Warks said:
Question: if airlines don't make money why are they in the game? (sorry that should be a separate topic)
Because times have changed. The established airlines have too much capital tied up to be able to exit gracefully, as well as the employment and labour issues often driven by a unionised workforce.
How many new airlines have commence in the last 5 to 7 years (worldwide)? Quite a few, I suspect. How many of those a full service airlines? Very few, if any, except perhaps in major growth regions like China.
The current model for new start-up airlines is that of a Low Cost Carrier. Why? Because many travellers are very cost conscious and not willing to pay for some of things that were once considered standard inclusions in an airline product - such as food, FF programs, pillows, IFE, reserved seating, baggage interlining, decent seat pitch. Competition does this - reducing fares, service and profits; while increasing choice, availability and shareholder risk.
The airline that gets the mix right can be sustainable. Those that get it wrong learn a very expensive lesson. This is where we are seeing many long-term full service airlines reincarnating themselves in the LCC mould (eg AC), or moving into that market in some form (eg JQ).
Of course from a passenger point of view (which I am - I am not a shareholder or employee of any airline), we want better service and product innovation at the same time as lower fares. Its a bit like the old Better, Faster, Cheaper triangle - choose any two at the expense of the third.
So would I be willing to pay an extra 10-20% on my airfare in order to get better seat pitch? If my employer is paying the fare, then yes. I always try to minimise my company paid travel costs, but I could justify the cost for business related travel. In fact, I can often justify the 3 to 4 times cost for business class travel depending on the circumstances.
If I am paying the fare out of my own pocket, then it would depend on the situation - domestic flight, no; long haul international, probably. But I do have that option on some long-haul international routes, such as Air NZ or UA E+ to USA, and BA WT+ to SIN, BKK and London, albeit WT+ generally being more than 20% uplift on cheapest WT fare. But I would have to weigh up the value of investing in an airfare with greater comfort vs investing the same money in nicer accommodation, meals or activities at the destination, so there is no definite answer from me at this time.