Because you might not have business at the higher pricepoint in the future.

That is why some trades limit their members, so they can charge more. If they had more members they can do more business. But the point is profitability/income, not whether you have more business.

FlyerWx

I remember on the first day of my college intro to econ class, the professor gave a very similar example.

From what I recall, there are definitely short-term vs long-term economic implications. If, at the gate, DL thinks on the margin, they should sell the ticket at a price above the cost of extra food, extra fuel, etc that a D1 seat requires. However, as has been mentioned, they can't keep doing this, or else it would significantly decrease longer-term profits.

Oh, and there's the non-monetary cost of an unhappy non-rev

Time traveller

I am surprised the seat wasn't taken by a non-rev

Not all international business class seats are offered buy-up at the gate on AA or UA either.

How an airline sell/allocate premium cabin seats, especially on long-haul international flights, is really upto people working at revenue management (RM). Many US based airlines offer them as perks to employees + their friends/family as non-rev. Many European/Asians allow premium cabin seating to only certain non-revs (management and pilots). Many of these same airlines don't even offer mileage upgrades last minute, whereas most US airlines will sell premium cabin seats to those upgrading with mileage+copay.

At the end of the day, it is up to the RM to decide and they usually employ a lot of statistics to maximize profit for the airline.

readywhenyouare

I’ve always thought Delta should integrate a live auction feature into the mobile app. Then they could auction off the remaining premium cabin seats.

CPMaverick

A few other airlines use a common system like this (not a live auction but a bidding system). VA calls it 'UpgradeMe' but NZ use the exact same company. There is typically a pretty high minimum bid.

https://www.virginaustralia.com/au/e...ers/upgrademe/

CMK10

I'm a lawyer with his own practice and I've done work far below the market rate if people ask me last minute and I'm already at the courthouse. May as well, I'm there and it was more than I was planning to get anyway. Doesn't cheapen my brand but it does make people happy and it's scored me some repeat business.

Christefan

I have seen this on many routes that I have been flying on over the years (i.e. JFK-TXL, JFK/ATL-MUC/STR, JFK-BCN). The tool that was used is an internal Delta tool for "friends and family" that is used for listings and to determine loads for non-rev travel which shows the actual load in each cabin and the seats that are authorized to be sold above the actual seats available.