Virgin Australia Light Fare Class

[ozfflyer]

You do not understand yield. I suggest visiting Google.

A fare sold is not always better than it going empty. You forget that weight not used in the passenger cabin can be used below as cargo which may work more favourably for the airline.

yep understand yield. You are talking of extreme loss leaders like $1 fares, which are basically put out to get free advertising.

In most cases freight generates less revenue per kg, plus think freight revenue is falling faster than pax revenue

 

[Mattg]

The definition of airline yield is the average fare paid per passenger, per kilometre. It's calculated by dividing total passenger revenue for the flight by RPKs (revenue passenger kilometres).

Selling cheaper fares does not increase yield.

 

[ozfflyer]

The definition of airline yield is the average fare paid per passenger, per kilometre. It's calculated by dividing total passenger revenue for the flight by RPKs (revenue passenger kilometres).

Selling cheaper fares does not increase yield.

yield per flight increases when you fill an otherwise empty seat at slight loss leader fares

 

[Must...Fly!]

yep understand yield. You are talking of extreme loss leaders like $1 fares, which are basically put out to get free advertising.

In most cases freight generates less revenue per kg, plus think freight revenue is falling faster than pax revenue

When was the last time an airline sold fares for $1 transpacific? Selling cheaper than average fares does not result in increased yield. Period. It may improve your load factor & RASK, but whether that is profitable or not is another question.

Freight may have been softer over the last year, but Qantas still managed to increase freight earnings by 8% last year and saw fit to invest in new aircraft.

Long haul for Australian based airlines has been a challenging prospect for over 20 years. The overcapacity could be seen as a problem but Qantas continues to expand it's US footprint, and only UA have shown any significant signs of pulling back capacity out of Australia. Unsurprising they would get nervous first, as they have no partner within Australia to feed on or to.

yield per flight increases when you fill an otherwise empty seat at slight loss leader fares

No it does not. You are ignoring mathematics, and/or have a misunderstanding of metrics. In your scenario, revenue goes up, yield does not.

 

[ozfflyer]

When was the last time an airline sold fares for $1 transpacific? Selling cheaper than average fares does not result in increased yield. Period. It may improve your load factor & RASK, but whether that is profitable or not is another question.

Freight may have been softer over the last year, but Qantas still managed to increase freight earnings by 8% last year and saw fit to invest in new aircraft.

Long haul for Australian based airlines has been a challenging prospect for over 20 years. The overcapacity could be seen as a problem but Qantas continues to expand it's US footprint, and only UA have shown any significant signs of pulling back capacity out of Australia. Unsurprising they would get nervous first, as they have no partner within Australia to feed on or to.

No one said $1 to USA, but Jetstar/Tiger have had plenty of $1 to $9 fares to get free promo. You don't seem to understand the very basics of yield. More fares sold, mean more revenue mean more yield, it's that simple.

 

[Must...Fly!]

No one said $1 to USA, but Jetstar/Tiger have had plenty of $1 to $9 fares to get free promo. You don't seem to understand the very basics of yield. More fares sold, mean more revenue mean more yield, it's that simple.

They do have promotional fares but they are extremely limited.

If you take your reasoning further, then if they sold every fare for $1, yield would be increased.

A scenario of a basic 500 mile flight.

100 seats for sale, but only sold are the following;
5 at $30
10 at $50
50 at $100

65 seats sold, at a total revenue of $5650, and an average fare of $86.92. Revenue Passenger Miles is 65 x 500 = 32,500.

The yield is 5650/32500 = $0.174 cpm

Repeating the above, but forgetting about the "loss leader" $30 fares.

10 at $50
50 at $100

60 seats sold, at a total revenue of $5500, at an average fare of $91.67. Revenue Passenger Miles is 60 x 500 = 30,000.

This time, yield is 5500/30000 = $0.183 cpm

Lower revenue, lower load factor, higher average fare, higher yield.

This excludes costs which obviously need to be accounted for...yield on its own is not the best metric as it's hard to make comparisons without a lot of other data. But this was just to make the point.

 

[DalyWaters]

Air NZ must be frustrated that they could not convince Borghetti to go and could not convince Virgin to adopt the "LCC within the full service" airline concept that has been so successful at Air NZ.
Now that Air NZ has sold out, Virgin are starting to implement the Air NZ way.
Tiger has to go and this is the best way to do it.

 

[ozfflyer]

They do have promotional fares but they are extremely limited.

If you take your reasoning further, then if they sold every fare for $1, yield would be increased.

A scenario of a basic 500 mile flight.

100 seats for sale, but only sold are the following;
5 at $30
10 at $50
50 at $100

65 seats sold, at a total revenue of $5650, and an average fare of $86.92. Revenue Passenger Miles is 65 x 500 = 32,500.

The yield is 5650/32500 = $0.174 cpm

Repeating the above, but forgetting about the "loss leader" $30 fares.

10 at $50
50 at $100

60 seats sold, at a total revenue of $5500, at an average fare of $91.67. Revenue Passenger Miles is 60 x 500 = 30,000.

This time, yield is 5500/30000 = $0.183 cpm

Lower revenue, lower load factor, higher average fare, higher yield.

This excludes costs which obviously need to be accounted for...yield on its own is not the best metric as it's hard to make comparisons without a lot of other data. But this was just to make the point.

It's yield per flight NOT per seat !!!!!!!!!

 

[ozfflyer]

Air NZ must be frustrated that they could not convince Borghetti to go and could not convince Virgin to adopt the "LCC within the full service" airline concept that has been so successful at Air NZ.
Now that Air NZ has sold out, Virgin are starting to implement the Air NZ way.
Tiger has to go and this is the best way to do it.

Tiger could remain as leisure only & not on trunk routes, except maybe back of clock or very late flights such as BNE/MEL at 2200 or later.

They could also back up VA flights. Eg. if last BNE/MEL VA flight goes U/S then VA pax could be put on Tiger if any seats. Much better than being forced to overnight.

 

[HS-TQE]

Air NZ must be frustrated that they could not convince Borghetti to go and could not convince Virgin to adopt the "LCC within the full service" airline concept that has been so successful at Air NZ.
Now that Air NZ has sold out, Virgin are starting to implement the Air NZ way.
Tiger has to go and this is the best way to do it.

Only (partly) at International to align themselves with Delta Air Lines. A minimum of 1 bag, Meals and IFE are still complimentary on the base international fare.
Question still remains for Domestic due to VA's Tigerair subsidiary.

Delta were more closer to Virgin than Air NZ or Singapore were back in the day and is still strong now.
I would not be surprised if NH and/or DL purchases either the HNA or EY stakes down the track.

The NZ divide and eventual divorce was also taking into consideration the news reports that Luxon (NZ) had allegedly demanded that VA "give up all international" and feed everything into his airline and "fellow enemy" UA at the same time he demanded Borghetti to resign. It was that alleged demand (perhaps Luxon's ego got in the way in a very divided VA boardroom) that led to all other shareholders to side with Borghetti at the last moment, and left Luxon/NZ with no choice but to sell out of VA.

 

[ozstamps]

Freight may have been softer over the last year, but Qantas still managed to increase freight earnings by 8% last year and saw fit to invest in new aircraft.

Two word answer to that

AUSTRALIA POST

$A1.4 Billion Dollar deal with them last year. And several Qantas aircraft just carry freight for AP.

'This is pretty big': Qantas, AusPost seal $1.4bn deal to tackle online shopping

Australia Post and Qantas have signed a new deal to keep up with Australia's love for online shopping.

www.smh.com.au

Virgin sees none of that golden rivers.

Parcel mail for AP has exploded in recent years due to online shopping, and they make VAST profits from it.

 

[Must...Fly!]

Quite correct that the Star Track/AP deal is a boon for Qantas.

Virgin do freight work on behalf of other companies though such as Toll.

Post automatically merged: Jan 27, 2020

It's yield per flight NOT per seat !!!!!!!!!

You can't make up your own definitions.

Airline Data Project

What you're referring to sounds like RASK/RASM (Revenue per Available Seat Kilometre/Mile)

 

[odysseus]

Well, obviously if I add exclamation marks to my incorrect assertion, that will make the statement true.

 

[jase05]

Two word answer to that

AUSTRALIA POST

$A1.4 Billion Dollar deal with them last year. And several Qantas aircraft just carry freight for AP.

'This is pretty big': Qantas, AusPost seal $1.4bn deal to tackle online shopping

Australia Post and Qantas have signed a new deal to keep up with Australia's love for online shopping.

www.smh.com.au

Virgin sees none of that golden rivers.

Parcel mail for AP has exploded in recent years due to online shopping, and they make VAST profits from it.

Spot on and I see that first hand.
Still all awaiting SWZ to open though as that will be the cream on top for AP

 

[jase05]

Virgin do freight work on behalf of other companies though such as Toll.

Toll shifted most of their business to QF but TNT have gone to VA.
TNT aren’t doing so well though and AP will crush them eventually

 

[Must...Fly!]

VA did up freight revenue by about 20% between 2018 and 2019 financial years.

Though it is only $125m. By contrast, Qantas took in $971m.

 

[serfty]

Virgin sees none of that golden rivers.

Virgin do freight work on behalf of other companies though such as Toll.

VA do get freight work from Auspost but not 1.4B worth ... so, no golden rivers

 

[ozfflyer]

Well, obviously if I add exclamation marks to my incorrect assertion, that will make the statement true.

loss leader fares such as $800 return to LAX, (not insanely low fares, that are used for free advertising) will help yield per flight when seats would otherwise go empty.

The airlines are hurting now. Recession, now Coronavirus, with massive cancellations out of China already & a big scare campaign in full swing.

 

[Must...Fly!]

loss leader fares such as $800 return to LAX, (not insanely low fares, that are used for free advertising) will help yield per flight when seats would otherwise go empty.

The airlines are hurting now. Recession, now Coronavirus, with massive cancellations out of China already & a big scare campaign in full swing.

Ah I see the recession has returned.

$700 fares will be next. Gotta up those yields.

 

[ozfflyer]

QF doing $799 return to LAX from BNE, SYD, MEL

Dates and details

so how do AA, UA, DL, VA, NZ & FJ respond to these fares ?

Coronavirus must be having a huge impact on new bookings. Many must be taking a wait & see approach.