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Has no F and smaller J cabins led to higher fares?

Has no F and smaller J cabins led to higher fares?

Old Apr 11, 17, 9:08 am
  #1  
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Has no F and smaller J cabins led to higher fares?

Lately, I've noticed very little TATL P/Z fares, even on midweek departures.
In some cases, the minimum selling class is C.

Based on my experience in previous years, P/Z and even R class all had higher availability.

Have the changes to premium cabin sizes (744 to 789 for example) and the loss of revenues from F prompted a reduction in the cheaper business class fares?

Also, P fares are coming in much higher than I can ever remember, so even if they were available, they're much more expensive than I'd usually splash out.

Anyone else seeing the same?
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Old Apr 11, 17, 9:10 am
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My opinion is "yes".
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Old Apr 11, 17, 11:05 am
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Noticeably lower J fares ex SYD
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Old Apr 11, 17, 9:04 pm
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Originally Posted by LordTentacle View Post
Noticeably lower J fares ex SYD
But is that caused by having DL, VA, AA, QF and UA running between USA and Australia or the smaller premium cabin on UA ?
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Old Apr 12, 17, 12:50 am
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Originally Posted by Aspen View Post
But is that caused by having DL, VA, AA, QF and UA running between USA and Australia or the smaller premium cabin on UA ?
Every airline sets its own Pricing and Revenue Management policies. United hasn't had talented PRM staff for a while, so don't be surprised if they randomly implemented something that makes little to no sense.

Just last week: FLL EWR A319. UA did not sell a single F seat and the cabin was filled with 8 upgraders, yet UA kept raising the F rate as it got closer to departure. Coach left with many empty seats too and again, UA kept raising prices as it got closer to departure... which they could do if the plane was filling, but in this case it didn't.

Internationally, I have seen many cases EWR-LHR when they keep raising prices and again, both J and Y go out with many empty seats in the end.
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Old Apr 12, 17, 1:56 am
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It's genuinely silly prices - 4000 ($4800) for a P class fare LHR-LAS (example).
This was always a 2800 or less fare last year.

Seeing LHR-EWR/SFO/LAX with no P/Z availability, so really am lost as to why they'd push the fares so high if they're leaving with empty seats.

My next flight is in 4 weeks, and have opted to use a GPU (hasn't cleared yet).
Will be absolutely surprised if it doesn't clear LHR-LAX on a Wednesday.
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Old Apr 12, 17, 2:16 am
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Originally Posted by fly747first View Post
Every airline sets its own Pricing and Revenue Management policies. United hasn't had talented PRM staff for a while, so don't be surprised if they randomly implemented something that makes little to no sense.

Just last week: FLL EWR A319. UA did not sell a single F seat and the cabin was filled with 8 upgraders, yet UA kept raising the F rate as it got closer to departure. Coach left with many empty seats too and again, UA kept raising prices as it got closer to departure... which they could do if the plane was filling, but in this case it didn't.
It's a pretty big leap to go from an example or two to "United hasn't had talented PRM staff." There are several variables that RM has to take into account, and the total load factor is just one of them. UA certainly could have filled the plane if they had offered every seat for $1, and, in the short term, that can be a revenue-maximizing approach. However, not only is there an opportunity cost to selling a discount seat -- you reduce the inventory available for more expensive seats later, and you offer someone a lower price who may be willing to pay a higher one -- there's also a significant customer training disincentive.

Airlines are offering a product that is, in many cases, essentially a commodity, and their inventory expires. If UA were to adopt a policy of always reducing fares on close-in flights that haven't filled, they would destroy their ability to make money. Travelers would learn to play "chicken," waiting until the last possible moment to book. They'd run into a self-perpetuating cycle; the more passengers waited, the worse UA's load factors would get, so the more they'd discount, and the longer passengers would wait. Furthermore, business travelers, who tend to be less price-sensitive, wouldn't be charged a premium for last-minute bookings on these empty flights -- and it's that business travel premium that allows UA to offer discount economy fares in the first place.

In the long run, it makes much more sense for UA to allow an occasional flight to go out half-full than it does for them to cede leverage over pricing to the customer.

To the OP: to the extent that fares are higher, I think it has more to do with a strong economy and high demand than it does the elimination of F. After all, F got its FT reputation as "employee class" for a reason -- UA had trouble filling those seats with paying customers. Gauge reductions will have more of an impact -- the only plane in the fleet that comes close to the 64 J+F seats on the 744 is the 77W, with 60 -- and, of course, that's limited to SFO-HKG for the time being. So, if you're used to 744 routes, then that's absolutely going to be a factor.

I haven't noticed P fares being any higher than usual, but I also haven't seen a lot of sales, and I mostly fly TPAC, not TATL.

As for R availability -- there is definitely a general feeling that it's harder to find R than it has been in years past. I think this goes back to RM getting better at selling the fares, and the strong economy providing customers to buy them.

Originally Posted by skycrab View Post
It's genuinely silly prices - 4000 ($4800) for a P class fare LHR-LAS (example).
This was always a 2800 or less fare last year.
Are you comparing the same season? Keep in mind the difference in the /$ rate since this time last year. If the UA fares are denominated in pounds, they may well have re-filed them.

Last edited by jsloan; Apr 12, 17 at 2:19 am Reason: Added response to additional post
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Old Apr 12, 17, 7:13 am
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Originally Posted by Aspen View Post
But is that caused by having DL, VA, AA, QF and UA running between USA and Australia or the smaller premium cabin on UA ?
Migration from 777-2 to 787-9 resulted in same number of premium seats on the daily routes and only AA has joined the fray since the change from 777 to 787-9

The complexities of the dynamically changing market are to complicated to try and link smaller cabins to higher fares
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Old Apr 12, 17, 8:31 am
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Originally Posted by jsloan View Post
It's a pretty big leap to go from an example or two to "United hasn't had talented PRM staff." There are several variables that RM has to take into account, and the total load factor is just one of them. UA certainly could have filled the plane if they had offered every seat for $1, and, in the short term, that can be a revenue-maximizing approach. However, not only is there an opportunity cost to selling a discount seat -- you reduce the inventory available for more expensive seats later, and you offer someone a lower price who may be willing to pay a higher one -- there's also a significant customer training disincentive.
Your argument makes absolutely no sense. Any competent analyst should be able to understand booking curves for his/her assigned markets. FLL EWR consistently gets low F and Y fares because UA know this market won't sustain high fares. Therefore, you can't be raising rates when you have a massive amount of inventory to sell and very few days left (unless it was for example JFK LHR which easily sustains low density 4-class 744s a-la-BA with 75% of the pax paying high fares). Even if the analyst in this case was used to managing a 738 over a smaller A319, he(s) should have carefully looked at the previous year's history and realized that he(s) still needed a lot of the lower booking class buckets to fill the plane... in the end it was pitiful to not sell a single F seat on the flight and Y left with most of E+ and even some E- rows entirely empty. Further, an analyst or team of analysts for a given market should know that the 6/7 am flight on a Sunday is not going to have the same demand as flights later in the day.

Meanwhile, on the same weekend, DL was selling dirt cheap F fares on the same market and their flights went out full. At least DL's analysts understand which markets they have to discount more to fill the plane and ultimately, they remain more profitable than UA.

If, on the other hand, UA could get lots of high fares, then it would make sense to not give away the seats (lower load factors with higher yields), but this isn't the case and UA has desperately been trying to increase its ancillary revenue in order to compensate for its net revenue deficits.

Note that my comments aren't based on a couple isolated cases, as even former CEO Smisek admitted that his airline had incorrectly forecasted passenger demand--really, how does that happen? An entire team of analysts good for nothing? Those forecasts aren't done by 1-2 people!

BTW, I have also been at conferences with UA's PRM staff. If they were given a standard IQ test, I doubt many would score over 90--well below the average person. United has the most enviable network of any airline in the world so no, I will not cut them any slack for their perennial failure which can easily be fixed--hire people who are competent, dedicated, and above all, understand that passengers are rational beings looking to maximize their purchasing power--they will not pay you a premium over AA, DL, even VX (which now flies FLL JFK) for a crappy product of a hated airline with a rapidly decaying brand image.

Last edited by fly747first; Apr 12, 17 at 9:03 am
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Old Apr 12, 17, 9:13 am
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Originally Posted by fly747first View Post
BTW, I have also been at conferences with UA's PRM staff. If they were given a standard IQ test, I doubt many would score over 90--well below the average person. United has the most enviable network of any airline in the world so no, I will not cut them any slack for their perennial failure which can easily be fixed--hire people who are competent, dedicated, and above all, understand that passengers are rational beings looking to maximize their purchasing power--they will not pay you a premium over AA, DL, even VX (which now flies FLL JFK) for a crappy product of a hated airline with a rapidly decaying brand image.
That's what you get when you go for the quick fix: hire cheap, incompetent people. Will be good for the current year bottom line thus securing managements' bonus. Come next year, the top takes a leave and let the airline revenue collapse. But then again, that's the problem of the new guy in charge!
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Old Apr 12, 17, 12:25 pm
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Originally Posted by skycrab View Post
It's genuinely silly prices - 4000 ($4800) for a P class fare LHR-LAS (example).
This was always a 2800 or less fare last year.

Seeing LHR-EWR/SFO/LAX with no P/Z availability, so really am lost as to why they'd push the fares so high if they're leaving with empty seats.

My next flight is in 4 weeks, and have opted to use a GPU (hasn't cleared yet).
Will be absolutely surprised if it doesn't clear LHR-LAX on a Wednesday.
Have noticed the p-fare inflation on TPACs this year ... significantly higher than what we paid in 2016 .... YMMV
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Old Apr 12, 17, 12:33 pm
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Lower fares because the product is less competitive with the non-US carriers.
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Old Apr 12, 17, 12:40 pm
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Originally Posted by fly747first View Post
Your argument makes absolutely no sense. Any competent analyst should be able to understand booking curves for his/her assigned markets. FLL EWR consistently gets low F and Y fares because UA know this market won't sustain high fares. Therefore, you can't be raising rates when you have a massive amount of inventory to sell and very few days left (unless it was for example JFK LHR which easily sustains low density 4-class 744s a-la-BA with 75% of the pax paying high fares). Even if the analyst in this case was used to managing a 738 over a smaller A319, he(s) should have carefully looked at the previous year's history and realized that he(s) still needed a lot of the lower booking class buckets to fill the plane... in the end it was pitiful to not sell a single F seat on the flight and Y left with most of E+ and even some E- rows entirely empty. Further, an analyst or team of analysts for a given market should know that the 6/7 am flight on a Sunday is not going to have the same demand as flights later in the day.
The vast majority of RM decisions are made by a computer. Do you honestly think that there are people sitting there reviewing each EWR-FLL flight manually and making decisions based on that?

UA has an L fare filed at $117 one-way for EWR-FLL with no advance purchase (searching for Sunday 5/7). The lowest fare is $46 one-way with 21-day advance purchase. While $117 is clearly more than $46, it doesn't seem that unreasonable for a last-minute fare. The cheapest no-advance-purchase first-class fare is a T/UPDI fare, booking into P, at $281 one-way, vs. a L/UPDI 14-day advance purchase fare at $256, also booking into P.

UA is not trying to extract a ton of revenue from last-minute purchases on these flights. If you're seeing fares far in excess of that, that means that RM was restricting the flight to higher buckets, suggesting that either (a) historical curves showed more close-in demand than actually occurred, (b) cancellations happened, or (c) they were intentionally limiting the number of tickets sold for protection in IRROPS.

How was the weather? Not only would that affect hold-backs for IRROPS, it might also affect last-minute demand on a leisure route. Perhaps UA got a bad forecast.

Also, keep in mind that every single seat on an early-morning FLL-EWR flight is also a seat on FLL-BOS, FLL-PWM, FLL-LHR, FLL-MAD, and scores of other routes. RM is much, much more complicated than "make sure the plane fills." Anybody can fill a plane; trying to do so profitably is a much more difficult endeavor.

Your assertion is that a company which has gained a reputation for being singlemindedly focused on the bottom line has hired and retained incompetent people to work in the part of the company that is most directly correlated to profit? That's hard to believe.
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Old Apr 12, 17, 10:42 pm
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Originally Posted by jsloan View Post
The vast majority of RM decisions are made by a computer. Do you honestly think that there are people sitting there reviewing each EWR-FLL flight manually and making decisions based on that?

UA has an L fare filed at $117 one-way for EWR-FLL with no advance purchase (searching for Sunday 5/7). The lowest fare is $46 one-way with 21-day advance purchase. While $117 is clearly more than $46, it doesn't seem that unreasonable for a last-minute fare. The cheapest no-advance-purchase first-class fare is a T/UPDI fare, booking into P, at $281 one-way, vs. a L/UPDI 14-day advance purchase fare at $256, also booking into P.

UA is not trying to extract a ton of revenue from last-minute purchases on these flights. If you're seeing fares far in excess of that, that means that RM was restricting the flight to higher buckets, suggesting that either (a) historical curves showed more close-in demand than actually occurred, (b) cancellations happened, or (c) they were intentionally limiting the number of tickets sold for protection in IRROPS.

How was the weather? Not only would that affect hold-backs for IRROPS, it might also affect last-minute demand on a leisure route. Perhaps UA got a bad forecast.

Also, keep in mind that every single seat on an early-morning FLL-EWR flight is also a seat on FLL-BOS, FLL-PWM, FLL-LHR, FLL-MAD, and scores of other routes. RM is much, much more complicated than "make sure the plane fills." Anybody can fill a plane; trying to do so profitably is a much more difficult endeavor.

Your assertion is that a company which has gained a reputation for being singlemindedly focused on the bottom line has hired and retained incompetent people to work in the part of the company that is most directly correlated to profit? That's hard to believe.
You clearly have very limited knowledge of Pricing and Revenue Management. If computers did everything, why would UA and other major US airlines bother to have large teams of PRM analysts? For one, fares are filed through ATPCO by analysts, not computers, just so that you know. And on the inventory side, the links or influences that the RM systems use to optimize are still controlled by inputs of the inventory analysts.

Overall, your analysis fails to capture key PRM facts. Advance purchase restrictions are controlled by pricing analysts while the inventory analysts should be competent enough to know that you won't fill 60% of an A319 with $300 one-way and higher fare buckets on an offpeak period like early Sunday morning on a route like FLL EWR. Do you honestly believe that an empty plane FLL EWR met the analyst's forecast for that flight???? You incorrectly make references to the O&D model since the FLL EWR flights were empty and those would have been the legs needed for connecting passengers for domestic or international routes from EWR. Even if the next legs were pretty full requiring most buckets to be closed, you can file fares specific to the passengers' O&D and still leave low fares for those just needing FLL EWR. Airline systems are already built to recognize when the same bucket isn't available on two or more legs to ensure that revenue is optimized when connections are involved without killing your local traffic in this case FLL EWR.

The weather was fine that day and there was an equally empty flight before and after my flight. You think UA was holding back so much space all day on the odd chance of bad weather?

Last edited by fly747first; Apr 12, 17 at 11:05 pm
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Old Apr 12, 17, 11:27 pm
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Originally Posted by fly747first View Post
For one, fares are filed through ATPCO by analysts, not computers, just so that you know. And on the inventory side, the links or influences that the RM systems use to optimize are still controlled by inputs of the inventory analysts.
Fares are filed by people. Most (not all) inventory adjustments are done by computer. Yes, the analysts control some of the inputs, but there's a ton of automated data mining, and associated machine learning, involved as well. For all we know, UA could have been testing out a new algorithm on that particular day and route.

Originally Posted by fly747first View Post
You incorrectly make references to the O&D model since the FLL EWR flights were empty and those would have been the legs needed for connecting passengers for domestic or international routes from EWR. Even if the next legs were pretty full requiring most buckets to be closed, you can file fares specific to the passengers' O&D and still leave low fares for those just needing FLL EWR. Airline systems are already built to recognize when the same bucket isn't available on two or more legs to ensure that revenue is optimized when connections are involved without killing your local traffic in this case FLL EWR.
You've got my argument backwards. By offering cheap seats on FLL-EWR, they would have deprived themselves of the opportunity to sell, e.g., FLL-LHR; they may have elected to restrict the discount inventory on FLL-EWR in order to keep inventory on FLL-EWR available for higher-margin connecting fares. And, yes, I'm aware that, from the perspective of the inventory they publish to the GDSes, they can offer different availability on FLL-EWR and FLL-EWR-LHR. But they still have to have a seat in which to put the passenger.

Keep in mind -- I'm not saying that they successfully maximized their profit on that flight. I'm just saying it's a more complicated picture than you're painting.

Originally Posted by fly747first View Post
The weather was fine that day and there was an equally empty flight before and after my flight. You think UA was holding back so much space all day on the odd chance of bad weather?
I didn't know when your flight had been. There was a series of east-coast storms a few weeks back that offered waivers on EWR flights. One of the things they do when they're expecting bad weather is restrict discount inventory in order to save seats for displaced passengers.

I doubt this discussion is going to get us anywhere. You may be right; UA may have hired a group of people who don't know what they're doing, and they may have a management team in place who doesn't recognize this fact. I will continue to believe, to the contrary, that RM is an inexact science, and that I don't have as much data at my disposal as UA does.
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