JetBlue estimates a net savings of $30 million over five years by removing
six seats from the A320 fleet, as a result of reducing the inflight crewmember
team to three, and by reducing the weight of the aircraft by approximately 904
pounds, which will lower the fuel burn. That figure includes lost revenue
opportunities as a result of selling six fewer seats per A320 flight. The figure
does not include any revenue improvement that may result from the enhanced
JetBlue Experience.
per-flight configurable seat modules, for exactly the number of people on board, and can be quickly loaded/unloaded to minimise excess weight. Installed seats adjust their clearance automatically based on available space and user's ticket price/options.
I can already see the logistics and engineering nightmare of a flight devoid of seats having to bump an entire group of passengers because the next leg doesn't have enough inventory.
Seats are fixed because bolts are easy. Once you get into the whole latches and levers business you compound your points of failure. Ever look under the last row of foldable seats in an SUV? A lot of engineering goes into securing 100kg bags of meat to an object hurtling along the ground at 80km/h. Now imagine having to do the same for a plane traveling 2-3x that.
It's not quite that easy either. Seats on airliners must be "9G" after the September 11 disaster -- meaning that they have to survive 9G's of force. I doubt it would be possible to create seats that would stay in place with even 2Gs of force with latches.
Imagine Miracle on the Hudson. Seats may have flown out of their securements, due to the forces in excess of 2G. Or perhaps an emergency landing after an engine failure, which has the potential to be even more forceful. Gimli Glider, anyone?
Does speed really matter, though? I mean, the issue with cars is that they sometimes come to a very sudden stop, and in those situations the passengers need to be bolted to the ground. Planes don't often come to very sudden stops and when they do, bolts don't matter much.
The seats need to be secured, yes, but not in nearly the same fashion.
Yes. I would say even more so than cars. Even at its slowest a plane is traveling at 3x the speed of a car or 9x the kinetic energy. Then you have the problem of a compounding failure. If even one passenger gets lose the seat in front has to do 2x the work. A plane with 30-70 rows can have a domino effect if the bolts don't hold.
Also cars don't instantly stop. Most of the energy is dissipated by shedding the engine under the body and crumple zones. They have a dramatically shorter runway than planes.
Not quite. The extra seats only provide additional revenue when the flights would have otherwise been full. From the article, the average flight is only 80% full, which means those six extra seats aren't providing any additional revenue.
To determine the actual revenue increase from those six extra seats, we would have to know how frequently flights have less than 6 empty seats.
While these numbers will never be perfect, per se, RITA[1] shows that in 2011, Southwest's loadfactor was 80.8% while in 2012, loadfactor was 80.4%. So, the flights remained around 80% full on average.
I took this into account in my calculation and assumed roughly 4.8 more seats were filled on average per flight, not a full 6.
I think the key question then is why it was that 4.8 more seats were filled on average per flight. If we had data the showed that the distribution of plane occupancy were the same year over year save for a few occasions where last year the plane had been at capacity but this year those extra 6 seats had been put to use then the conclusion could be valid. However with the data I've seen so far it seems spurious to conclude that the extra 4.8 filled seats were caused by the extra 6 physical seats.
What is the revenue impact of expanding capacity? The solution is not obvious, but the author's approximation is more accuare than you suggest. You obviously can't solve this without a stochastic ticket demand model, but 4.8 is much closer to the right answer than 0.
Also if the airline wants to maintain an 80% capacity, having an extra x% of seats means they add to revenue if they can maintain that occupancy percentage. In this case we don't even need to factor in 100% occupancy, which if anything would help the numbers as I'm sure last seats on a fully booked flight aren't cheap.
They target around 100% full. That being said, having more seats allows them to adjust their pricing model so that they have more seats to attempt to maximize revenue.
Depending on the demand structure of routes, those 6 seats may have wildly different values and could potentially be worth more than the average ticket price, on average for the airline.
Since this is counter-intuitive, I'll explain why briefly:
Airlines attempt to price discriminate by selling low priced tickets to leisure travelers and high priced tickets to business customers.
The problem airlines face is that business travelers book at the last minute.
Since business travelers book at the last minute, they need to estimate the number of business travelers who will be flying.
If the average leisure passenger ticket sells for $100, and the average business ticket sells for $500, just having 1 extra seat can add 5 leisure tickets worth of revenue assuming they sell the same number of leisure tickets.
Realistically, their model will readjust the optimal pricing changes overtime to capture the most value. Because the additional seats give the model more flexibility, I would not be surprised if the additional seats added more than an average of 80% of 6 seats multiplied by the average ticket price.
Since not all seats are sold for an equal price, the extra seats may have indeed increased revenue potential by allowing for more "premium location" seats on the plane.
There are a lot of factors and it would be silly to think that the airline didn't take more than we can come up with into account in their decision.
The article states that reducing leg room from 32 to 31 inches allowed for one additional seat row. Which means that there were already no less than 32 rows on those planes. Six seats per row give 192 passengers. RITA numbers clearly show that the load factor have never exceeded 90% since 2010. That means that at least 10% of seats were empty, that is, 19 seats. There is no sense of adding another 6 seats just to have them empty. If there were a demand for six seats, the people demanding them would just have occupied those of 19 free ones.
Adding another row only makes sense if the plane is full and there's additional demand for seats. We should have looked at the load factor distribution, not only at it's mean value. Most attentively we should have looked at the standard deviation of the load factor around it's mean, but RITA didn't provide such an information.
There are a number of factors in play. But without knowing how the priced seats, and the number of capacity flights, this could just as easily be normal growth as it could be the impact of extra seats.
Not that I'm saying you are wrong, just that it's not the only explanation of the known facts.
The extra seats are only utilized when the plane is beyond the capacity of the old configuration. You'd need to know how often this event occurs in order to produce a meaningful number.
Until you can separate cause from effect, you have no way of knowing if the change in loading was due to reconfiguration of the seats, or other policy changes that occurred around the same time.
You also need to calculate the extra fuel costs for the additional weight of the empty seats. If most of the time those seats are empty, they need to be utilized enough to justify their extra expense.
Plane seats are over-committed on an informed guess of how many people will cancel, with enough slack built in as to mostly prevent the embarrassing case "I bought a ticket and there's no seat on the plane". So six extra seats may well equal seven extra tickets allocated for sale each time.
Of course the bastards should still be tortured for reducing the leg room.
People don't like booking the last seat on a jam-packed flight. If given the preference, they'll find a flight with some room (this applies in other cases where people decide whether or not to be in a crowd). So I wouldn't be surprised at all to hear that Southwest's 80% capacity remained constant before and after the six additional seats were added.
EDIT: Here's a related article where church seating on pews versus individual chairs is discussed - and airplane seats are even mentioned: http://www.alban.org/conversation.aspx?id=2380
In addition to the sketchy mathematical foundation, there's another reason to not draw too many conclusions from this observation: your company, product, and customers are probably quite unlike Southwest Airlines. For starters, airline customers care almost exclusively about price.
In one of Gerald Weinberg's books, probably The Secrets of Consulting,
there's the apocryphal story of the giant multinational hamburger chain
where some bright MBA figured out that eliminating just three sesame
seeds from a sesame-seed bun would be completely unnoticeable by anyone
yet would save the company $126,000 per year. So they do it, and time
passes, and another bushy-tailed MBA comes along, and does another study,
and concludes that removing another five sesame seeds wouldn't hurt
either, and would save even more money, and so on and so forth, every
year or two, the new management trainee looking for ways to save money
proposes removing a sesame seed or two, until eventually, they're
shipping hamburger buns with exactly three sesame seeds artfully arranged
in a triangle, and nobody buys their hamburgers any more.
> For starters, airline customers care almost exclusively about price
I fly exclusively on United because they have Economy Plus, which lets me buy an additional 3-5" of legroom at a reasonable additional price. Sure, it's more than Southwest or whatever else, but I'm more than happy to give them my dollars for the extra space.
>> For starters, airline customers care almost exclusively about price.
I wish that wasn't the case. I'd gladly pay an extra £20 on an international flight for decent food, and I regularly do pay an extra £50 or so for more room or an exit row seat. I know there's a market of people like me, for whom business class is way to expensive just to make a few hours a bit more pleasant, but who aren't just counting every penny. The airlines seem to have started to cater for us with things like Delta's "Comfort Economy", but it needs to go further.
The trick for decent food on airlines is to specify a meal preference. I'm usually say I'm "Asian Vegetarian". On most flights I get a reasonable curry, or something a bit more interesting than the usual slop they hand out.
As a bonus, special meals are usually served first and in some cases are specially prepared.
As it happens, I am a vegetarian, so I don't "miss" the meat - YMMV.
You're the "almost" in "almost exclusively". I am too.
When I was younger, I had more time than money, I travelled many a long hour in "cattle class", but I have some pretty awesome experiences to show for it. These days, I've got less time, but much more money, so I'll spend it for more comfort - but I'd be a damn hypocrite if I wanted airlines to do any less than their best to make sure young people of today can get the same experiences.
True, true, necessary travel is necessary and unnecessary travel is worthwhile and a broadening experience and definitely to be recommended. Pricing it out of mass market reach would be a bad thing.
I guess to get food that isn't just crap you need to pick your airline. Singapore aren't too awful, and Delta's chicken salad the other week on my ATL->LHR flight was perfectly OK, but that seems the exception rather than the rule.
I listened to a Radio 4 documentary on airline food the other week which was quite interesting. It revealed, amongst other things, that on many airlines there is a budget of roughly £1 ($1.50) per passenger per meal, which goes some way to explaining the hopelessly poor quality. And no, having travelled business class on a number of occasions, that old line "your taste buds are affected by the pressure" has never worked on me...
To get food that isn't crap, you need to eat a good meal at the airport, for longer flights bring a sandwich. For all their faults, I love London airports for the ubiquity of Pret shops.
If it's a morning flight I like to start the day with a plate of smoked salmon and scrambled eggs, and a large glass of Sauvignon Blanc. For this they charge an arm and a leg but it makes the whole thing just that bit nicer...
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.
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.
Sure, people would pay more to get better treatment but most people don't fly enough to know the difference. Ask a few people around which airlines give you the entire can of coke and which only give you half the can in a tiny plastic cup. Ask them which airlines give out free pretzels on medium length flights and which ones give out a menu where you have to pay for everything. Ask them how expensive the cheese sampler is off that menu and if they remembered to factor it into their cost of better treatment. Which airline has the widest seats? I actually don't know the answer to that. Thinnest stewards/stewardesses? I could care less about how attractive they are, but I like aisle seats and don't want fat stewardess butt in my face when they walk up and down the aisle. Are you going to be flying in a widebody jet or a tiny regional jet? You get the picture. There's lots of stuff to consider, and 1 inch less of legroom may not pop into people's minds (certainly not mine since I am always in an exit row. It's my mini-first class upgrade).
The fact of the matter is that most travelers aren't informed enough to know the difference between airlines except for the prices that show up on Priceline/Travelocity/Kayak/etc. I would like to see a feature chart on each airline and an estimated value to see if it was worth the extra money. I would pay extra to get updated intel like that before I book a flight.
For most customers, maybe, but I suspect there's a pretty sizable portion of the population
Yup, and for those two things you mention that you are willing to pay more for, there are probably 98 other things you aren't. Each person will have the things they are willing to pay more for, and most will be different, so for most services, 98% of people are going to choose the cheaper option.
Hence most companies won't give a shit, and almost everyone has moments where they wonder why there isn't an option to pay more for higher quality of X product.
Yeah, apartments aren't a commodity (they're pretty much the farthest from, given their absolute uniqueness in terms of location). Plane seats are, unfortunately.
Yes, but presumably you looked at the apartment first.
Unless airline search sites start listing seat pitch, amenities, seat recline, in-flight entertainment quality, etc. next to the ticket price when selecting a fare, it's hard to see how these factors would play into a purchase decision.
Even if the data were there, I'm wagering that the lions share of customers would keep $20 in their pocket at the cost of some minor discomfort.
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)
That's interesting. I fly first on a bunch of random airlines but most often fly SWA. I've had very few unpleasant SWA experiences, and lots of excellent ones where they bent over backwards to make sure things worked out for me.
On the other hand, almost every other airline I've flown has been nothing but bad experiences: repeated last-moment cancellations, surly staff, lost luggage.
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?
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!
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.
On a 12 hour flight, you want to sleep, but its impossible in economy. At least we can watch movies now during our flight, but the level of comfort between economy and business is vast.
I've never had a problem with babies on flights. I travel between the states and China often, and there are always a more than a few of them on.
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
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.
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.
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) and still ended up failing, for instance.
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.
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.
If flights are at 80% capacity adding 6 extra seats just means an extra 6 empty seats on every flight. The $733 million number is meaningless - what is actually needed is to know how many post-reconfiguration flights had 5 or fewer free seats, since that is the only situation in which the extra capacity is being used.
But if they could get more people on board, they wouldn't be 80% full. Or are you referring to the times they're completely full, which would go up by 6 seats? Then 6 doesn't get added to the entire average.
It's probabilistic. You can't just sell 100% of tickets ahead of time and be done. Some people don't show up. Some people buy tickets at the last second. The more tickets you sell the more you risk running out of space and having angry customers that need to be compensated. Even if you assume every flight has the same demand, having more seats lets you sell more tickets which lets you get more people on board, without needing flights to be full.
On top of that, you have uneven demand causing completely full flights, and while it doesn't add 6 to the entire average it adds a notable fraction of 6. Note that nobody actually claimed they added a full 6 more passengers.
Josefresco above claimed that the 80% rate could be 80% of the new seating arrangement, which just adds +6 across the board. That's what I "took issue" with.
I feel like saying "a single inch" like it's a pittance when we're talking about airplane legroom is a bit silly. Sure, it seems small compared to the other 31 inches, but that's not a fair comparison, because most of those 31 inches are non negotiable.
Realistically, we're talking about at least a 5% reduction in leg room, and that's nothing to sneeze at.
You obviously are not above average in terms of height. I'm 6'5" and planes are a nightmare of cramps and bruised knees. A single inch can mean the difference between being able to sleep comfortably on a long flight and staying awake while stiffening up for eight hours.
Ditto. I tried the near OD strategy for an Auckland-Rome series of flights. It turns out that you reach the point where they dont work anymore - at least not easily. At 4x the recommended dose I couldn't sleep that last 6 hours. I seem to max out at about 20ish hours of sleep. I almost got a DVT - swollen leg and very painful. I just avoid flights now.
It’s bad enough on buses and trains already (although newer Dutch Railways trains are great), but with flying I now have to make sure beforehand that I will physically fit. It’s not a matter of comfort for me, and it’s not like one can go to the gym and lose some height.
> That means, every year that single inch earns them $773,074,040 of additional revenue. I guess every little bit really does count.
This does not. There are so many intangibles here, that the conclusion drawn is very ill-conceived. Here's a list of things that can affect this number:
1. The amount of customers lost due to restrictive seats
2. The negative PR which will result from the change
3. The impact on flight price that the company may change after said PR
4. Is the data from all of those references accurate?
The list goes on and on...
It's a nice thought, but there's much smarter people with access to more precise information that draw these conclusions within the company. Enterprise businesses aren't as dumb as we all may think they are.
I've been underestimating the size of the airline industry. I have a hard time reconciling the fact that the airlines always seem to be on the verge of bankruptcy with numbers this big -- $90+ billion a year in just passenger revenue.
The issue here is probably their margins, not their volume, though? It doesn't matter how much passenger revenue they bring in if the expenses (safety, security, regulation conformance, equipment maintenance, fuel, staff pay...) outweigh it.
Running an airline is an enormously fixed cost business. At 75% occupancy, you are barely covering the costs of renting airplanes and terminals, paying personnel, etc. Once you are clearing enough to pay all of that, your marginal profit margin jumps tremendously because all those costs don't increase with the number of passengers you have, so the only thing you have to pay for that extra person is gas, which is about 20% of the ticket price. That necessarily leads to a boom-bust type industry. Southwest has been consistently profitable to the extent that they have tried to actively undo that. They do so by flying out of airports with cheaper terminal rents, reducing the size of their maintenance crews by only flying 1 or 2 models of aircraft, etc. A professor at NYU posts lectures from his corporate finance classes online and actually goes through a thorough analysis of the industry in one of the lectures. Link: http://pages.stern.nyu.edu/~adamodar/
There are plenty of years where some airlines make around $100-$200 profit per flight. Not per customer, but PER FLIGHT. Think about all the costs involved, and that is your reward.
My girlfriends father is a pilot for southwest. For my birthday we flew home with my pregnant sister, we of course flew standby. On the way back, my sister and I were separated in Phoenix, where she ended up getting stuck for the night because every flight after 11am was booked. What I'm saying is that although they were able to add more seats, they still can't give everyone a seat, and to southwest that's money lost, and to me, that's one frightened sister.
Although I enjoy my legroom, it was hell trying to get my sister home.
Agreed. I'm almost exclusively flying Jet Blue and Virgin and upgrading to their extended legroom seats at this point. I'm 6'2" and overweight -- not a good mix for the horrid seats in most coach sections.
I'm a bit under 6'5" and bit over 6'4". I know this situation well and have only rarely managed to get an exit seat, and yet have often seem people who are almost half my height in them. The only time we managed to get an exit seat was when my pregnant wife was literally crying from her legs being so sore that they gave them to us.
I don't know the economics of airlines, nor travel that much, but I can't believe there isn't a niche for an airline that features a reasonable amount of legroom at a reasonably higher cost. Something above the "cattle pen with wings" that people seem to have to put up with.
UKs Ryan Air was even proposing ideas of having people stand during flights (yep, its really that ridicolous) and letting people pay to use the lavatories...
Not that they would get through with that but still, they are searching for every inch to make more money.
Those crackpot schemes are just designed to get their brand in the Daily Mail and in turn, for people to talk about Ryanair. (their headquarters are in Ireland, not the UK)
Is it Ryan air that gets all its air hostesses to paint their faces with orangeish makeup? I have a recollection of a collection of air hostesses in skin-colour-inappropriate makeup from a trip a few years back.
The CEO said it in jest because even bad headlines is good advertisement. I don't think anyone of his engineers would have seriously considered implementing it. And that's not even counting the insurance underwriters and CAA who would have shut it down.
Honestly, after sitting at my desk all day/week... I actually wouldn't mind standing on my usual 50 minute Southwest flight. Not that the FAA would ever allow it.
If they came up with a way to run at 90% capacity instead of 80%, I wonder how many seats they could remove and how many inches of leg room could be gained.
Nice! When you account simple changes like this, it's amazing just due to the massive improvement. I could just imagine the saving for Walmart if they followed Ikea's model with doing away with plastic bags.
The Wal*Mart here doesn't have plastic bags but that is due to a city ordinance in Eugene. They charge five cents per paper bag but most people just bring in their own bags.
Southwest is famous for maintaining an all-737 fleet (I don't know what they're doing with Airtran's 717 fleet, but Airtran hasn't been integrated with SWA yet.)
