pdx1M

This new approach to first class pricing seems to be happening across the industry and is long overdue. In no other industry that I can think of would a company have a premium product with a fairly low cost (and therefore great pricing flexibility) that they continuously priced so high as to make it almost unsellable. Yet this is what the airlines have done for years with domestic first class. Then when they couldn't sell it they created a use for it by giving it away to some of their customers. But this never made sense. We may all like upgrades but what makes business sense is to find a price point where you can sell a reasonable number (hopefully >50%) of your seats. If you price such that you sell out before flight time you are too low, if you go out with all or mostly upgrades you are too high. Pretty basic pricing stuff. Why it has taken the airlines so long to figure this out is something I never understood. Personally, I would rather have sensibly priced first class that I can choose to buy than a random upgrade lottery - probably in the minority here though.

787fan

Very much agreed. Selling F at a reasonable premium is far more useful than quoting astronomical prices (like $1500 one-way on non-premium transcons) for the sake of preserving upgrade rates for elites

manstein58

Good sentiment. They have been great through tough times

LaserSailor

All those poor OPMers spending F500 money won't like this.....but I think they have finally figured out how to monetize FC

GUAP isn't perfect either, Shirley.....

entropy

DL led the way with this one, and its a good idea. I see no reason to charge 3-4x the price of coach for domestic "first class". 1.5-2x is much more palatable, and many many more people will take advantage of it.

Frankly, they would do well to price Flexible tickets more reasonably as well. They'd get a lot more uptake if people are looking at a $500 price vs. $400.

ConnFlyer

Historically, the one problem is that many business travelers are prohibited from buying first class. Even if the F fares are more reasonable, many companies still won't allow it.

However, I agree that more reasonable F fares are appealing. I just paid $778 for IAD-DEN-SLC roundtrip in F. The coach fare was $501 and since I'm traveling on my own dime and have little chance of an upgrade (I'm a lowly gold), it was worth it. Plus, the DEN-IAD leg is an international 763, so I'll have a flat bed seat for three hours.

bob_the_d

yeah, that's the annoying part for me. even when F is cheaper than Y, i still can't buy it as it's "out of policy."

pdx1M

Funny story to this - some years back it was not unheard of for situations to align such that F from PDX-SFO was actually cheaper than the best available economy fare. Our corporate booking engine would dutifully give you the lowest available fare for the trip (F). However, when you actually selected it for booking (and note that it didn't even supply a Y option on the flight) it would then ding you about why you were buying a ticket that was out of policy. Luckily, as a fairly sane corporation about this, the engine simply required you to supply a reason that could then be audited by the travel folks or you boss or someone (never figured out who) and then purchase the ticket. Would have been a real pain had the system actually require manual intervention to buy the ticket.

By the way - I would suspect that if this sensible F fare thing continues you will see two things happen on the corporate side. Some (generous) corporations will allow some +x% upfaring from minimal that will allow folks to buy F. More will find a way to provide a "joint purchase" option in the booking engines that will allow the employee to provide a personal credit card automatically for the fare difference. When the fare differentials were 3x or 4x neither of these options really made much sense.

halls120

I'm one of those people that will take advantage of a reasonably priced F seat on a transcon. Especially when I've exhausted my RPUs.

tuolumne

Austrian has the Thompson Vantage seating arrangement, though. I doubt UAL would install that on a portion of the 767s, especially since their next generation C product will likely be a reverse herringbone layout, which I'm not aware of any operator putting in their 767s (due to floor considerations).

exwannabe

Your argument that DL "hides" the hedge losses simply fails to understand how this works. In the "as reported" number DL takes the hedge gain/loss in the Q where the fuel is spent, which makes the reported numbers more reflective of what is going on. Over time, the total earnings are the same with either treatment. If DL did make a bad hedge bet, it will show up in higher fuel prices the next 2 Qs.

On tax, both airlines use tax credits to avoid paying most. The difference is that DL has these on the books as an asset, while UA does not (likely to be changed next Q). When DL reversed their TLCFs in Q4 '13 they had a GAAP earnings of something like $8B, but they did not push this number as the lead because it was just bookkeeping.

On special items like fleet/employee restructuring, I quasi agree with you. Too much of this (done by all) is really just normal costs of business that tend to be lumpy. If somebody wants to call a writeoff of such a "special", then they should put the costs back in the as reported numbers over the following Qs when they do hit cash (and I do not believe this happens).

exwannabe

I thought I heard of somebody doing a 1-1-1 (reverse) herringbone on a 767, but I might have been reading speculation.

mike1968

http://www.seatguru.com/airlines/Air...7-300ER_v1.php

Air Canada is 1-1-1, but overall, I don't care for the AC seat.


on upthread topic about F vs policy; my old company you could book F and it would show policy. As long as you expensed policy and "ate" the difference no questions were asked. Usually worth it is difference was less than the cost of e500s.

fastair

Actually, CO led on this a decade ago as a stand alone company. DL was their partner back then, so matched in CO dominated routes. Shortly after, DL tried to break the tendsncy to charge a huge premium for fares without a Sat night stay and introduced 1 night min stay at reasonable prices throughout their domestic network.

entropy

Not quite, DL (NOT a CO partner), not NW led that, Delta Simplifares . I remember quite clearly at some of the first CO 'do's that Kellner and Smisek were calling them "StupidFares".