Event Capacity

[mweiss]

Can you charge enough for the seats (on average) to offset the cost of providing more seats, many of which are empty one way....

[post="245125"][/post]​

"Enough" would have to be double the yield of not flying the extra seats. That's a pretty tall order.

Actually, that's not necessarily true. It depends on the opportunity cost of those seats, since the larger aircraft has to be pulled from some other market.

 

[BoeingBoy]

Well, not quite. Assuming the extra seats come from bigger airplanes, they're lower cost seats (all else being equal, the bigger plane has lower CASM).

Then there is the question of average fare. In the second quarter, the average fare between PHL and JAX was $135. Would that be that hard to double, considering that the folks going to the big game are spending what - a couple of grand at least - for the trip to start with.

Jim

ps - I think the bigger problem is timing. Both Delta and AirTran announced extra capacity right after the playoffs. At this late date, how many extra seats could be sold since I presume we're down to the last minute impulse traveler.

 

[mweiss]

Well, not quite. Assuming the extra seats come from bigger airplanes, they're lower cost seats (all else being equal, the bigger plane has lower CASM).

True. I didn't take that into account.

...the average fare between PHL and JAX was $135. Would that be that hard to double

[post="245136"][/post]​

Depends on a few factors. What is the competition charging? How much does it cost to fly to substitute airports, and how much extra would one have to pay in time and money to get to the destination from those substitute airports?

It may well be cost-effective; it's just not necessarily a slam-dunk, especially for events of less significance than the Super Bowl.

 

[BoeingBoy]

"It may well be cost-effective; it's just not necessarily a slam-dunk, especially for events of less significance than the Super Bowl."

Definitely agreed, 1) we have very few bigger airplanes to pull off other routes (so we do what is being done - upgrade from a 300 to 400 or 320 to 321), and 2) the economics.

Jim

ps - in the cases of just using a larger version of the same type, there's almost no extra cost of providing the extra seats.

 

[700UW]

All the widebody equipment for the 767 and the A330 are the same, the K-loader for a 767 and cargo containers and the dollies they ride on are all the same they will work in a A330 also. And any ground handiling company at a major airport should have the equipment or another airline.

If you check you will see the Eagles and the Patriots both flew in on widebodies.

And Delta flies 767s into JAX.

 

[funguy2]

mweiss and BoeingBoy: You have pretty much flushed out the issues. I would add that another factor in determing whether or not the fare charged could be (almost) doubled is "drive-ability". PHL-JAX or BOS-JAX is much more "drive-able" than say PHL/BOS-SAN (if the SuperBowl was held there this year).

Naturally, much demand would dry up if a team got to play the big game in its home stadium, or even near by (like if the 49'ers played a SuperBowl in OAK, or if this year's SuperBowl was to be held at the Meadowlands)... But I am not sure if that's ever happened (SuperBowl occuring in one teams home stadium). It certainly hasn't in recent memory. A bit of NFL trivia perhaps?

 

[BoeingBoy]

Food for discussion, cause I haven't fully thought it through....

Would you necessarily need to double the average fare - or nearly so?

Example (using round numbers to make it easy on me and ignoring the lower CASM of bigger planes):

Substitute a 200 seat airplane for a 120 seat plane and assume normal LF is 75% in this market at this time of year. That gives 80 seats normally sold.

If you can sell the additional 80 seats for double the normal average fare (assuming they're empty on 1 leg), don't you at least come out about even? If you can get more than double, do you come out ahead?

Or better yet....

If you can get enough extra revenue [edit- above filling the normally scheduled plane] to cover the additional segment cost (round trip) of the bigger plane, don't you come out even? If enough extra revenue is produced [same edit] to more than cover the extra segment cost, aren't you ahead?

Jim

 

[mweiss]

But I am not sure if that's ever happened (SuperBowl occuring in one teams home stadium).

[post="245156"][/post]​

It hasn't happened yet.

Early Super Bowls tended to be at college stadiums. Super Bowl XIV, for example, was held at the Rose Bowl, where Los Angelenos got to watch their home team get defeated. That's as close as it has gotten thus far.

The trend toward professional stadiums has been gradual, so the chance of a home-team Super Bowl has been increasing in likelihood.

 

[BoeingBoy]

Food for discussion, cause I haven't fully thought it through....

[post="245167"][/post]​

I'm going to start again for clarity....

Same example - normally 120 seat plane.

If you've already got bookings for 140 - 150 a week before the event, do you deny boarding on the smaller plane or put on a larger plane.

Seems like the decision would hinge on 1 things - will carrying the extra 20-40 passengers (plus whatever additional bookings you can get) cover the extra segment cost of using the larger plane or not?

Jim

 

[funguy2]

You are making the assumption that the reverse of the substitution, works as well... That is, if you are taking a 140 seat airplane from another route, you are assuming it is booked to 120 or less.

If it is not, you are just juggling around denied boardings (although, during SuperBowl week, it may be easier to deny boardings to LAX than to JAX, for example).

This becomes more important as the swap gap increases (i.e. if you are swapping a 169 seat A321 with a 120 seat A319, then its a bigger assumption to make that the A321 will not deny boardings, since 120pax on a 321 is a71% load factor, and we know load factors are around 70% on average, and could be 100% or more on specific flights.

 

[BoeingBoy]

funguy,

All true, very true...

As Michael might say, it's easy to talk about but harder to implement.

Jim

 

[MarkMyWords]

Aren't equipment changes done a month or more in advance? Since the location of the event is known well in advance, the seats from the hubs are usually increased after the final schedule is published. This lessens the chances of overbooking annother flight segment to add additional seats for the Superbowl. Once it is determined what teams will play in the Superbowl, then extra sections are added as resources are available. For example, there is an express flight from CLT to JAX, once the playoffs were over, the express flight was upgraded to mainline and several extra sections were added to pick up the additional revenue.

 

[Non Rev]

"The problem with these kinds of opportunities is this: The airline has to add roundtrip capacity... The demand is one-way."

Use pricing/marketing to create demand on the lesser flown segment. IE:Create an esaver special for JAX residents on those flts that have been upgraded to larger equipment due to heavy inbound traffic.

 

[mweiss]

Use pricing/marketing to create demand on the lesser flown segment. IE:Create an esaver special for JAX residents on those flts that have been upgraded to larger equipment due to heavy inbound traffic.

[post="245475"][/post]​

That could offset some of the losses, provided that you don't get bleedover from the higher price points.

 

[speedbird86]

It hasn't happened yet.

The trend toward professional stadiums has been gradual, so the chance of a home-team Super Bowl has been increasing in likelihood.

[post="245172"][/post]​

Unless you're the Detroit Lyons. :blink: