Calculus doesn’t tell you whether it will be sunny in Scottsdale on the day of the International Awning Manufacturers convention, whether the Saudis will sabotage an OPEC quota agreement, whether Boeing will forget to install cooling systems for the relays that operate the slats on the new version of the 777, or whether your pilots’ union will vote to strike next month.
In an ideal world of non-emotional entities this is true. In the real world, this is so far from being true that a strict application of it would put you out of business in a week.
First, this assumes the demand is there to always fill your plane. Planes are not expandable or contractible. They come in set sizes. Let’s say they are 50, 100, or 200 seats. You want the fewest variations in plane types, because that reduces the parts that must be in stock, the amount of training that mechanics and pilots have to have, and every other economy of scale. If you have a route that on average will generate 75 seats you need the 100 seat plane. You can set pricing to maximize profits but you can’t always guarantee that every flight will do so.
If not, then what? You can eliminate the flight altogether. That upsets passengers, who might start using your competitors for other flights as well. You can try moving the time of the flight, but the most desirable times are already filled to capacity and limited by the airport and flight controller’s ability to handle simultaneous landings.
There are a thousand more issues like this that have to be considered. Business, any and every business, is full of these decisions. Computers can plow through variants and determine what answers give the best monetary results and airlines are huge users; people are still necessary to judge the intangibles that people and emotions add that muddle up the nice, clean equations.
H. L. Mencken has your calculus down to an aphorism: “For every complex problem there is an answer that is clear, simple, and wrong.”
I’m not IFR rated, but I thought the IFR requirement was to have enough fuel to fly to the alternate airport plus 45 minutes. Can you clarify?
That’s the Part 61 (private flying) rule. Part 121 and Part 135 are more stringent, IIRC.
Thanks.
Bingo. They’re competing on price. There is a phenomenon, which I’ve long since forgotten the name of, which basically states that in situations of price competition, that prices will absolutely and without exception fall to the point where it’s just above where the sellers in the market are breaking even, and that “just above” is their profit margin, and it’s very small.
So when profit margins are so small, anything that cuts into them tends to make the product unprofitable, and as a result, airlines are vulnerable to things like severe weather, fuel price vagaries, labor issues, fleet-wide mechanical issues like FAA groundings, etc…
SWA is kind of like the Wal-Mart of airlines, in that they do their damnedest to drop costs and thereby generate a higher profit margin on competitively priced seats. That’s what things like all 737s, or short-hop flights, or really fast turnarounds accomplish.
With the profits being so low or non-existant , it makes me wonder why any new airline would even try to get into that market:D:D
Yes, I know that people will psychologically go for lowest cost more often but if there is a more convenient flight at 10% greater cost, I am taking that flight for the convenience
In my limited experience plane seats in Europe do not drop in price nearer the date. Rather the reverse. If you want to fly tomorrow, you may well have to pay the full price. Choose a Wednesday pm flight next month and you can get it ridiculously cheap.
Airlines want predictability so reward those who book in advance because a, that money is in their bank, and b, they can plan more effectively. Even if they have to fly to keep the slot (and to have the aircraft there for the return schedule) they can use larger or smaller planes.
There are three low cost airlines here and they don’t offer no frills, they offer a seat in a plane. Anything else, like checked luggage, food, drinks has to be paid for. They also do not fly to the airport you might expect. like Paris Orly rather than Paris CDG.
This is a weird psychology that is unique to the airline business. In all other type of business, people will choose a wide variety of levels of service, and pay in proportion to the quality they want.
People on vacation choose rental cars, which may be cheap, super-luxurious, or anywhere in between.
People on vacation choose hotels which may be cheap , super-luxurious, or anywhere in between.
People on vacation choose restaurants which may be cheap, super-luxurious, or anywhere inbetween.
But people choose flights ONLY if they are cheap. They make no other considerations.
There is no other consumer product where the public cares only about price, and not about quality.
*(yes, I know that business class exists…but virtually nobody uses it when they are on vacation and have to pay from their own pocket.)
Under Part 121 for domestic ops it’s 45 minutes plus fuel to the most distant alternate [sub](plus a few more pages of details).[/sub]
But an alternate is not always required. Sometimes we need zero, sometimes one, and sometimes two. I’d bet the guy who encountered the unexpected Blue Angels airshow was operating no-alternate. We try to do that whenever legal / prudent to save money. Depending on time of year and destination we’ll be running no-alternate anywhere from, WAG, 25% of flights to 100% of flights.
Before deregulation, airlines competed on amenities: More legroom, better meals, in-flight entertainment, sexiest stewardesses, and so on. Passengers could choose what they wanted. Now it’s all about the ticket price, and you basically have two choices: First class or Cattle class. I can’t remember the last time I saw Business class on a plane. I know it exists, but I haven’t personally seen it in over a decade. When it comes to price, First class is… what? Twice the price of Coach? I’d pay 10% more for my ticket for a coach seat with 34-inch pitch; but I’m not going to pay 100% more for First class.
Airlines can’t really set aside different airplanes for different amenities. What if there aren’t enough people willing to pay 10% more for their tickets for more comfortable seats? It makes more sense for them to cram as many people in as they legally can. Choices cost money, and it seems that we’re just down to two: First or Cattle.
I flew Alaska Airlines in May, and they’re offering amenities. Unlike earlier days when you could choose a flight with meals, or choose one without, or make other choices, and the cost was in the ticket price, Alaska (and I presume other airlines) are offering a la carte niceties. You can order a pretty nice in-flight meal. (I had the pulled pork sandwich.) You can rent a tablet for ten bucks to watch your choice(es) of a variety of movies and programs. You just can’t choose more room.
Just not true.
People choose flights for lots of reasons. Nonstop vs one or more stops. Reward points. Brand loyalty. Time of day of departure/arrival. Size or type of plane. Length of wait at a transfer point. Avoidance or preference of a hub. Baggage charges. Availability of preferred seating. Policies toward children, or oversized parcels, or kosher food, or other individual needs or wants.
Price is usually important. It may be decisive. But it’s not remotely near the only consideration.
There are definitely different categories of buyer who prioritize different things. There *is *a pretty large segment who are *very *price sensitive. Within that group there is a good-sized subset who don’t fly often enough to be skilled buyers or to have a well-formed opinion about the upsides & downsides to different carriers, routings, etc. But they can shop on price, and most 3rd party travel websites make that the default sorting assumption.
Those folks represent probably 75% of the folks going to tourist destinations in mid-summer and 20% of folks going to hardcore business destinations.
Ultimately, air travel is still a pretty expensive good for routine purchase by middle class folks. It’s not like a dinner at Appleby’s where they will splurge on dessert without sweating the $5.95 price for a grossly oversized pile of sugar.
In effect we have two industries: a commodity industry delivering a commodity product to a commodity-minded buyer at rock bottom prices with nil margins. And also a high-priced service industry selling a semi-personalized product to a service-minded customer at whatever price we can auction and counter-auction each other into agreeing on.
The miracle (or the madness depending on your POV) is delivering both products simultaneously using the same infrastructure & personnel.
Business class still exists as does economy plus. That said, I have personally never seem first class tickets for less than 3x the cost of a coach seat. On international flights it’s even more. A flight on United from New York to Tokyo is around $1650 for coach and around $13,500 for first class. That seems to be the norm in terms of the multiple on the international flights I’ve taken.
This is because every airline out there is the cheap option. Rich people who want to travel in luxury buy their own planes or charter a private jet. Or, if time isn’t an issue, take a cruise ship or passenger train. Or any other mode of transportation that isn’t a glorified cattle car.
Your cite would only refute harmonicamoon’s experience if the empty seats are evenly distributed across flights. They are not. There are some flights with low load factors but far more with high ones - and a person is clearly more likely to be on a flight with more people than on a flight with few people.
Those of us with flight benefits, but who are on the low priority standby list, are quite sensitive to this. Flights in Europe, and even many international flights, are easy to get on. Flights in the US are much harder, unless you choose time and route carefully.
The reason is the reduction of available seats which is the thing now being investigated.
Your $5.95 dessert is not grossly overpriced. Yes, the sugar in the dessert is cheap but the cost and the labor of making the dessert is NOT trivial when all the costs are added in
Please re-read my post for comprehension.
I never said anything about the price of the dessert being excessive. I said it was cheap enough that the typical customer considered it negligible in the context of their household budget.
I did say it was oversized. Which admittedly is a value judgment on my part. But one IMO well-supported by empirical data on US obesity.
Plus, business travellers are -depending on their companies’ policy to use airmiles gained on business flights privately - likely to book flights on the basis of frequent flyer programmes. In my view, many frequent flyer programmes are on the verge of collusion for malversation. I’ve seen people book ridiculously expensive intineraries even though a considerably cheaper (and just as, or almost as, practical) alternative would have been available, simply because the airmiles were more attractive. It’s other people’s money, after all.
I’ve never seen business class on an internal flight in the U.S., but when I fly long-haul international flights, the planes almost always have first, business and economy class – though often with different names in airlines based in Asia.