Is International First Class Profitable?
#16
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#17
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#18




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It might for some. Yet the "2 cabin" airlines often have a much better J product than the 3 cabin airlines. I generally want to be in the airline's front cabin. I'd rather be there at the time of booking than some illusory chance of a last minute UG to an F cabin. The airlines that have a luxurious F cabin don't generally make it something that one can easily upgrade into.
#19
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More on topic to the particular question at hand - it is quite possible that airlines run an F class as a loss leader to position themselves as a high-quality carrier across all classes. Airlines that do this don't need to do this on every flight. Offering F class on a few signature routes is enough.
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Maybe, but if the cabins are reasonably then full someone's paying. It's not all upgrades. We'll never really know if those in J could go F or not will we? There are some excellent offers in F about, perhaps airlines are trying to fill the cabin so they can tell themselves it's worth having one - as has been said, kudos for the airline so they can project a certain image. And isn't it probable that there are more seats taken in J on company business then paid for personally?
#21


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Onboard service aside, the F value proposition also includes ground services. This might not be something overly exciting with US carriers, but many international airlines offering great F class products also do a great job with F ground services - think LH/LX/AF/SQ etc.
#22
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That's very poor reasoning.
Sometimes it takes a business quite a while to cut a money-losing product line. But by your logic, the mere fact that a product-line exists means that the product is surely profitable.
If only running a business were that easy!
BTW, I've flown UA international first class. It's a joke to call it "first class." I've had better overall experiences in J on several other airlines.
Sometimes it takes a business quite a while to cut a money-losing product line. But by your logic, the mere fact that a product-line exists means that the product is surely profitable.
If only running a business were that easy!
BTW, I've flown UA international first class. It's a joke to call it "first class." I've had better overall experiences in J on several other airlines.
Some airlines don't find it profitable so they replace it. Others still retain it. How can you be so sure sure those airlines that retain it must all be getting rid of it? How can you be so sure that just because some airlines find first class unprofitable means ALL airlines with first class unprofitable?
P.S-If you think UA's first class is the "industry standard" for first class quality and performance, you really haven't flown first class much. Sorry to be blunt, but that's the truth.
Last edited by WindowSeat123; Jan 25, 2014 at 10:21 pm
#23


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Interesting discussion. CX's second flight from ORD & the EWR do not offer F. If I'm not mistaken one of the SFO & JFK flights also switched to no F. Now is CX doing this because it is not profitable or are they just trying to get more business passengers in J?
#25
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There are still quite a number of major international carriers (and two US ones-UA and AA) that still offer first class, it is not as niche as you claim. If those carriers found first class unprofitable, they would have eliminated it long ago (since airlines are so fanatical in controlling cost). The fact these airlines have retain it means it does make money for them. Hence it is profitable enough for them to keep it.
It is a niche product with shrinking demand. Some routes/markets can support it and those may continue to see such offerings. But that's the very definition of a niche product.
#26
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But what exactly is "niche product" definition anyway? If you want, first class has always been a "niche" product since only a relatively small percentage of passengers fly on it. But it is not "niche" from the standpoint of revenue since a big chunk of their profit historically comes from it.
I would have to see their revenue contribution by class to determine if it really is a "niche" product.
Last edited by WindowSeat123; Jan 27, 2014 at 4:19 am
#27
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Only somewhat. New deliveries (and the last of the 763 conversions) are 2-cabin only right now and there has been no commitment to future 3-cabin products made in any official capacity. They're not ripping it out like LH is, but they're definitely not growing the number of seats available.
And it is, IMO, niche in that only certain markets can support it. That may have always been true but the airlines are finally doing something about it. There's also the problem of Business Class being too good so that it rarely is worth the premium to move up to F. Lufthansa execs went on record lamenting the flat-bed C/J seat as destroying their F yields.
And it is, IMO, niche in that only certain markets can support it. That may have always been true but the airlines are finally doing something about it. There's also the problem of Business Class being too good so that it rarely is worth the premium to move up to F. Lufthansa execs went on record lamenting the flat-bed C/J seat as destroying their F yields.
#28
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More on topic to the particular question at hand - it is quite possible that airlines run an F class as a loss leader to position themselves as a high-quality carrier across all classes. Airlines that do this don't need to do this on every flight. Offering F class on a few signature routes is enough.
If you look at where F is mostly flown then I'd say you're probably right. I'd say it's not a profit center for many airlines, it's a marketing decision. If they can make money on it then that's probably a bonus.
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#30
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I think it's mainly about just capturing the people who would take first class in the first place... usually those sorts of people do a lot of air travel, and even though when you look at it from a purely cost perspective it doesn't make too much sense, from the marketing and loyalty perspective, it is reasonable.

