It’s that time of year again in our office. People are starting to plan their summer trips to Europe. And one of the most frequent questions we get is, “Can I take that United nonstop from San Francisco to Paris?”
Except that there is no nonstop anymore on United from San Francisco to Paris. The airline canceled the flight three years ago.
The next comment is almost always, “But that plane was full every time I took it.”
True, but it wasn’t the right kind of full.
Here’s the issue with flights to places like Paris, and Italy for that matter, which are hugely popular destinations for American tourists. Tourists don’t make a route profitable. Airlines make their money on the folks up front paying business- and first-class fares, or at least the corporate travelers paying last-minute coach fares. With everyone paying super-saver fares, or using frequent flier awards, the airlines lose money, even if the plane is full.
That’s why cities like Frankfurt, which serve as hubs to most of Europe, can be very profitable even if they don’t seem like a popular destination. London is another example, where the discount fares can be some of the lowest to anywhere in Europe. But premium fares to London are high, and some travelers do pay those prices. So the flights continue, along with the bargains to fill up the back of the plane.
Hawaii flights can and have also fallen victim to the full-but-money-losing problem. While there is some business travel to Hawaii, there isn’t much. So there are almost no people on the plane paying $2,000 or so for their tickets. Whereas on a cross country flight, there will always be some last minute business travelers or corporate types who won’t take the chance of upgrading with miles.
And speaking of those upgrades: Ever noticed that when you do upgrade a flight to Hawaii that the first-class seats are pretty lousy, with less than normal legroom? It’s not your imagination. It’s a similar reason too, because there is so little business travel, the airlines feel less need to compete.
So while I will complain as much as the next person about frequent corporate travelers who fill up the overhead bins and take most of the upgrades, they are also the reason the rest of us get more nonstops — and when we do manage to upgrade — a nicer seat on the plane.
{ 5 comments… read them below or add one }
I know that Southwest is beginning to make an effort to get more of the last-minute business travel, however, they have had a string of profitable years without a focus on the “front of the plane.” Heck, they don’t even have a front of the plane.
How can they make profits year after year and other airlines can only make a profit when they have plenty of “business travelers.”
In this day and age of corporate cutbacks, airlines are going to be bleeding red ink once again. Rather than taking care of their bread and butter (85+% of their passengers) they focus on the cream.
OK … here’s my rant. I USED to take the non-stop U.A flight from Paris to LA and it was canceled. Then I took the non-stop to SF and transferred to LA.
The SF flight was canceled and I was forced to go via IAD or Chicago unless I chose to make the first leg from Paris to London or Frankfurt.
But I am still asking (and it’s been more than five years), why is there only ONE flight From DC to Paris when there used to be a second one that departed close to midnight. The departure and the arrival times were better for my schedule and for traffic on both sides of the ocean. And both flights were always full.
Have faith — Delta / AF offer non-stops to the West Coast. But for those of us who are Star Alliance members – we need to rethink.
OH, by the way, United closed the Paris station and transferred people to Frankfort or to London …. that is if the personnel wanted or could go. Trying to be faithful to United takes an effort.
Is United losing money or losing passengers?
Good points Charlie, but Southwest actually sets their fares so they can make money on the bread and butter. Yes, they are reasonable, but as most of our agents know, they often aren’t the cheapest on any given trip…because they dont sell a lot of the lowest discounted seats. And they have a simple system which is cheaper to run. (All the same plane type, no meals, sold or otherwise, no extra fees (which saves time.) Many of the majors run this crazy system where they lose money on many of the seats they sell, in hopes of making it up on the high end traveler. And as we have seen, it doesn’t always work.
Charlie Leocha said
In this day and age of corporate cutbacks, airlines are going to be bleeding red ink once again. Rather than taking care of their bread and butter (85+% of their passengers) they focus on the cream.
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The cream? Ma and Pa Kettle who travel once or twice a year? Dont care who they fly as long as they get the cheapest fare? The Business/Frequent flyers accounts for a high percentage of revenue for all legacy carriers. All, hold seats to the day of departure, and in doing so, are under great pressure to sell those seats to last minute travelers at a HIGH rate. Should the flight go out with those empty seats NOT SOLD, that’s “lost revenue” to that airline. Actually, those business travelers subsidize those Ma and Pa Kettles and their airfares!
Most airlines were in bankruptcy in the early part of the decade. Most didnt have the capital to invest in fuel hedges, certainly not in bankruptcy. Southwest took advantage of that and hedged. How impressive to see an airline fly around with some of the LOWEST load factors in the industry and still make a profit. Check the DOT stats monthly, load factors are low for them right now. High 60’s to Low 70’s. Fuel costs are (temporarily) down right now. That works against their hedges, so I predict a loss for them in the final quarter, maybe going to the first.
According to this article, WN has plenty of business travelers:
Southwest Airlines’ CEO knows he’ll never have to pay up. There’s no way to prove him wrong because airlines don’t know the purposes of many customers’ trips.
http://www.usatoday.com/money/industries/travel/2008-12-25-southwest_N.htm
Kelly maintains that internal research shows Southwest is already No. 1 in domestic business travel, and he is steering Southwest to capture even more of the business-travel market in 2009. To accomplish that, he’s doing some heavy tinkering with a business model that has kept the airline profitable for an unprecedented 35 consecutive years.
Karen,
When Continental joins the Stat Alliance, you’ll be able to connect through Houston to Paris. Though, if you fly in coach, I don’t think you’ll appreciate 31″ of seat pitch.