The Economics of Airline Class
Wendover Productions6 HN recommenders · 2017–2025
12.2M views · explainer · evergreen · Uploaded 2017-03-14
Wendover Productions explains how airlines make money from different cabin classes and why premium seats matter so much to profits. It also touches on how this shaped decisions such as the decline of supersonic travel.
HN commenters recommend it as an in-depth, accessible look at airline class economics and revisit it in many discussions about airlines.
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11 comments from Hacker News
Unfortunately, due to the economics of airline class[0], privileged passengers account for about 70% of airline revenue. 0. [VIDEO]
There's a good Wendover video on airline classes: [VIDEO] And another great one about AmTrak in relation to flight: [LINK]
If anyone finds the operation of airlines a fascinating topic, you might like Wendover Productions: [LINK] How airlines price flights [LINK] The little plane war [LINK] Why planes don't fly faster [LINK] The economics of Airline Class [VIDEO] How airlines schedule flights [LINK] I just recently found the channel. So much good stuff. (My unrelated favorite is [LINK] How the US government will survive doomsday.)
According to this: [VIDEO] First/business class seats are where the airlines make all of their money, so Concord would be economically viable today.
There is also another Wendover one explaining the economics or airlines classes and it talks about specifically why supersonic flights went into oblivion: [VIDEO]
Would highly recommend the YouTube video below [0] from Wendover, which went pretty in-depth on the economics of airline classes a while ago, and how first-class was the least profitable for the airlines. :) [0] [VIDEO]
Economy class seats generally speaking will earn the least amount of money to an airline, so this idea would actually likely be the most unprofitable option. To make it truly profitable, you convert the plane to First class, but then you'll need to fill all those seats. Wendover Productions had a great video on this a few years ago: [VIDEO]
I don't understand why they won't run a platform car on the back of the trains and sell tickets as a super-premium class. It'd be the most profitable seats on the train because of what you'd charge for the experience, much like how the few 1st class seats on an jet earns the airline more than the entire economy class. [VIDEO] Sure, the product is basically the same - a ride from Point A to Point B. But if you offer a private dining room, an observation lounge, a steward who attends to just you and 3 other cabins, you can charge way more than an economy seat. By only focusing on the "Point A to Point B" aspects, they're entering a downward financial spiral.
Highly recommend Wendover's videos on Airline economics, this specific one is about the various classes in Airline seats [VIDEO]
There is also market separation in play: For the base service you only charge cost+small margin. For higher service levels you charge higher profit margins even though the additional service does not cost that much more to provide. Best example: flight seats. Economy class fills the plane, but business and first class are the money makers [1]. [1] [VIDEO]
Do you have a source showing $/sqft of economy vs business/first class? This video is basically saying the opposite of you: that business/first class subsidizes economy. [VIDEO]