STRATEGY of AIRLINE CLASSES: How Airlines Make Money

STRATEGY of AIRLINE CLASSES: How Airlines Make Money

In this video we’ll walk you through:

Exploration of Airline Classes: The video delves into the intricate world of airline classes, from budget-friendly Economy to luxurious First Class, and how airlines have refined their strategies to cater to diverse travelers.

Future Trends in Air Travel: It discusses the future of air travel, including technological advancements, personalization of passenger experiences, and the balance between affordability and premium services.

Profit Dynamics in Airline Industry: It explains how airlines generate most of their revenue from premium seats like Business and First Class, despite these seats being a small fraction of the plane's capacity. The video illustrates this with a real-world example and highlights the impact of premium passengers on airline profitability.

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Footage credit: @NonstopDan

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[kentfrederick]

In the days of U.S. regulation, Economy (a/k/a Coach) subsidized First Class. Generally, First Class was only 20% to 25% more expensive than Coach.

But then, on a Pan Am 747, First Class was more akin to today's Premium Economy. Coach was 2-4-3, while First Class was 2-2-2.

In the post-deregulation era, it was the walk-up business passenger who made flights profitable.

A leisure economy traveler, booking 21 days in advance and staying over a Saturday maybe paid 10% of what the business economy traveler paid, when booking a ticket on a Tuesday to depart that evening, and returning Friday afternoon.

Before Zoom and 9/11, business travel was very inelastic. If a client said, "Get here ASAP, " or a corporate VP needed plant managers for a meeting to discuss a problem that just arose, everyone got on a plane.

That era is gone.

[royt]

Yes, economy just filled up the plane, but it's better than flying in an empty aircraft.

[spn]

I fly very little, and when I do it's short 1-2 hour flights around the US. One thing I shake my head at is you are on one of these short flights, as soon as the plane levels out the cabin crew is rushing down the isles serving drinks and snacks and as soon as they are done they are coming thru collecting garbage just before the plane lands. I just wonder how much they'd save eliminating that on the short flights. I mean, it's a one hour flight, can people not survive without a drink for an hour. Just things about flying I shake my head about.