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Browsing Tag: discomfort

You Get What You Pay For Rant: Why Economy Class Is What It Is

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Photo and Press Release from Boeing... SEATTLE, Feb. 11, 2014 /PRNewswire/ -- Boeing's [NYSE: BA] passenger-inspired 737 Boeing Sky Interior marked its 1,000th milestone delivery with Norwegian Air Shuttle ASA. The 737 Boeing Sky Interior features modern sculpted sidewalls and window reveals, LED lighting that enhances the sense of spaciousness and larger pivoting overhead stowage bins. "The Boeing Sky Interior is delighting passengers and our airline customers," said Beverly Wyse, vice president and general manager, 737 program, Boeing Commercial Airplanes. "It's adding even more value to the Next-Generation 737, which already delivers the best economics, reliability and fuel efficiency in its class." Norwegian Air Shuttle was one of the launch customers for the 737 Boeing Sky Interior. This is the airline's 48th Next-Generation 737-800 with the new interior, making it the largest airline operating with the 737 Boeing Sky Interior in Europe. "Our goal is to provide passengers with the ultimate experience in comfort and convenience when they fly with Norwegian," said Bjorn Kjos, chief executive officer of Norwegian Air Shuttle. "The Boeing Sky Interior on the Next-Generation 737 helps us to deliver just that." A passenger survey conducted by Norwegian Air Shuttle soon after the airline began service with the new look found that more than half of respondents rate the 737 Boeing Sky Interior more comfortable than the standard interior. And passengers reported they feel "happier" in the new interior. Since the first 737 Boeing Sky Interior was delivered in October 2010, more than 60 customers have ordered the new interior. Approximately 85 percent of Boeing's backlog of more than 1,900 Next-Generation 737s will be delivered with the 737 Boeing Sky Interior. The passenger-preferred interior will be standard on Boeing's newest family of single-aisle airplanes, the 737 MAX.

Norwegian Air Shuttle economy class on a Boeing 737 – Photo: Boeing

When I was studying in Australia on the minutiae of airline management, it was drilled into me that airlines had three levers they could adjust to control their relative profitability: price, product, and capacity.

It makes sense. Do not get me wrong, this is true – but even then I knew it was a gross over-complication. It only really made sense in the premium cabin, where passengers made their airline selection on a factor other than pricing.  Airlines don’t actually deal in seats; a seat is kind of a nebulous thing that cannot be quantified easily.

Airlines deal in unit cost and unit revenue. You’ve all probably heard the term CASM (Cost per available seat mile) thrown around, same with RASM (Revenue per available seat mile). Well, when you buy a seat, you are buying capacity on the flight at a specific fare.

It gets worse, because the available seat mile is extremely perishable. It’s gone, forever, once you close the door.  There are a good deal of complex price discrimination strategies employed by airlines to ensure that their customers never pay less than they ought to – but before I hurt your heads with complex math and graphs, allow me to completely change the tone of my argument.