Dovster

The more I look at the difference between Business Class and Economy Class fares, the less I can understand why anybody would shell out to fly in front of the curtain.

Go to Delta's website and check the cost of a flight from CVG to Gatwick. At random, I checked what the price would be leaving on Feb 9 and returning on Feb 20: $707 for Economy class and a whopping $7862 for Business.

That means you could make the trip 11 times in Economy for what one business trip would cost you.

The food difference? Come on, you are getting Business Class meals that are costing you (for dinner) $40 in a decent restaurant -- max. You can get a much better breakfast in Denny's for $6.

Entertainment? A couple of extra movies which you could get at Blockbusters for $15.

A more comfortable chair? Yes. Agreed. Unquestionably. But I am willing to make this offer to anyone willing to accept it:

I am willing to sit in a room, with an Economy Class type seat, even without a movie, and without getting any food at all for 8 hours on Feb 9 and 9 hours on Feb 20 if you are willing to pay me the difference between the two fares: $7155.

In fact, if you will make this deal with me once a month, I could retire happily.

nrr

I can't see paying $707 for a flight from CVG to LON. From NYC there are almost (except "peak" summer) always specials to Europe for about half that fare! I flew on AF from JFK to CDG on 1/1/03 the RT was $330. The price for business class (over $7000) is outrageous!

indufan

I don't know how many there are but the fact are that SOME people apparently make that value judgement and choose to pay the money.

heckler

$707 isn't typical for that time of year to London.. most fares from DL hubs to LGW can be had at the $375-450 level, before taxes and fees. You must have pulled up a H,K, or Q fare, not a L,U,T fare.

I'd also argue that your assessment about the cost of the perks in FC/BE are overrated. I would say the food, while generally better, doesn't cost a whole lot more - and certainly not more than $20 - unless you have multiple helpings and suck down a couple of bottles of wine.

[This message has been edited by heckler (edited 08-02-2003).]

Dovster

Imagine this scenario:

Scene: Delta HQs, Atlanta.
Dramatis Personae:
Leo Mullen, CEO
Frank Flickenhammer, middle level manager

Leo: Flickenhammer, I've just been shown your expense account for your week in Cleveland. I see you stayed at the Hilton. Why? Holiday Inn is much cheaper.

Frank: That's true, but I am a member of Hilton Honors, so I get points every time I stay there.

Leo: And you can use these points for free stays?

Frank: In theory. In real life it is almost impossible to find one available.

Leo: Then what is the point?

Frank: It gives me status. I am allowed to check into my room faster than other people and sometimes I even get a better room.

Leo: Better than what? You took an "Executive Suite" for the whole week. Your total bill was $7862.

Frank: Yes, sir, but you have to remember that when I do that they give me free drinks, some more TV channels, and larger chairs in the room.

Leo: I can't believe that is worth the difference in price. I just looked at the Hilton website. They have standard rooms in that hotel for just $707 for the week.

Frank: Sir, I would never have agreed to pay THAT price! That is the "Corporate Discount" price. I would have insisted on paying the "Rack Rate" of $1500.

Leo: Why? You get exactly the same room!

Frank: True, but it shows Hilton that I am loyal and that I really care about them. Besides, they give me double points towards elite status when I pay the rack rate.

Anyone here think that Frank would walk out of Leo's office still employed?

keithguy

It doesn't quite work that way. Business class allows for passengers to be well rested on the flight and refreshed upon arrival.

If someone needed to take care of business in CVG on Feb 9 and needed to take care of business on Feb 10 in the morning in London, and if this business involved say, closing a deal and being refreshed makes all the difference in the world, wouldn't it be worth the $7K difference if closing the deal meant several hundred thousand/million dollars in business?

Business class is not just nicer food, fancy movies and a more comfortable chair, it's the combination of those to allow passengers to work, sleep, and enjoy themselves on the flight.

Dovster

Keithguy,

Admittedly, there might be rare circumstances such as you describe, but it is hard to believe that there are so many million dollar deals being made on a daily basis that they fill up all the business class seats being flown.

Even harder to believe is that all these deals came up at the last moment. In the great majority of cases, business trips are planned at least a few days in advance.

If the hypothetical businessman you described had either pushed CVG up one day, or pushed London back one day, he could fly to England for the $707, gotten a good sleep in a top rate London hotel for $200, and his business still would have saved $6982.

True, he would have lost a day's work, but how many people are being paid by their companies $6962 for one day? (Assuming he gets off 3 weeks per year and works 5 days per week, has 8 holidays off, and 4 sick days, that means 233 work days or a gross salary of $1,622,146.)

Are there people who earn that much? Of course. Are most of those in Business Class among them? Very doubtful.

On my last ATL-CDG flight I was fortunate enough to get an operational upgrade. The woman sitting next to me was going to France for three weeks with her parents and her two sons. Her parents had paid for the whole family to be in Business Class.

Obviously, they could afford it and how they spend their money is their own business, but I just looked to see how much an Economy ticket would cost for a three week trip in Aug/Sept: $953. Business Class: $7381. If this difference was true in May (when I took that flight), they forked over an additional $32,150 for the five of them to be in front of the curtains.

Guess what? For $10,000 less they could have paid for an entire year's tuition at Harvard!

opus17

It's worth exactly what someone will pay for it.

Cholula

Hey Dovster...good post. I flew Int'l Economy once in my life...early '80's I believe.. and swore to never do so again. So far I've been successful in upgrading many dozens of Int'l flights. It's probably the rare person who pays full boat for Int'l Business. Most of my flights are in the $1,000-$2,000 range and upgradeable with PMU's or miles. If paying $7,000+ for a Business Class seat was my only option, I'd happily join you in the back of the bus.
The same price/value argument you made on airline seats can also be made on hotel rooms...why pay hundreds of dollars for a suite at the Ritz Carlton when you can get a Motel 6 down the street for $49/night? Or going to a gourmet restaurant rather than Mickey D's for dinner. Same thing on buying a Mercedes rather than a Hyundai. Both cars will take you where you want to go in the same length of time.
Guess some people just want to treat themselves to the best life has to offer. Others take a Clark Howard approach to life and squeeze a dollar until it cries.
I'm actually thrilled that everybody doesn't want to sit up front. It's hard enough to score a seat up there anyway and I'd rather not have any more competition.

Dovster

In a true market economy, Opus is undoubtedly correct. And, as I said, I really have no problem with that family paying so much -- it is their money to do with as they want.

What I object to is that in most circumstances, these skyhigh seats are not being paid for by the flyers or even their employers. They are being paid for by the people sitting in Economy -- and by those who don't fly at all.

How so?

Back in 1976, when I was working for Merck, its CEO -- then Henry Gadsden -- banned all corporate business and FC flights. He was responsible to his stockholders and could not see justifying this kind of expense.

Merck may have been among the first to take this stance, but many other large corporations have since banned or restricted the purchase of up front tickets.

The ones who still buy them are (profitable) smaller companies seeking to give their execs perks which are tax-deductible expenses.

When Acme Widget pays less in taxes, everybody else pays a bit more to make up the deficit.

That is what I meant by it not being a true market economy. The company giving the perks realizes that it is paying only a percentage of the extra cost. Other taxpayers pay the rest.

Get rid of corporate taxes (which is really double taxation as shareholders are then taxed on their income) and set a flat tax rate (I have heard estimates of 15 to 20 percent as sufficing) and see how fast these companies stop buying seats in front.

Flying_Duck

And this is still Merck's (and many other large pharmaceutical companies, State and Federal government) policy - I know this all too well, as these are the entities paying for my travel: no FC paid, rarely BC if having to travel overseas and no reimbursement for paid upgrades.

at 6'3". 250 lb, the FC seat, especially on longer trips, is the only way that makes travel tolerable. When I had the opportunity to talk with Robert Borden (in charge of Skymile Program), I tried to impress on him, that if FC and coach became synonymous, or I had to pay > $8,000 out of pocket to upgrade all my legs as I calculated I would have to do from 1/1/04 (as a PM), people like me (a so-called "expert" - invited to give talks all over the world) would start to say "no thanks" to these invitations and just travel less. There is absolutely no way I would travel my 125+K miles a year in coach, even if my job dependet on it - as if so I would find another job!.

I sort of think that my situation and reaction is not that unusual amongst frequent business travelers, but acknowledge I may be mistaken. This is the big gamble Delta is taking: losing $30,000+ in travel from people like me, partly for traveling less, partly for traveling with a better coach product when having to travel - and I told Mr. Borden that.

JBLUA320

$2,000 RT is still OK
Anything over that, too much
(I probably woudln't pay $2k, but decent still.)

Dovster

Many international flights have 11 seats in a row (3, 5, 3), Business Class, in the same row, will have 6. (2, 2, 2).

Let's assume that 5 Business Class rows will fit where 6 Economy rows usually do.

That means that where the airline can fit in 66 Economy Class seats, it can provide for only 30 Business Class chairs.

At full capacity, therefore, Delta will be putting only 45% of the passenger total in Business as it would in Economy. It would seem that a Business Class rate of 223% of the Economy Class rate would be a fair charge.

(Yes, the Business Class flyer is getting somewhat more expensive food, but this is certainly offset by the fact that he is only eating one meal, not two, and his baggage allowance does not total what two Economy Class allowances would.)

If this were the rule followed, that $707 Economy fare to London would cost $1577 -- and would be a much more reasonable cost/benefit ratio.

MisterX

Its the space in the seat that makes the difference for me. I have a personal trip and I have an 8hour flight followed by a 4 hour drive to get to a family function. It would be really good to be able to spread out and sleep.

Cholula

I guess the question here is does "really good to spread out and sleep" = an upcharge of $6000+ for the privilege.
For some it does, for others it does not. It's a value judgement we all have to consider at some point.