Upfront Fares

[tadjr]

Saw today in DRS that the company is running a test in 4 cities (MCO/DFW/DEN/SEA) for about a month to offer unsold/unupgraded First Class seats at the gate at departure time for (currently) $50 per 500 mile segment, $100 for 1000 miles ($150 from DEN and $200 from SEA). Isnt this a revenue generating plan that we had discussed here a couple of months ago? America West does it now. It only will occur at the gate after all the revenue customers on the upgrade list have cleared and the flight is boarding. Almost all types of revenue tickets appeared eligible including FF awards, RTFCs, and several of the currently non upgradeable tickets we have. I say about time! Lets hope the test works and we can implement it systemwide to get some $ coming in.

 

[BoeingBoy]

tadjr,

Maybe the CCY lurkers are paying attention after all - that idea was discussed here a while back. Who knows - maybe they'll suddenly discover some of the other ideas that have been tossed around this forum.

Jim

 

[TJoe]

Alaska does the $50 upgrade and first is always full. It seems to work very well. Good luck to USAir employees. You have always been the best company by far for me to jump seat on. Best regards-- Joe

 

[NVFlyer]

AirTran does this also. An extra buck is always better for the bottom line...

 

[USFlyer]

With First class being what it is these days, I'm glad US is finally doing this. Since so few people actually pay F, I think this is a great marketing move on US's part. Now, let's see if they actually market it.

 

[Hope777]

I also agree that this is a smart move. National was doing this as well and even though they failed, First was often full on the longer haul legs. More money is better then no money.........

 

[tinpadro]

Buying last minute First class works pretty nice at UA for the minimal amount but I am curious as to how much devaluing you can do for First class to even offer it.

If you have an aircraft with First Class and no one pays for the true cost beacuse they upgraded or attained the cabin for free on points then you will have a tough time pricing the rear of the cabin. There are up to 20 fares and more sometimes in the rear when little price points in frist class. Due to the Devaluing of upper class like first or business through other perks there is a quandry as to pricing the true cost for the leg to be flown. I am not sure what the answer is but I hope this idea helps some.

 

[TomBascom]

Buying last minute First class works pretty nice at UA for the minimal amount but I am curious as to how much devaluing you can do for First class to even offer it.

If you have an aircraft with First Class and no one pays for the true cost beacuse they upgraded or attained the cabin for free on points then you will have a tough time pricing the rear of the cabin. There are up to 20 fares and more sometimes in the rear when little price points in frist class. Due to the Devaluing of upper class like first or business through other perks there is a quandry as to pricing the true cost for the leg to be flown. I am not sure what the answer is but I hope this idea helps some.

Remember that these are seats that are going to leave empty -- paid fares and upgrades of all sorts have already cleared. So every penny collected is pretty much gravy (less the drinks and the snack basket...)

But as to "true cost" -- according to the 10k an award trip is a liability of about $16 (which is basically the incremental cost of carrying that passenger). You could think of the otherwise empty F seat as being about 75% larger than a coach seat (I'm being generous...) and thus "costing" about $28 to put a passenger into (on a round-trip basis.) If we want to go overboard and be really generous about what the cost of the food and drinks is we might come up with a "true cost of an F seat" at about $50 (round trip).

 

[BoeingBoy]

Hi Tom,

One factor to consider is that the pax is already on the airplane - it's just a question of which seat they'll sit in. Therefore, there is no incremental cost of actually carrying the pax. The cost would be agent time in paperwork and collecting the money (which would be the same regardless of segment length). Plus, of course, the other items you mentioned which could vary depending on segment length.

The one thing I noticed in the post that started this thread is the cost on the longer segments. It seems a little high, but I have no idea what other's are charging.

Jim

 

[ITRADE]

I actually think you'll get some people to bite.

Folks will periodically carry fragile/expensive items as carry on luggage. For those who are uber paranoid, the near guarantee of close-by overhead space and early boarding would be enticing.

 

[TomBascom]

One factor to consider is that the pax is already on the airplane - it's just a question of which seat they'll sit in.

That was the point of my 1st paragraph -- the rest of it was just to pre-emptively debunk the notion that an F seat is intrinsically "worth" a whole lot of money.

I agree -- the price points seem wrong. I could see something like $50 for short hauls and $100 for long hauls as being pretty sensible (and a lot simpler to market). $150 might make sense for Envoy to Europe -- but DEN to PHL with the snack basket? That doesn't really compute...

I guess they have to start somewhere in order to figure it out but I hope it isn't yet another self fulfilling prophecy "experiment".

Is it going to be advertised or at least announced in an e-mail to all DM members or are people just supposed to read minds to know that it's available?

 

[tadjr]

Is it going to be advertised or at least announced in an e-mail to all DM members or are people just supposed to read minds to know that it's available?

Its currently being tested in only the 4 cities so (surprisingly) they havent had a big announcement in case they have to tweak/cancel the program and have everyone wondering what happened. If the flight qualifies for the program, the agent at the gate is to make the announcement now. Not sure how they will handle it if it becomes systemwide. Maybe just make an announcement like they are currently doing, that way the gate doesnt have 50 people on standby for upgrade if it doesnt end up being full.
I like that it is open to ANY revenue ticket. You might have someone on an award ticket or RTFC that is willing to spend some money on a bigger seat since they got a "free" ticket already. I think it will do good in quite a few markets.

 

[BoeingBoy]

Sorry Tom, I misread/misunderstood the first part. I think you're definitely being "generous" on the incremental cost - I'd say something like $30 on a long-haul (higher on Envoy). I'm assuming $2 - $10 credit card processing fee for the payment, $15 for food (if you get any on the flight), $5 for the alcohol (5 drinks @ $1 each). The rest should be pure profit.

Jim

 

[TomBascom]

Is it going to be advertised or at least announced in an e-mail to all DM members or are people just supposed to read minds to know that it's available?

Its currently being tested in only the 4 cities so (surprisingly) they havent had a big announcement in case they have to tweak/cancel the program and have everyone wondering what happened. If the flight qualifies for the program, the agent at the gate is to make the announcement now. Not sure how they will handle it if it becomes systemwide. Maybe just make an announcement like they are currently doing, that way the gate doesnt have 50 people on standby for upgrade if it doesnt end up being full.
I like that it is open to ANY revenue ticket. You might have someone on an award ticket or RTFC that is willing to spend some money on a bigger seat since they got a "free" ticket already. I think it will do good in quite a few markets.

I'm a bit confused by your terminology -- on the one hand you say it's available to "any revenue ticket" and then that it's also available to "an award ticket or an RTFC"?

I'm assuming that you really mean "all tickets" which, I agree, is a very wonderful thing.

I just hope it doesn't flop due to a poorly designed test phase -- I know nothing about how it's actually being done so feel free to enlighten me but what little I've heard about previous "experiments" with fares and the like leads me to wonder if these things aren't setup to fail from the start.

 

[sfb]

Delta also has been doing this for quite a while; the gate agent (or the new automated announcements/gate display screen) announces that there are standby upgrades available for $X, where X is proportional to the stage length, but passengers in L, U, and T generally are ineligible to upgrade. I agree that it's a good idea from a revenue perspective for the airline, since the passenger AND the empty first class seat are going to be flying anyway, and the only incremental cost is for a bit of food and/or alcohol. I think that it is difficult to argue that two hours in a wider seat with slightly more leg room and no meal from CLT to LGA is truly worth $700.

You're giving the F seats away to the Preferred customers already, and it seems that very few folks actually book in F to begin with. I suppose it's not so great for non-revs if paying passengers start hogging up all the seats in F, though...