Spiff

Aces, you may know a lot about making ejection seats, but you appear to know very little about airline economics. The majority of the revenue airlines receive (well, under the "old" model anyway) is from those paying sometimes > 10x the fares of leisure travel. While this model is evolving, the majority of the revenue on the plane is still coming from those who have paid premium, full, or nearly full fares. The Kettle Klan in the back is NOT making up the majority of the revenue on the flight. In fact, company XYZ's salesperson, who just bought his/her ticket 1 hour ago, is probably paying more than the entire Kettle Klan combined. These days, the salesperson is under more pressure from his/her company to book early or fly Southwest/other no-frills carriers, but some people are still buying those walk-up fares. In other words, the Kettle Klan might outnumber company XYZ's salesperson 8 to 1, but the salesperson has still outspent the Kettles 10 to 8. It's not the number of people who the airlines depend on for profit - it's the fares they pay.

AA, UA, CO, DL, YX, NW, US and carriers outside the United States all depend on the business traveler for their profits. They cannot afford to ignore the leisure traveler, but all the major, full-service airlines are not bleeding cash as badly as they could be (I know it's still bad) because some people are still buying expensive tickets.

The reason you might be getting bumped is because the airlines are getting people to buy those expensive tickets. There is no way they are going to continue to sell $100 tickets to the point that they are offering $300 vouchers to you to get off the plane. It's because they have sold all the $100 tickets they wanted to (perhaps half the plane) and managed to fill the rest of the plane up with more expensive fares, some of which probably were north of $1000. It is the $1000 people who make up the majority of the flight's revenue, not 1/2 of the plane who paid $100.

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"Give me Liberty or give me Death." - Patrick Henry

[This message has been edited by Spiff (edited 02-22-2003).]

SonOfACockroach

ACES, you might want to look at this:

http://www.the-mechanic.com/pdf/ual_creditors_01.pdf

Slides 28-39 show the importance of the business traveler to the airlines.

tazi

There is not a single city in the country that all three of those carriers have added routes or flights to recently.



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"They that can give up essential liberty to obtain a little temporary safety
deserve neither liberty nor safety." -- Ben Franklin

RUOK_316

Actually you can put a weapon in your hardsided suitcase http://www.floridashooting.com/Misc/...20Firearms.htm

CameraGuy

Aces,

Let's take a 737 with 110 passengers.

10 of those pay $2,000 for a fully refundable ticket.

The other 100 pay $200 for leisure travel.

Both groups paid a total of $20,000.

The airline makes the profit off of group A.

Group B is there because there were seats to sell and the airline is better off putting a fanny in them at a lower price than not at all.

As for a flight with all of a vast majority of Business Travellers, try any of these at 7AM during the week:

BOS-EWR
EWR-BOS
BOS-DCA
DCA-BOS
EWR-DCA
DCA-EWR
BOS-ATL
ATL-BOS
EWR-ATL
ATL-BOS

That is just a sampling. The fact of the matter is that w/o business travel, the airlines cease to exist in their current state. PERIOD.

ACES II

TAZI, that city would be DC. All three of those airlines HAVE added flights to DC within the last month from CAE.

tazi

None that I could find.

bdschobel

ACES,

Your grasp of factual information leaves something to be desired. I don't believe that conversing with you can be fruitful -- for either of us! It's a bit like talking to people who believe in UFOs (as noted above). They just believe it, and nothing that anybody says can change their minds.

Bruce

ACES II

Bruce, the same can be said for you. Much of what you post is emotional and not factual.

Tazi, they are there. US Express also added a Charlotte to Jackson Miss. flight as well. Leaving at 8:15 pm daily I believe. Things are picking up, slowly, but they are picking up.

tazi

Ok, you insist on pushing this than please, name the flights. Delta has no non-stops from CAE to DCA or IAD. And that is counting all flights, not just express. Untied serves IAD only. USAir has one daily flight I could find to the area. I overlooked the fact that no announcements of these supposed new routes and increased service had been made by any of the three airlines you mention, and went looking for the actual flights. They just don't exist.

Now, lets just assume that what you are saying is true ... that three airlines announced increased service/routes from CAE , to the DC area, all in the same month. Ok, fine. You do realize that these shuttle/express service extensions of the airlines exist to serve the business traveler that you have also claimed means nothing in terms of airline revenue. Why then would they increase only those flights that would serve the market that is only a drop in the bucket?


[This message has been edited by tazi (edited 02-23-2003).]

ACES II

Yes Tazi, I do realize that. I also realize that business travelers make up the vast minority of passengers and even though they do tend to pay more for their seats, that does not equate to a majority of the airlines profits.

An example stated in a previous post shows how it could. However, that assumes that the majority of the flights, if not all, are populated by the number of business passengers noted. That is hardly the case. For the record, as all of my flying is business related, my company negotiated its airfare with the airlines. They "gauranteed" a number of flights would be taken and they got a greatly reduced rate based on the number of flights the airlines were assured of getting. I know that my tickets cost at least as little as leisure passengers if not less. So with agreements like that in place at my company, I am sure they are with others out there. Therefore, the "model" of business travel costing more than leisure travel is skewed at best.

P.S. I will get the flight info on my next trip. I do know that US Express has 2 flights to Reagan National daily.

bdschobel

How sweet. ACES is trying to learn from Brian. You've got a long way to go, dude!

Bruce

richard

ACES, I think you are a little mixed up. The airline business has high fixed costs and low marginal costs with a perishable commodity.

So it pays overall for an airline to fill up seats at any price rather than fly those seats empty, as once flown the seats have perished forever.

But that does not make those leisure pax "profitable." Far from it. Airlines going out of business have typically flown very full planes on their way to insolvency.

The reason the full service airlines are losing billions is that they geared their revenue models (and their unions geared their labor demands) towards the model where business travels (regarded as inelastic) are gauged, as many seats as possible filled with them, and the rest of the seats filled with any old person who can pay any amount.

Now, the business travelers are savvy and not paying so much more than the leisures, so the business model, and its attendent labor costs, is in disarray.

But it is a fact that the business travelers (used to) account for the majority of profits.

(Currently, there are no profits to account for, so anyone's guess is as good as anyone else's.)

Re those negotiated fares you talked about, they are *not* lower than leisure fares. Airlines will no longer discount leisure fares under negotiated contracts.

In many cases, the negotiated fares are deeply discounted from high fare bases.

For instance, a US government contractor may pay $500 for a trans con flight on what is basically a Y fare, but Ma and Pa Kettle can still go for $200 on a 21 day advance purchase/Sat stay/non ref ticket.

Regardless of current economics, the frequent business customer is still the backbone of the airline business, and will continue to be for the forseeable future.

Since this is true, inevitably the airlines and airports will end up making accommodations for their best customers. We await the day.

tazi

Actually, they have four flights daily but none of them are recent additions.

None of the recent discussion has anything to do with the topic of the thread though. Can we go back to talking about luggage now?



[This message has been edited by tazi (edited 02-23-2003).]

tsadude

Richard, I like your view best. I started looking at aviation maintenance employment prior to retiring from the military and was amazed at what the mechanics were paid, but most of this was union driven. I think that the unions a strangling the airlines to death. Most of the non union mechanics had it rough for awhile but they still are working steady.




[This message has been edited by tsadude (edited 02-23-2003).]