RichardMEL
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- Mar 28, 2014
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The comparison wasn't about the market and demand, it was about the cost to the airline. QF can deliver a 20,000 mile roundtrip, with at least 6 hot meals and open bar for $1500. But for $2500 delivers a toasted sandwich costing a dollar.
Yeah sure, but that's simplistic in my view. The price they are charging for the 1 hour hop and the soup or toasted sanga vs the SYD-LHR in Y is related to the supply and demand and the level of competition. If QF was the only option, or in competition with just 1 other, you'd be charged much more for that long haul flight. However, in this example, QF is competing with a whole slew of other airlines for that business and thus the price is down. In contrast, the only people who pay those full J rates tend to be corprates (so even those are on some sort of discount, but almost usually paid for as a business expense) and as such they charge what they feel the market will bare (and further, on a hub-hub route like MEL-SYD as an example, you'll also have a heap of connecting pax, and so the actual cost for the sector will not be in line with what QF is charging for the sector itself.
Sure, looked at in isolation as O&D markets the yield is stupendous... but we all know that mot domestic routes have little paid and a lot of upgrade/award traffic, so the price points are more or less meaningless except to those paying out of their own $$$
However the yield breakdown on any particular sector will not be so straight forward with connecting traffic and other things taken into account.
And frankly for a 1 hour flight, even if they could serve it, you couldn't use or do with 6 hot meals, 10 drinks etc etc etc. It's just not practical.
Could the product be better? Absolutely, but with a very low % actually paying for it, there's little incentive to make the product better. Look at the US example as proof of this. Europe is not much different.
About the only areas you'll find more elaborate offerings are going to be in Asia and the ME3 IMHO.. and they have far lower costs.
Don't get me wrong.. I get what you're saying and don't disagree with the sentiment, but I still don't feel it's a really valid direct comparision to make - but that's just me