Lots of companies are willing to pay for international business class, but not first class. So airlines have responded by making business class nicer and nicer. That, in turn, has made former first class passengers just buy business class because it’s almost as good for cheaper. So people are not buying first class tickets, so might as well eliminate them and add more business.
Worth noting that domestic first class (which is what they show) is a totally different thing.
I need to fly from NJ to California in a few months. Economy tickets are around $275. I'd like a bit of extra legroom for the long flight, so I check out Economy plus. Economy plus tickets are $800. What in the actual fuck is this? It's not first class. I get no added benefits other than a few inches of extra leg room.
Buy 2 seats, 1 behind the other, for $550 then walk in there with a toolbox and yeet that seat out through the emergency door onto the tarmac. You get more than a few inches and it only cost twice as much.
Makes sense, there is no US middle class anymore. The wealthy can just use a private jet while the poor are put on overbooked flights. Wealth disparity is getting worse and not better.
More like a supply and demand issue I would think, the issue here being there is no demand for first class seating so they are limiting the amount of "supply" of those seats to accommodate for less demand. Some airlines don't offer first class seating at all, like Southwest.
There is demand for first class seating from nearly 100% of fliers. They're just not willing to pay what AA is charging. This isn't a supply and demand decision. Econ 101 says that means AA should reduce the price, but capitalism in practice says the constant desire for more profit and the monopoly that most industries have been allowed to grow and maintain means never lower the price and find a new way to fuck the plebs who don't even own a single yacht.
That is the definition of no demand. Whether customers don't want your product or the price you're charging, it's the same. It's then up to your business decision which way you go from there, increase coach seats or lower the price of first class. Make the right choice and you stay in business.
Employee: “Customers are not seeing the value on the service priced at 4X of an economy seat. Let’s offer first class at a discount. Market research shows customers willing to pay a premium markup of up to 2X for it.”
Boss: “Great idea, let’s increase plane occupancy by making more economy premium seats and marking up all of them 2X!”
Boss gets bonus for innovation and promotion. Employee gets RTO orders, 1% merit increase, 2% COLA adjustment and a pizza party from the boss to thank for being part of the AA family!
It's less that there's not a demand so much as supply and demand work together. Not appart. When it comes to accounting, there are different ways to look at different things. The main one is financial accounting. Another one is taxes.
In the case of this: managerial accounting. Something that a lot of corporations seem to be failing at lately. Managerial accounting is basically finding information to report to the managers. For instance, breaking down the cost of an item to see how much it costs to produce, comparing it to how much it makes, etc.
One thing they do is figuring out how much to raise the cost of a good/service. It's a slight gamble in that you can never be 100% sure, but they try to find that sweet spot where they can raise it without scaring away too many people and eventually losing money. In this case, they charge too much. The cost of flying, like everything else, has gone up. And we get worse service while there. So if you're raising the cost of the different services, and you find that people are now only going with the cheaper option, you have likely started over charging. You need to drop the price of both services.
For instance, I might be willing to spend an extra $50 for an upgrade. But if you raise the price of the cheap service by $100, now I don't have the money. Make the gap between the two $100, and now I really don't have enough.
Of course, when every company made it a race to riase proces as much as possible, at this point I don't think many companies have much of a choice. They all kind of fucked everything all at once, including themselves. But they made a profit in the short term, so there's that.
The 16 first class seats will be replaced by 30 economy plus seats, increasing capacity by 14 additional passengers per flight and reducing cost of first class food and equipment to serve.
A win-win for company and shareholders but a loss to consumer choice.
If you have 40 first class seats instead of 60 regular seats, why would you drop the price of the first class if you could make more with the 60 regular seats.
Inequality has gotten so much worse that rich people don't even fly in the same planes as us anymore.
That's going to have perverse incentives on airplane safety too. They have no reason to update their laws if peasant airplane doors falling off becomes common.
You think airlines don't make money on economy class? That's the vast majority of their income. Of course they're going to serve their largest customer base.
This doesn't address the point. OP said Economy makes them the most money. Sure, Business class is most profitable per ft. But it's only 25% of the plane at best.
You didn’t read the article or look at the infographic did you? Assuming a full flight, business actually brings in 3x of the total revenue that economy does since it has a much higher $/sq-ft. Even with less people , its total is more.
You are quite right.
The link just took me to the FAQ, I didn't see the entire infographic above it. Very interesting and you are right, Business Class is less than 15% of passenger numbers but they account for 70% of profits.
I have a friend that is a sales manager for private planes. He said business exploded during the pandemic and then never slowed down. This despite flights being eye-wateringly expensive (like, 20k for one-way is a great deal, because you managed to book an empty leg.)
No. I was on a plane with Mitt Romney while he was running for president. He flew with everyone else. The idea of private jets is absolutely us coming to needing to sell something better and private for the wealthy which means more waste and less attention, and wirse conditions.
I was out with some guys last night and one of them was talking about a PJ for a golf trip. I didn't know what he was talking about so I kept quiet. I used to travel extensively for work, usually on the company plane so I've spent a good amount of time on planes all by myself with the pilots, so my Buddy who invited me to this outing started asking me questions about what it's like flying private and I figured out pj means private jet.
The guy talking about using a private jet is a fireman. I'm sure he makes a nice living but what fucking world do public service employees use or even think they should be using a private plane to go golfing? I don't even get the idea of flying somewhere specifically to go golfing, that seems like rich people shit, hiring a damn plane for it? How the hell did that even become a consideration?
Eta. I'm not shitting on public service employees. This guy probably makes more money than me and for sure has a better retirement plan LoL. I'm pointing out that this guy doesn't work in finance, real estate or an industry that you might more typically expect to be familiar and using private services along those lines.
We were looking at a family vacation for Christmas instead of all the different households just getting together at one of the houses. At between 12 and 16 people (depending on the company, destination, and package) it was less expensive to charter a jet than purchase individual tickets.
My trigger for chartering was 6 people flying nic pilots. After that, factoring in the cost of the salaries on board and hotels we typically needed flying commercial, it made sense to book our own plane.
This is a guy talking about was talking like he's going to book a G6 to take him and 3 buddies to South Carolina. Small difference in the value proposition there.
There are considerable safety concerns regarding private jets, mostly down to the quality of the pilots. At the bigger airlines, pilots are unionized and have consistent schedules they work and routes and aircraft they fly. It’s reliable work and where most pilots (even military) end up.
Meanwhile private aviation needs to be flexible and easy to set up. Contrary to your comment this is the sector that you can usually expect to find more unscrupulous operations and pilots who are basically just Some Guy. Most of the near miss accidents lately have involved private planes (though that can often be attributed to problems in the ATC network).
As for the doors that’s more of a Boeing specific problem, they’ve made a lot of questionable business decisions in recent years and this is the fallout of that. Airbus planes don’t seem to have this problem, and customers seem to be making it clear that they would like their planes to work thank you very much.
I'm guessing that's because the international flights that Americans use instead are from other countries that does not have first class areas, in that everyone gets the same seating and leg space.
Such a disgusting socialist ploy. The CIA should coup the pilot and copilot and divvy up the plane in "desirables" and "undesirables", to then pin them against each other.
I don't really care about airlines, but AA is the only airliner that flies out of the local regional airport (only flies to a bigger airport a few hours away), and I've never had any issues with them.
The worst I've had was having to listen to a flight attendent talk about God because I was on the last row.
We usually fly AA on flights to Europe. We live near KC, so our choices are AA or United (IIRC). And we prefer AA’s time schedule. Outside of major cities there is little choice to many destinations.
They're right. Few buy First Class tickets because the uptick in comfort and service from Business Class is tiny for the increase in cost. I fly Business but would never pony up for First.
I’ve flown on AA’s international business and first class. The difference is negligible in terms of the seats and most people in them were complimentary upgrades since they couldn’t fill the seats.
The bigger differences were on the ground with the dining and check in. So all AA is doing is creating a “Business Plus” category that gets you the first class amenities on the ground and then a business class seat. This lets them put more business class seats on the plane and open things up to a bigger revenue stream.
AA first has been a joke for a long time. It was an ever so slightly better seat and they served one extra course - a soup - but was otherwise identical to business class service. You can’t charge thousands more for soup.
First class has been dying for years - and the only airlines that will do it, it’s really a prestige thing more than a profit center.
AA is the last United States based airline to even have one. This move is an industry-wide trend now that lie-flat business class seats are standard. Business class has gotten much nicer in the past 10 years and taken away the customers that previously would have flown in first.
I'd rather fly Qatar qsuites or many other si-enclosed business class seats than the first class ones remaining on European airlines like British Airways, Lufthansa, of air France. And doing so is a fraction of the price.
No, it's expensive but not "private plane" expensive. I rode first-class international once because I was recovering from covid and didn't want to deal with the pain of coach (and the travel company that was responsible for my getting covid was paying some of the bill). I'm also 6'4" and don't physically fit in coach. So like, yeah, I'm being physically forced out of coach cause it's too small and I have to pay out the ass to just exist on a plane without physical pain. Must mean I have my own jet, and not that I'm getting fucked.
It was the most comfortable plane flight in my life. It wasn't super comfortable, the sleeper pod things are made for smaller people obviously, but there wasn't pain and there were positions I could move through if one got a little too uncomfy. It was so nice compared to every other flight in my life.
While I am not super tall, I am heavy. The one time I got to fly international first class was the first and only time I could sleep on a plane. I got a nice large bourbon, fluffy comforter, pillow, and burrito-ed myself in that pod. It was utterly glorious. I was glad that I wasn't paying for it... Was something around 4k for a 5-6 hour flight.
If the flight is international and sufficiently long, getting better seats is worth it. Better food. Free booze. Lounge access (it depends...). More space. If the price is right, get first.
This isn't true at all... My wife and I fly first class and are no where near being able to afford flying private 🤣 the no babies part would be fantastic though.
It's ma'am! 🤪 And huge difference, like $1000 for first class domestic, compared to $10,000 per hour for private domestic minimum or memberships that are $100k+ just to join.
