Hey there,
I ran some very big and successful airlines, but I always use prices around standard or lower.
But now I heard one can charge standard prices +20% and get although good LF.
As I tried some time before Standard +5% (very big airline in ATB, good routes without or with only some competition), LF decreased a lot.
What are your experiences on this?
I guess it depends in a number of factors. I've no experience in this game and i'm most certainly not the one to go and ask.
But, my airline is quite new and focused on regional flights (all seats are standard Y). I spent 2 years with standard prices and then decided to rise the ticket price about 4%. LF dropped like 15% instantly, it was ok I guess so I would wait a couple of weeks to see what happens.
After 3 and a half weeks the progress was awful, LF still low and sometimes getting below 70s, income was not enough to cover my expenses.
My company had at the time nearly 40 CI and 100 RI. I suppose you need to have higher CI to rise the prices.
I found that using standard prices and reseting them every now and then would make the best cost effective utilization of my fleet, which its not bad at all.
I guess you have a higer CI so my advice is to rise ticket prices step by step and every time wait to the LF go up.
Just my 2 cents.
Seeing that I already sit on billions and billions of cash even while charging Standard pricing, I see absolutely zero reason to charge any more. That'd just be more money in the bank account with nothing to spend it on.
Maybe you can do it when you fly jumbojets with all 180 Y,C,F premium seats ;D
You can in no circumstances charge above the average price. Even not when your CI is 100% and you offer premium seats... It's crap and it should be changed. But till that moment we'll have to cope with what we have.
Quote from: Maarten Otto on August 11, 2010, 08:19:27 AM
You can in no circumstances charge above the average price. Even not when your CI is 100% and you offer premium seats...
Yes you can - especially in that case.
Well, I have a 100% CI and I am operating an A300 in premium seats... and guess what... load factors are well below 60%. Making the flight un-economically
Any competition on that route, and what are the prices actually? (current and std)
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Edit: actually I cannot find any A300/A310s from your airline that would have Premium seats. Only standards. (?)
I have some routes where I am waaaay over default... e.g. B744 LHR-DEL from 502$ (default) on 575$(actual) with 92.5% LF ;) and I have a lot of competition...
And I use all Standard seating ;)
Jona L.