5 ms·

>implying the flights stayed 80% full after new seats were added >implying decreased customer satisfaction didn't hurt their revenue >implying their systems d

by verroq 13y ago

>implying the flights stayed 80% full after new seats were added >implying decreased customer satisfaction didn't hurt their revenue >implying their systems didn't need to scale because of increased customers >implying their R&D on smaller legroom didn't cost anything >implying upgrading planes didn't cost anything >implying more customers on planes didn't have an impact on maintenance costs >implying revenue means anything when you don't know the profit margins

patio11 13y ago
The prevailing theory among air carriers is that demand for flights is totally exogenous to the industry and allocation of flights between carriers in the industry is, for most customers (e.g. not frequent business travelers, who are price insensitive and care about mileage), dependent pretty much solely on price. Accordingly, minor decreases in comfort which add capacity are pretty much an auto-win. Many people dislike this conclusion and dispute it's factual accuracy because they don't want to believe that they'll predictably increase their own agony to shave $5 off a ticket. But, well, non-experts opinion of their own behavior often does not have 1 to 1 correspondence with reality which is tractable to measurement with numbers.
- glurgh 13y ago
  But that's not, strictly speaking, SWA's theory in entirety. SWA's policies and customer service are typically better than those of many of their larger competitors. You might be inclined to take the budget flight you were promised in exchange for not being nickel-and-dimed or treated like a sack of potatoes. Price is a major driving factor but I don't think Southwest continues to be competitive simply on the basis of price - Shuttle by United was aggressively price competitive (http://en.wikipedia.org/wiki/Shuttle_by_United http://en.wikipedia.org/wiki/Shuttle_by_United) and still ended up failing, for instance.
- tiredofcareer 13y ago
  For most customers, maybe, but I suspect there's a pretty sizable portion of the population (myself included) that will happily pay more for an airline that treats me extraordinarily well, considers my comfort while on board, and gives me reasons to shout their name down the street. For example, Virgin America is one of those airlines for me, and I will happily pay a premium to fly one of their tragically few routes (they're one of the few airlines I fly first on, as well). I blacklist Southwest entirely because of the complete disregard for my experience shown on the three miserable flights I've had with them. I don't think I fit in your business bucket, but that's a data point, at least. In another industry where profit is the focus, domain registration, I'm absolutely dying for a $100-$200/year registrar that knows what they're doing and isn't awful to deal with. I will happily pay that premium since my hosting bill far outweighs my domain registration, and handling support tickets expediently and providing features I want are far more important than the bottom line to me. If an extra $10/year from all customers means I get IPv6 glue or a ticket answered inside of 72 hours, please, do it! (This is less relevant now, but was a concern for me in the past.) I'm willing to part cash to be treated better in almost all cases.
  - rdl 13y ago
    For domain registration at the $100-200/yr range, just become a Tucows/OpenSRS reseller yourself. You get a lot of power to do things, minimal hassle, etc. I own maybe 200 domains (because I tend to get all variations of the ones I use) and it's totally worth it (and still only $7-8/domain/yr)
  - Shivetya 13y ago
    that is what business and first class are for. You want to be treated well you pay up. Really the rest are just baggage for the most part. At least airline travel hasn't turned into bus travel lets of atrocity and indignities.
  - michaelt 13y ago
    For most customers, maybe, but I suspect there's a pretty sizable portion of the population (myself included) that will happily pay more for an airline that treats me extraordinarily well, considers my comfort while on board, and gives me reasons to shout their name down the street. I'm not an air travel expert, but as I understand it many airlines offer seats in classes such as 'economy', 'business class' and 'first class' with differing prices and comfort levels. Isn't there both demand and supply for higher comfort levels at higher prices? When you fly, do you pay a premium for business class or first class accommodation?
    - seanmcdirmid 13y ago
      The difference between economy and business class is 3-5X. Its like a completely different world/price level, that those of us stuck in economy can only dream of. To sleep on a 12 hour flight...that would be great!
      - kunai 13y ago
        I don't understand why economy is so berated by passengers. It's fine for me; I'm 5' 11" and I have plenty of legroom and the people I sit with are generally polite and well-groomed. All of the nightmare stories I hear just do not make sense to me. Perhaps it's because I fly internationally; and people are more willing to be neater. Although, I must say one last thing: do not bring an infant onto the plane. They're messy, hard to deal with, and give everyone a headache in an enclosed area where you can never get any peace. My parents had the sense to keep me offboard until I was 4. I think all parents should do so.
- sharkweek 13y ago
  As a tall guy I like to complain about airplane seating all the time. Once in a while I'm able to coax them into giving me an exit row; but that's beside the point. Even with my height, I have not bought a plane ticket in the past 10 years with any brand loyalty or concern for comfort whatsoever. I don't even really care about the airline's track record of promptness, because the odds are still mostly in my favor it won't happen to "my" flight. I fly on whatever airline [insert flight pricing aggregation service here] says is the cheapest for my itinerary, maaaaybe taking into consideration that I might pay a bit more for nonstop, but even then sometimes if it means saving 50 bucks, for some reason I'm willing to go through the trouble of a multi-stop flight.
  - SomeCallMeTim 13y ago
    > I fly on whatever airline [insert flight pricing aggregation service here] says is the cheapest for my itinerary Then you must not fly Southwest, since they refuse to pay fees to "free" aggregation services, and you therefore have to buy the tickets direct.
- SomeCallMeTim 13y ago
  Well, I'm not a statistic, then. I stopped flying United because I don't fit comfortably in their "normal" seats; they took the inches from the "normal" seats and put them in "Economy Plus" rows. And, oops, you can't RESERVE an Economy Plus row when you buy a ticket, you need to upgrade later, and then one might not be available. I've even paid the upgrade and had them refund it when they overbooked the Economy Plus section. And since the normal seats are too small, that's just miserable. So yes, a decrease in comfort has caused me to boycott an airline. But maybe they just want shorter people anyway since they'll weigh less.
- lifeisstillgood 13y ago
  I recently bought an uncomfortable flight - mostly because there was no information on legroom on the purchasing system (designed in '70s and wrapped in web goodness) Ultimately until the information to differentiate between flights is provided at POS all anyone can judge on is price. A poster below has enough flight experience to know that United has less legroom and he is willing to pay a premium to avoid that. However that is only because he has external to the transaction knowledge. If airlines want to differentiate their products they need to differentiate from POS backwards. That is a reworking of a vast network of affiliate sales. Maybe they could do it (anyone can book online) but I doubt anyone will take the risk
  - ojbyrne 13y ago
    http://www.seatguru.com/ http://www.seatguru.com/
    - lifeisstillgood 13y ago
      Like I said knowledge external to the transaction. Take their info, place it in the SABRE (?) booking system and allow seat prices to vary by legroom and then airlines are competing on something other than price. (To be honest I expect there are things they will find more useful to compete on) Plus - when I have to wade through 100 differen options of legroom, childcare, airport parking and fligh routes I will pray for a return to the old days. I have a sneaking suspicion the airlines are right - we do just see them as a bus from A to B.
deleted 13y ago
[deleted]
- patio11 13y ago
  Fuel costs are essentially linear with regards to weight, and accordingly dominated by putting several hundred tons of metal in the air. After you've made that decision, adding a marginal passenger is much, much, MUCH cheaper than the price of a ticket. The margins approach that of the last customer added to a SaaS company. (!) Airlines occasionally obscure this with regards to their public pricing rationales for extra luggage, but that is almost solely an ops/revenue-maximization problem for the airline rather than being sincerely a proportional response to the additional marginal cost of putting another bag in the air.
  - peter_l_downs 13y ago
    Makes sense. Thanks for the correction.
AJ007 13y ago
Ah, faulty assumptions (and in this case a mathematical equation leaving out a critical piece) leading to surprising numbers. Why stop at 1" and not take all 31? Unlimited money.
- lancedouglas 13y ago
  Awesome... lol

by verroq 13y ago

patio11 13y ago

The prevailing theory among air carriers is that demand for flights is totally exogenous to the industry and allocation of flights between carriers in the industry is, for most customers (e.g. not frequent business travelers, who are price insensitive and care about mileage), dependent pretty much solely on price. Accordingly, minor decreases in comfort which add capacity are pretty much an auto-win. Many people dislike this conclusion and dispute it's factual accuracy because they don't want to believe that they'll predictably increase their own agony to shave $5 off a ticket. But, well, non-experts opinion of their own behavior often does not have 1 to 1 correspondence with reality which is tractable to measurement with numbers.

glurgh 13y ago
But that's not, strictly speaking, SWA's theory in entirety. SWA's policies and customer service are typically better than those of many of their larger competitors. You might be inclined to take the budget flight you were promised in exchange for not being nickel-and-dimed or treated like a sack of potatoes. Price is a major driving factor but I don't think Southwest continues to be competitive simply on the basis of price - Shuttle by United was aggressively price competitive (http://en.wikipedia.org/wiki/Shuttle_by_United http://en.wikipedia.org/wiki/Shuttle_by_United) and still ended up failing, for instance.
tiredofcareer 13y ago
For most customers, maybe, but I suspect there's a pretty sizable portion of the population (myself included) that will happily pay more for an airline that treats me extraordinarily well, considers my comfort while on board, and gives me reasons to shout their name down the street. For example, Virgin America is one of those airlines for me, and I will happily pay a premium to fly one of their tragically few routes (they're one of the few airlines I fly first on, as well). I blacklist Southwest entirely because of the complete disregard for my experience shown on the three miserable flights I've had with them. I don't think I fit in your business bucket, but that's a data point, at least. In another industry where profit is the focus, domain registration, I'm absolutely dying for a $100-$200/year registrar that knows what they're doing and isn't awful to deal with. I will happily pay that premium since my hosting bill far outweighs my domain registration, and handling support tickets expediently and providing features I want are far more important than the bottom line to me. If an extra $10/year from all customers means I get IPv6 glue or a ticket answered inside of 72 hours, please, do it! (This is less relevant now, but was a concern for me in the past.) I'm willing to part cash to be treated better in almost all cases.
- rdl 13y ago
  For domain registration at the $100-200/yr range, just become a Tucows/OpenSRS reseller yourself. You get a lot of power to do things, minimal hassle, etc. I own maybe 200 domains (because I tend to get all variations of the ones I use) and it's totally worth it (and still only $7-8/domain/yr)
- Shivetya 13y ago
  that is what business and first class are for. You want to be treated well you pay up. Really the rest are just baggage for the most part. At least airline travel hasn't turned into bus travel lets of atrocity and indignities.
- michaelt 13y ago
  For most customers, maybe, but I suspect there's a pretty sizable portion of the population (myself included) that will happily pay more for an airline that treats me extraordinarily well, considers my comfort while on board, and gives me reasons to shout their name down the street. I'm not an air travel expert, but as I understand it many airlines offer seats in classes such as 'economy', 'business class' and 'first class' with differing prices and comfort levels. Isn't there both demand and supply for higher comfort levels at higher prices? When you fly, do you pay a premium for business class or first class accommodation?
  - seanmcdirmid 13y ago
    The difference between economy and business class is 3-5X. Its like a completely different world/price level, that those of us stuck in economy can only dream of. To sleep on a 12 hour flight...that would be great!
    - kunai 13y ago
      I don't understand why economy is so berated by passengers. It's fine for me; I'm 5' 11" and I have plenty of legroom and the people I sit with are generally polite and well-groomed. All of the nightmare stories I hear just do not make sense to me. Perhaps it's because I fly internationally; and people are more willing to be neater. Although, I must say one last thing: do not bring an infant onto the plane. They're messy, hard to deal with, and give everyone a headache in an enclosed area where you can never get any peace. My parents had the sense to keep me offboard until I was 4. I think all parents should do so.
sharkweek 13y ago
As a tall guy I like to complain about airplane seating all the time. Once in a while I'm able to coax them into giving me an exit row; but that's beside the point. Even with my height, I have not bought a plane ticket in the past 10 years with any brand loyalty or concern for comfort whatsoever. I don't even really care about the airline's track record of promptness, because the odds are still mostly in my favor it won't happen to "my" flight. I fly on whatever airline [insert flight pricing aggregation service here] says is the cheapest for my itinerary, maaaaybe taking into consideration that I might pay a bit more for nonstop, but even then sometimes if it means saving 50 bucks, for some reason I'm willing to go through the trouble of a multi-stop flight.
- SomeCallMeTim 13y ago
  > I fly on whatever airline [insert flight pricing aggregation service here] says is the cheapest for my itinerary Then you must not fly Southwest, since they refuse to pay fees to "free" aggregation services, and you therefore have to buy the tickets direct.
SomeCallMeTim 13y ago
Well, I'm not a statistic, then. I stopped flying United because I don't fit comfortably in their "normal" seats; they took the inches from the "normal" seats and put them in "Economy Plus" rows. And, oops, you can't RESERVE an Economy Plus row when you buy a ticket, you need to upgrade later, and then one might not be available. I've even paid the upgrade and had them refund it when they overbooked the Economy Plus section. And since the normal seats are too small, that's just miserable. So yes, a decrease in comfort has caused me to boycott an airline. But maybe they just want shorter people anyway since they'll weigh less.
lifeisstillgood 13y ago
I recently bought an uncomfortable flight - mostly because there was no information on legroom on the purchasing system (designed in '70s and wrapped in web goodness) Ultimately until the information to differentiate between flights is provided at POS all anyone can judge on is price. A poster below has enough flight experience to know that United has less legroom and he is willing to pay a premium to avoid that. However that is only because he has external to the transaction knowledge. If airlines want to differentiate their products they need to differentiate from POS backwards. That is a reworking of a vast network of affiliate sales. Maybe they could do it (anyone can book online) but I doubt anyone will take the risk
- ojbyrne 13y ago
  http://www.seatguru.com/ http://www.seatguru.com/
  - lifeisstillgood 13y ago
    Like I said knowledge external to the transaction. Take their info, place it in the SABRE (?) booking system and allow seat prices to vary by legroom and then airlines are competing on something other than price. (To be honest I expect there are things they will find more useful to compete on) Plus - when I have to wade through 100 differen options of legroom, childcare, airport parking and fligh routes I will pray for a return to the old days. I have a sneaking suspicion the airlines are right - we do just see them as a bus from A to B.

deleted 13y ago

[deleted]

patio11 13y ago
Fuel costs are essentially linear with regards to weight, and accordingly dominated by putting several hundred tons of metal in the air. After you've made that decision, adding a marginal passenger is much, much, MUCH cheaper than the price of a ticket. The margins approach that of the last customer added to a SaaS company. (!) Airlines occasionally obscure this with regards to their public pricing rationales for extra luggage, but that is almost solely an ops/revenue-maximization problem for the airline rather than being sincerely a proportional response to the additional marginal cost of putting another bag in the air.
- peter_l_downs 13y ago
  Makes sense. Thanks for the correction.

AJ007 13y ago

Ah, faulty assumptions (and in this case a mathematical equation leaving out a critical piece) leading to surprising numbers. Why stop at 1" and not take all 31? Unlimited money.

lancedouglas 13y ago
Awesome... lol