leftysauce

Looking at certain routes, for example ORD-SEA 6/27, the lowest fare class available is U at $518/$484, and per ExpertFlyer, the lowest published and validated fare is K at $93+fees. This would make sense if the flight is very full but say for UA1945, the flight is only about 1/3 booked. Is UA intentionally zeroing out lower fare classes in this case? What could be UA's reasoning for this since it's close-ish to the departure and there isn't really anything happening in SEA afaik?

Picking another date that's not close to July 4th, say 7/19 same flight UA1945, it's selling at Q5 but K fare published at $93 and the flight is also only about 1/3 full.

gokeeper

Certain fare published doesn't mean UA will always make the booking class available. If UA believe they can sell all the rest seats at a higher price, they will simply zero out lower and usually cheaper booking classes.

rch4u

How do you know the flight is 1/3 booked? (Please do not say the seat map.)

leftysauce

Right but it's so close to departure though. Maybe there is a lot of last minute booking happening on this route.

I guess the public answer is I've got connections lol

jsloan

Yes.

They believe that they'll be able to sell enough tickets at these prices to make it a more profitable price point.

Trying to reverse engineer Revenue Management is an exercise in futility. We'r never going to be privy to all of the information that goes into these decisions, but the rationale is always the same:

1. Generate as much profit as possible
2. Prevent patterns in airfares that can be exploited by consumers.

Keep in mind that $93 in marginal profit is a big deal, but selling someone a $93 ticket if they would have paid $400 is foolish, and selling someone a $93 ticket and then not being able to sell someone else a $1200 ticket later is downright disastrous. (Pre-pandemic, United averaged about $500 net profit per flight).

3 weeks isn't the least bit close to departure. I travel mostly for leisure and, until this summer of horrific fares hit, I rarely purchased domestic travel much more than 3 weeks out -- that tended to be the sweet spot for fares (but see #2 above).

leftysauce

I guess they've succeeded lol

Is this per pax per flight or the entire flight?


right I was the same but I changed my behavior when fares (starting to) hit the fan back in Jan/Feb. Kirby did say they're upping the price to gauge the price point acceptance so I guess (hopefully) people will stop buying these ridiculous fares in a few months and RM will release more inventory.

Steve M

I'm the same way. In fact, I can't think of the last time when I booked that far out, whether it be for business or pleasure, short haul or half way around the world. I know that some people are advance planners (probably a lot of people), but it's always surprising when I see a comment along the lines of them not even considering that quite a few others plan trips only a few days/weeks in advance.

WineCountryUA

Appears all fare classes below E/U are zero, at least as a single segment. UA is just setting prices higher in the hopes get a higher net revenue.

Lux Flyer

So even if the flight is truly 1/3 full (since presumably your "connection" is someone work works for UA who can see currently booked loads), do you know what fares those ~60 people booked into? What if 20 of them already booked that K fare? Do you think UA wants to sell all the seats on this flight at 97.20? Obviously not which is why they use the fare buckets to control their revenue. If only U is available currently, they're betting they don't need to sell anything less than U fares to get this flight full by the time of departure, as it continues to get closer they can adjust that if their prediction ends up being off. But given they have K filings gointo to 14 days advanced purchase, L filings as close as 7 days adv purchase, and T filings as close as 3 days advance purchase, they have plenty of options to open lower fare buckets closer in, if their prediction ends up being off, without going all the way down to selling additional K fares.

leftysauce

right that's what I would think since the summer is here and it's the first summer since the COVID is over (?)

I'm not expecting K fares but they're still skipping a lot of letters there HQVWSTL.

Right looking at flights in the next week or two, they are all almost sold out so I guess RM is making a good be there

jsloan

Oops, sorry, my numbers are a little out of date. Using 2019 data, they made about $3BB in net income on about 1.8MM flights, so about $1,600 per flight. The $500 / flight number came from a few years earlier. (Of course, since the start of COVID, all airlines have been hemorrhaging money, but UA thinks they've turned the corner).

That's what I hope as well. At the moment, UA doesn't seem to be blinking much, although some prices are falling slightly as the travel date arrives. (I re-fared a flight yesterday to save $40).

leftysauce

damn that's still way lower than I imagined. This makes IDB comps extremely costly to airlines then wow

for some routes the fares are definitely dropping (but just not ORD-SEA for some reason).

Same. Did one last week at T-7 days as UA published lower fare and saved $60 (off $220) round trip.

Also as a reminder for everyone else, if you have Break from Business fare and you want to re-fare, you need to cancel, get an FFC and make a new reservation for the discount to apply.

WineCountryUA

Other view is about $20/passenger, very marginal profit per passenger and shifting that a bit can have a huge impact -- that's RM job.

Lux Flyer

Which is a curious paradox that they allow this (likely because most people don't take advantage of refaring on the whole). By opening up lower fare buckets, they're lowering the cost of the flight to help drive new bookings, but by refaring to a lower bucket you take up some of that space (potentially taking the last space in the lower bucket which opened), thus driving the price back towards where it was in the higher buckets, before they lowered it to drive new bookings.

jsloan

I mean, it's easy to understand why they try to obfuscate it.

I guess that's part of the equation -- how many passengers will refare, vs. how many new bookings will we get.