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carrier economics for International PE

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Jeffrey O'Neill

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It's always been a bit of a bugbear for me that PE is so over priced when compared to what you really get. If you're on a QF 747 in PE then you're getting roughly 33% more "personal" space, though the airline is potentially loosing about 50% when compared to Y seating.

So in the space of 36 PE seats they could get 54 Y, with the potential for being creative that figure might increase. On the A380 the economics move even more to QF where they could only fit 48 Y where they get 35 PE or just 37% less seats.

I could understand since the word premium is used that they might double the cost, but quite often it's more like 2.5 to 3 times the cost of Y fares.

I know they're probably worried about killing off the J market, but surely an always full PE cabin, even if enlarged, would have to pay off?

I've noticed VA has significantly dropped their PE pricing back to around the 2K mark to LAX. I'd be quite happy to pay that - I did back in 2009 - as it's roughly twice a Y fare and was far more pleasant experience than when I've done the same journey in Y.

has QF, and other airlines with PE, just been too greedy? I'll be very interested to see what kind of pricing SQ introduce with their PE product next year.
 

Aussie_flyer

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2k used to be the.price for economy to the USA. That it is now a premium economy price must make it very hard to make money
 

moa999

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It's always been a bit of a bugbear for me that PE is so over priced when compared to what you really get. If you're on a QF 747 in PE then you're getting roughly 33% more "personal" space, though the airline is potentially loosing about 50% when compared to Y seating.
How do you get that figure.

On say upper deck A380 you are 9-across in Y versus 7-across in PE (+29%)
And Pitch is 40" avg versus 31" (+29%)
(just pulling from seatguru)

So chargeable floorspace (which is what matters to the airline) is more like 65-70% more
then you've got to cover things like a more expensive seat, greater staff/pax ratio, food/drink costs.


Then I think the airlines keep the space smallish so they don't have to discount as much, whereas the discount Y fares are really discounted versus Full Y.
 

dajop

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How do you get that figure.

On say upper deck A380 you are 9-across in Y versus 7-across in PE (+29%)
And Pitch is 40" avg versus 31" (+29%)
(just pulling from seatguru)

So chargeable floorspace (which is what matters to the airline) is more like 65-70% more
Actually upper deck is 8 across in Y, vs 7 in Y+ so that 14% more , so total number of seats is 45-50% more. Or if you like, between the exit doors at the rear of the upper deck , QF fit 35 Y+ and 20 Y seats, whereas SQ fit in 68 Y seats in the same space. So 35 Y+ translates to 48 Y... or 37% more....
 

harvyk

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You are delving into the murky world of fares there. Keep in mind it's not just the physical seat, but off the top of my head I can also think of the extra staff and training costs, the extra cost of the food, offsetting the risks attached with the fare conditions, and the cost of flying that larger seat empty on some sectors.

There is also different competition for PE seats compared with Y or J.
 
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eastwest101

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So 35 Y+ translates to 48 Y... or 37% more....
Provided those numbers are correct (and I've no reason not to) - that is the crux of the equation - floorspace or $ per sq metre.
So if 47 normal Y seats fit into the same floorspace as 35 Y+ seats then by going for the Y+ config the airline is sacrificing 27% of its normal Y seats in a given floor space footprint (or by going Y+ seating their seating density is only 73% as dense compared to 100% seating density of normal Y).

So yes - slightly higher crew/pax ratio and slightly better food and drink should result in realistic Y+ prices that should be say 120-170% of average Y fares.

Lots of other market factors to consider - overnight or long distance flights obviously have better demand for Y+ than short flights, better Y+ products may attract a price premium, having a Y+ cabin also gives you the ability to oversell or yield manage the Y cabin and then upgrade some people from Y to Y+. No-one has seriously addressed the post-GFC rules of "No Business class flying allowed" policy of numerous companies and employers.

I still say that with high Y+ fares if you are not paying the bill then Y+ presents excellent value for money, or, if it is out of your own pocket then I would be asking where the endless glasses of 1988 vintage Krug are, and expecting caviar by the tonne because the costs to deliver Y+ should not be as high as providing a J class or F class seat.
 

milehighclub

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Actually upper deck is 8 across in Y, vs 7 in Y+ so that 14% more , so total number of seats is 45-50% more. Or if you like, between the exit doors at the rear of the upper deck , QF fit 35 Y+ and 20 Y seats, whereas SQ fit in 68 Y seats in the same space. So 35 Y+ translates to 48 Y... or 37% more....
Your numbers are a little off. SQ has 88Y aft of doors two. QF has 35W and 30Y in the same space. So in the space of 35W seats you could have 58Y seats.
 

dajop

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Your numbers are a little off. SQ has 88Y aft of doors two. QF has 35W and 30Y in the same space. So in the space of 35W seats you could have 58Y seats.
But there are different configurations of galleys & toilets at the rear, hence I just compared the space between the two exit rows.
 

TomVexille

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But there are different configurations of galleys & toilets at the rear, hence I just compared the space between the two exit rows.
And SQ have a 32in seat pitch in Y compared to the 31in that QF have gone with.
 

wandering_fred

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Depending on the route, the airline might find a much higher load factor in Y+ than in Y. I certainly suspect that this is the case for BA both trans-Atlantic, Hong Kong and on the Kangaroo route. And QF would likely see the same result on the truly long haul routes. So apply a factor in your space calculations to reflect the amount of space that is actually attracting revenue in the two cabins.

OTOH, CX is not seeing this higher load factor on its Australia ( and India/Middle East). In the former case, I suspect that with the plain Y fares priced at the level they are ex-Australia, it is simply not possible to price Y+ at a level where the average passenger would consider the up-fare. They would rather "deal with the pain" on the 5 to 8 hour flights.

The other factor to consider in the pricing, is that AA gives the upgraded EQP earnings for Y+. So for AA FFers, paying for Y+ (especially on CX since H class is required for credit to AA in Y) in many cases is an attractive option. OTOH, QF (and a lesser extent BA) really provide no real incentive for Y+ rather they limit the "bonus" levels to the J and F cabins to those crediting to their FF programs.

Happy wandering

Fred
 

dajop

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And SQ have a 32in seat pitch in Y compared to the 31in that QF have gone with.
Yes you a right, how could I forgot about that, given I have had numerous SQ A380 flights! Bottom line the Y cabin having 50% more seats is probably a reasonable estimate.
 
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