Route pricing and load factor

[entc]

Right now i'm selling LHR-MIA tickets for Y - 10 $, C - 30 $, F - 50 $.
Even at these low prices my load factor is only 39 % in a MD-11.
Go figure...

[Sami]

How's the pax demand on the route? And competition... Your company image, flight times, route frequency (how many times a week) and so on?

[Kontio]

It's a huge route with several major airlines competing for the passengers. You may not be the only one dumping prices.

[bigdogshark62]

Okay, so here's MY question on the subject...

I'm the only airline flying certain routes with passenger demand of 500+ passengers.  I'm flying during the day, so considered "peak times."  But even if I drop my price to $50 each way on a 1000 nm flight, I can't get the load factor over 65%.   

Can someone explain THAT to me?  If 500 people want to go from point A to point B, and only one airline flies that route, shouldn't they have to pay whatever that airline charges (as long as it's not over-the-top)?  And if I drop the price to 1/4 of the original price quoted (as I have now), shouldn't demand respond in kind (especially as there is no competition on the route)?

Just wondering...  Still making money (knock on wood), but would be making a lot more money if I didn't have to let the good people fly for darn near FREE...   

[Sigma]

What's your Route Image?  And, to a lesser extent, your Company Image?

Your pax demand figure is how many your route analyst tell you want to fly that route.  But if they don't know that you even service that route, they'll just drive or whatever.  You've got to have a good route image to get much above about 75% usually no matter the price.  If they don't know you're there, doesn't matter if you're giving tickets away for free.

Company image plays a lesser role in an uncontested route.  They don't particularly care what carrier they fly if there's only one.  But they don't know that there's any carrier there at all if you don't have good route image.

[bigdogshark62]

Okay, so it's a relatively new route.  But I started marketing before I even got the plane to fly the route, so while it may take a while for the route image to pick up, they know I'm there if I'm doing the marketing. 

Company image is not a problem.  I'm in the mid 70's and still moving upward slowly. 

As for them driving, I don't think that's an option...  These are islands out in the Atlantic...  They could try to drive, but it'd get a little damp in the car.      

I guess route image is a big factor, but I don't know if it should be tweaked a little for an airline that starts on an unserviced route, markets it beforehand, and does everything right. Look at Virgin or Southwest or Easy or Ryanair...  They market ahead of time, make sure people know they're there, and the people flock to the gates.  In this sim, though, we market, let the people know we're there, and start out with 30% loads.  I don't get it. 

I've started service on unserviced routes with a 100 person demand, and got 90% loads right away (without marketing).  But for routes that have demand of 200-500 people, I started with 30% loads (sure, they're up to about 65% now).  Doesn't quite make sense to me.  One time, and I'd chalk it up to a tough market.  But it seems to happen more often than it should (in markets like Dallas, New York, Madrid, etc.). 

Not that I'm whinging or anything...  I just want to survive through to the 1990's.

[blair21088]

I had 75 CI, 100 route image, and $10 tickets on Singapore-Bangkok and I never got above 30% load factor. There was massive over capacity form other airlines, but you'd think 100 RI a fairly high Ci and extremely cheap tickets would do better than 100 seats, but that's not how it works apparently.

I had A300-600s twice daily with 300 seats each.