PE costs more than Polaris
#2
Join Date: Mar 2009
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Probably not an error. The lower fare buckets (R on outbound and A/R on return) of Premium Plus are not available. Yet, a lower business fare bucket (Z) is available on outbound and return.
#4
Join Date: Nov 1999
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The PE pricing is ridiculous at the moment including award redemptions, I've seen it everywhere. Some flights asking 120k award miles for PE (one-way). I don't know what they're thinking.
#6
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It is an anomaly and suggests the algorithm for selling PE is askew.
Last night I confirmed a GPU into Polaris on a flight that was PZ9 RN0 . . . so you could confirm Polaris business but only waitlist for Premium Plus
Last night I confirmed a GPU into Polaris on a flight that was PZ9 RN0 . . . so you could confirm Polaris business but only waitlist for Premium Plus
#8
Join Date: Aug 2009
Location: Houston, TX
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Posts: 416
While such a fare inversion is silly---no one would purchase the more expensive PE fare over a J fare unless the ticket is significantly more flexible---I suspect that the high prices are not an accident. I would bet that UA is hoping to charge a lot for these seats (that the $$/sq ft will average much more than economy, and maybe even higher than J).
I suspect some business travelers who used to purchase J seats are now going to be required to purchase PE. If the prices are high enough, those "downgrades" can be a win for UA. Who knows... over time, we may see a net migration of seats own from J and into PE.
It's interesting to me that the new PE seats are really just an updated and less comfortable version of the Pan Am business class ("Clipper Class") seats from the 80's (as I experienced when I was a kid and my dad's company flew us to Asia back in the day).
Ever since UA announced PE, I've felt that this could be the first step in the industry going back to the way things were at that time. J will be the new F, PE the new J, but the PE prices will be the same as the current J.
I suspect some business travelers who used to purchase J seats are now going to be required to purchase PE. If the prices are high enough, those "downgrades" can be a win for UA. Who knows... over time, we may see a net migration of seats own from J and into PE.
It's interesting to me that the new PE seats are really just an updated and less comfortable version of the Pan Am business class ("Clipper Class") seats from the 80's (as I experienced when I was a kid and my dad's company flew us to Asia back in the day).
Ever since UA announced PE, I've felt that this could be the first step in the industry going back to the way things were at that time. J will be the new F, PE the new J, but the PE prices will be the same as the current J.
#9
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This happened a lot with AC when they rolled out premium economy, and still happens to some extent. The cabins' inventories are managed differently.
Just this morning I was looking at a UA flight that was Z9 P0 Yx Bx M0. Z was a couple dollars more than B. If there had been P space, it would have been cheaper.
On AC, between the three cabins, I've seen situations where prices are completely inverted (Y $1500, PY $1300, J $1200), and every combination of absurdity. Excluding mistake fares, it's usually because of something like J9 P9 O9 A5 R0 Y3 B0.
Just this morning I was looking at a UA flight that was Z9 P0 Yx Bx M0. Z was a couple dollars more than B. If there had been P space, it would have been cheaper.
On AC, between the three cabins, I've seen situations where prices are completely inverted (Y $1500, PY $1300, J $1200), and every combination of absurdity. Excluding mistake fares, it's usually because of something like J9 P9 O9 A5 R0 Y3 B0.
#10
Join Date: Jul 2012
Posts: 1,115
They only have 3 RBD's for PE, while they have 5 for J and >10 for Y, making PE the hardest to differentiate, basically they're limited to low flex/mid flex/high flex with appropriate discount levels.
On the domestic market, they use differentials to prevent these shenanigans from happening, with premium cabin fares requiring dual inventory to prevent lowest F from ever being cheaper than lowest Y. However, INTL has 3 cabins, so to make sure lowest J is always higher than lowest PE which is always higher than lowest Y, they would need triple inventory fares for J, and I'm not sure that 1) I've ever seen that before 2) that is actually possible 3) this would go well on the INTL market and wouldn't create havoc when mapped to domestic or partner flights.
Wouldn't branded fares offer a solution to this problem? How is LH handling this?
On the domestic market, they use differentials to prevent these shenanigans from happening, with premium cabin fares requiring dual inventory to prevent lowest F from ever being cheaper than lowest Y. However, INTL has 3 cabins, so to make sure lowest J is always higher than lowest PE which is always higher than lowest Y, they would need triple inventory fares for J, and I'm not sure that 1) I've ever seen that before 2) that is actually possible 3) this would go well on the INTL market and wouldn't create havoc when mapped to domestic or partner flights.
Wouldn't branded fares offer a solution to this problem? How is LH handling this?
#11
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If their demand model is reasonable, this anomaly should still happen only rarely. I don't think they've got the model anywhere close to properly calibrated for the PE cabin. It's way too optimistic. Though I suppose if they're going to err based on a lack of history, there's a case to be made for pricing too high rather than too low, since they can always discount closer to departure.
#12
Join Date: Nov 2012
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It happened on BA too that sometimes the Premium Economy was more expensive than Club World and it was happening even more than 15 years after Premium Economy was installed. It was when there were very cheap Club World fares.
#13
Join Date: Jul 2012
Posts: 1,115
Protect J's premium pricing, cash in on PE but risk going out with J half empty: J9 C4 D0 Z0 P0 O1 A0 R0
Sell your in-demand cabin below value so you can keep selling and start filling the higher cabin, still at a premium vs the lower cabin: J9 C9 D9 Z4 P4 O1 A1 R1
Keep availability balanced with demand and forgo higher pricing on higher cabin (subject of thread): J9 C9 D9 Z9 P0 O1 A0 R0
Or do you mean that the fare pricing isn't optimized enough at this stage and that is where changes should be made?
#14
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If in practice UA is able to routinely sell out PE at a price that's higher than their available P or Z inventory, well more power to them. If they're able to do that, I presume they'll sell O all day long at full fare, and just op-up into J. But color me skeptical that's how this will play out. What I think is far more likely in these early days of PE is the J cabin will continue to sell as it more or less historically has, and the PE cabin will remain empty unless/until UA makes a reasonable amount of discount inventory available, particularly on flights where Z and P are still for sale.