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It looks like AA is using the retail price of these flights when calculating how much money these customers are costing them, instead of the actual cost. What'
by learc83 15y ago
It looks like AA is using the retail price of these flights when calculating how much money these customers are costing them, instead of the actual cost.
What's the actual cost in terms of fuel, service, and occupied seating?
The only way using the retail price makes sense is for fully booked flights, and since first class is rarely full, AA's numbers look extremely inflated.
- potatolicious 15y ago> "What's the actual cost in terms of fuel, service, and occupied seating?" I have some familiarity with airline pricing... and the answer is... very close to the retail price of said flight. Seriously, there's a good reason why airlines are always teetering near bankruptcy. Their margins are lower than even cut-rate retail. Slightly OT, but it's also the reason why Hipmunk doesn't stand a chance in the long run unless they branch out into selling, well, things that aren't flights. The margins for resellers is practically non-existent. > "and since first class is rarely full" Ah, but first class is almost always full. Few people who fly in first actually pay for first-class fare. First class, in its modern incarnation, is more of a loyalty tool than an actual product. How many business travelers do you see in First nowadays? And how many work for companies that would actually pay for a First-class fare? Not too many. Airlines use first class seats to curry loyalty from frequent flyers, along with alliance benefits for frequent international travelers.
- tptacek 15y agoSpecifically: airlines use first class seats to get business travelers to book flights on their airline at higher coach fares when many lower fares are available on other airlines.