To what extend are the influence of pax comfort on your airline? I don't mean by putting in high density seats but by putting in premium seats.
Does it just influence your route/company image? Or can you ask a higher price even if your image is already high?
You can either ask a higher price, or get more pax with the same price against your competitors.
As a stand alone (no competition and enough demand) you won't make as much money as you would if you had standard seats. The increased price doesn't cover all the lost passengers...
Quote from: Jps on November 03, 2010, 03:35:10 PM
You can either ask a higher price, or get more pax with the same price against your competitors.
As a stand alone (no competition and enough demand) you won't make as much money as you would if you had standard seats. The increased price doesn't cover all the lost passengers...
you're contradicting yourself....
The increased price doesn't cover the lost passengers? And you won't make as much money as you would if you had standard seats? where is the logic in that?
Quote from: tm07x on November 07, 2010, 05:12:12 PM
you're contradicting yourself....
The increased price doesn't cover the lost passengers? And you won't make as much money as you would if you had standard seats? where is the logic in that?
If you have premium seats, you can increase the price. But, that increased price will not cover the lost passengers. Those passengers are the ones you would have had more if you had standard seating. So, you don't make as much money.
Quote from: tm07x on November 07, 2010, 05:12:12 PM
you're contradicting yourself....
The increased price doesn't cover the lost passengers? And you won't make as much money as you would if you had standard seats? where is the logic in that?
It wasn't until recently that I think I figured out premium seating, so I may have this wrong. I think it is correct however and someone who knows more about it will hopefully confirm or rebuke this explanation.
"
As a stand alone (no competition and enough demand)" - That phrase was key in the post JPS made - premium seats on a route without competition will not earn you more money. Premium seats give you an edge (higher pax appeal) when someone else is taking your potential pax. Added comfort level increases your chances of drawing more pax to your flights. If no-one else is taking your potential pax (you are only airline running the route), pax will stop flying if you try and charge enough for the premium seats to cover the lower seating capacity.
Say your premium seat takes up 140% of the space a standard seat does on your plane. You need to charge 140% the standard seat price to break even on the deal (doesn't include your initial cost of adding the new plane config). Pax will not pay the increased ticket price while maintaining the same LF% for your flight, meaning operating with premium seats loses you potential revenue when you are looking at it from a purely dollar per trip viewpoint.
Having a competitor on a route can make premium seats worth something because you are using them to draw pax from the competitor, and even if not actually making more money from them than you did with standard seats, the implied value is there (running competitor bankrupt, slowing competitor expansion so slots are still open when your new planes arrive). Premium seats are for competition, making your LF% look nicer, and role-playing (running a premium service airline), not increased revenue.