100% CI and still just 76% load factor

[Maarten Otto]

Okay, I have a 100% CI, my fleet is little then 11 years old on average and I use Standard fare +5%...   And still I have poor load factors.

Why?

[Curse]

Standard + 5%.

[Sigma]

Anything over standard fare will kill you 9 times out of 10.  You can get away with a percent or two if everything else is good, but the curve drops WAY fast on that one.

Personally I never go over Standard.  Never really go much below it for that matter either as experiment after experiment has shown the price drop to almost never be worth any (if any) LF increase, so net revenue declines virtually every time; nor is it particularly helpful in competition either.

[Sami]

In short: Company Image only is irrelevant when not knowing anything of the other variables affected. It's one of 10-20 things ...

[Jona L.]

The pricing should, and the price acceptance is extremely decided by competiton, and the size of the companies flying the route.

If you run a small airline (say 20 planes) and compete with a big airline (say >200a/c) on the same route, with the same a/c in the same configuration* the bigger airline can rise prices over default, and still get more PAX than you!
If I run a route completely my own (and I have >400a/c) I keep default for +/- 1mth, in order to make the route known by PAX, and than rise the calsses by 25-50$ (Y), 50-75$ (C), and 75-200$ (F) and still have 85%+ LFs!! but If you'd do that with a small airline, you'd have only 10-20% LF (in fact: making Huge losses)

You have to make the pricing dependent on: Your airline Size, Competition, Size of Competition, and Size of Competitions planes (and of course you plane's size) on the route** (just to give some raw basics, there are many more factors, that can be watched, but do not neccessarily need to be taken into account.

Jona L.
* Very constructed, and rarely given... was just to eliminate the other factors.
** In AWS it is modeled (I guess to support smaller airlines), that passengers prefer smaller planes, over bigger ones.

P.S. Hope that helps

[swiftus27]

You can't assume that you'd get 100% LFs unless you were the only one flying EVERY line.

My CI is 90 and my LF is 85%.  I use Standard - 10%.  I have a bunch of competition.  Many of my planes have comfortable seating above the standard level.  As Sami said, there are more factors than just CI.

[JumboShrimp]

You can't assume that you'd get 100% LFs unless you were the only one flying EVERY line.

My CI is 90 and my LF is 85%.  I use Standard - 10%.  I have a bunch of competition.  Many of my planes have comfortable seating above the standard level.  As Sami said, there are more factors than just CI.

Speaking of CI of 90, mine is stuck there now as well for some time.  It looks like it will take a bundle to to move it to 100.  From the feal of the game, I doubt I would get a positive return on the investment in marketing (from increased LF).  Is that why you are not working on increasing it?

But I really  wonder about something else - a competitive advantage.  Suppose everything (absolutely everything) is the same.  My competitor and I are flying exactly the same airplane, at exactly the same time, with exactly the same RI and we both have CI of 90.  So suppose we both have a LF of 60%.

Suppose I were to increase my CI to 100.  How much difference would you guess it would make on LF of both players on this competitive route?

[Curse]

Not enough to cover the costs.

I always run for CI 100, but not because it is worth it... I only don't like the number 90.