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Kirby says passengers choose price over seat pitch

Kirby says passengers choose price over seat pitch

Old May 29, 17, 10:20 am
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Kirby says passengers choose price over seat pitch

https://skift.com/2017/05/26/united-...coach-seating/

“Seat pitch has come down,” Kirby said. “But seat pitch has come down because that’s what customers voted with their wallets that they wanted. I know everyone would tell you, ‘I would like more seat pitch.’ But the history in the airline industry is every time airlines put more seat pitch on, customers choose the lowest price.”

Last edited by WineCountryUA; May 29, 17 at 10:52 am Reason: Quote added per FT rules "Posts containing such links should contain enough information so as to be contributive "
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Old May 29, 17, 10:23 am
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He's got a valid point in that travelers vote with their wallet. At least E+ is still an option.
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Old May 29, 17, 10:24 am
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Not quite. He said that passengers have historically chosen price over more space. Sadly true. That's why carriers like Spirit and Ryanair thrive. A large number of customers make choices based solely on price.
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Old May 29, 17, 10:29 am
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Yet supposedly he looks at Southwest as a benchmark.

But he's talking about doing the opposite of many of the things Southwest does.
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Old May 29, 17, 10:34 am
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Passengers always say they wish pitch were better, or seats were wider, or more comfortable, etc. But when it comes down to it, they always seem to choose the opposite as soon as cost comes into the decision. If UA could sell out the plane offering only first class or even E+, they would configure their planes that way. But that's not the reality. So instead they have options for each type of traveler and their different desires when flying. Makes sense to me.

Last edited by WineCountryUA; May 29, 17 at 10:49 am Reason: Removed title comment after title updated
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Old May 29, 17, 10:42 am
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Kirby:

"If you take a row of seats off an airplane — you take 4 percent of the seats off the airplane — it costs the same amount to fly the airplane as it did before,” Kirby said. “You’re burning the same amount of fuel. You pay the pilots the same. Maintenance is the same. So you have to charge 4 percent more to make that break even. Customers have to be willing to pay more if they want more seat pitch. And the evidence is that they aren’t willing to.”

Hmmmmm.......if you take a row of seats off an airplane, you are subtracting the weight of the seats PLUS the weight of the passengers who would have sat in those seats PLUS the weight of the baggage PLUS less fuel to fly the lighter plane. How can the fuel burn be the same?
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Old May 29, 17, 10:44 am
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He's right.

Travellers have long voted with their wallets, and many, though not all, want lower pricing. It's why MRTC at AA didn't work, and it's why Spirit, Allegiant, Frontier, easyjet, Ryanair, Air Asia, etc. can thrive. It's also why E+, Comfort+, etc. can work (even why E+ worked at the same time AAs experiment didn't - it was some of the plane, not all of it) - those who choose to spend more for more legroom can, if can be offered as a perk to FFs, as well, but those who want low-cost tickets can get those, too. Also why the low-end basic fares in Y now work - if you want the lowest price, you can now get it. You just won't get everything else that comes with other Y fares.

If I had to guess, when AAs less legroom rows in the back of economy have a critical mass, they will be blocked for their basic economy equivalent fares, and competitors like UA will do the same thing - reconfigure similarly and hold these less-legroom seats for those on BE fares - doesn't mean BE will be guaranteed it, but a good chance they will get it. It makes sense - you don't want to have people paying regular fares - especially last minute buyers that are doing YBME kind of fares, getting the back set of less legroom seats, and if someone is paying less, they don't really have a reason to complain about getting the least desirable seats in the aircraft. Just what I think.
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Old May 29, 17, 10:52 am
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Originally Posted by DENviaLAX View Post
Passengers always say they wish pitch were better, or seats were wider, or more comfortable, etc. But when it comes down to it, they always seem to choose the opposite as soon as cost comes into the decision. If UA could sell out the plane offering only first class or even E+, they would configure their planes that way. But that's not the reality. So instead they have options for each type of traveler and their different desires when flying. Makes sense to me.
Any airline can sell an all FC flight if it charges a low enough price, but it's more profitable to instead sell lots of coach fares for tightly packed seats and perhaps smaller numbers of FC and business class seats with corresponding service.
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Old May 29, 17, 11:06 am
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While I agree with him to a point, he talks as if the airline industry isn't an oligopoly. He assumes the consumer has more purchasing power than they actually have in the airline industry. We don't often have that much choice. The big airlines are matching the seat pitch of others because that is classic oligopolist behavior.

Last edited by bitterproffit; May 29, 17 at 11:09 am Reason: too much blah blah blah
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Old May 29, 17, 11:17 am
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Both UA and many on FT confuse "customers" with "passengers". While in some instances, they refer to the same person, in many cases, the customer is not the passenger and the customer, e.g. employer or similar, is indeed more concerned about cost than pitch or other aspects of the product.

There were rants about the elimination of meals in Economy, charges for checked bags, and other services previously included in the cost of a ticket.

But, marketing studies reveal, almost uniformly, that customers opt for price and because most search engines sort by price in the first instance, it matters a great deal.
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Old May 29, 17, 11:19 am
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So where do the people who book the cheapest fares but do not know about the differences when it comes to seat width, leg room, meals, etc. fit into this equation? While those passengers are technically voting with their wallet, they simply do not know any better.
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Old May 29, 17, 11:29 am
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Originally Posted by bitterproffit View Post
While I agree with him to a point, he talks as if the airline industry isn't an oligopoly. He assumes the consumer has more purchasing power than they actually have in the airline industry. We don't often have that much choice. The big airlines are matching the seat pitch of others because that is classic oligopolist behavior.
I don't think the lack of competition has much to do with it. Since deregulation, offering a better hard/soft domestic product has seldom/never resulted in a US carrier being able to sustain higher prices or sell more seats than competitors. People just won't pay for it. Leisure travelers shop on price, high-margin business travelers mostly on route, frequency, perhaps price and reliability. Hence the steady downward pressure on product quality.
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Old May 29, 17, 11:36 am
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Originally Posted by bitterproffit View Post
While I agree with him to a point, he talks as if the airline industry isn't an oligopoly. He assumes the consumer has more purchasing power than they actually have in the airline industry. We don't often have that much choice. The big airlines are matching the seat pitch of others because that is classic oligopolist behavior.
Not really. Classic oligopolistic behavior is to attempt to differentiate one's product in order to make one's own demand function less price elastic.

Of course, we saw much more product differentiation in the airline industry when prices were regulated as airlines could only compete on schedule/frequency (leading to overcapacity and lots of empty seats on many routes) and product quality and other characteristics (meals, friendliness, seat, etc.)
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Old May 29, 17, 11:47 am
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^^^
Originally Posted by MSPeconomist View Post
Not really. Classic oligopolistic behavior is to attempt to differentiate one's product in order to make one's own demand function less price elastic.
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Old May 29, 17, 12:01 pm
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On long haul flights I'd pay for premium economy (can't afford J). However, UA doesn't offer that and I'm not flying the 777-300ER with 17 inch width long haul. Therefore, I'll book SQ.

I was thinking. Premium Economy is taking out a seat per row. So will UA make the 777-300ER 9 across and call it Premium Economy? That would be laughable.
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