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Comment by gtowey | Hacker News Reader

Or they could actually charge ticket prices that cover the cost of doing business and stop treating their passengers like a it's a time-share sales pitch the whole way.

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They can't do this most of the time because for most of the year on most routes, supply outstrips demand (i.e., many/most flights on most airlines fly at least a little bit empty, often significantly empty – overall load factors are about 80-85%). They have to charge fares that customers will be willing to pay, even if that means losing money on a given flight. They can only charge profitable fares on the routes and times of year when demand surges (peak routes, holiday periods, major events). They have to keep their network capacity high enough to satisfy the peak demand, but for most of the year and most of the network, demand is lower, so they have to settle for break-even or loss-minimization. (For the record, I co-founded a flight search startup that became a fare optimization platform.)

Was that Flightfox? If so, I loved using it, helped me save so much money but also time :)

It sounds like there’s a problem with having too many flights that are barely full and hence unprofitable. AFAIK the federal gov spends significant money subsidising many “small airport” routes even if they’re barely used.

That’s just the nature of the beast. Airlines have to align large capital intensive assets with fluctuating passenger demand and fuel prices. And at congested airports the slots are also expensive assets that get auctioned off, and operate on a use it or lose it basis.

Spirit and the other LCC’s problem is that the legacy airlines are now offering a similar product in their basic economy that has less hassle, higher frequency, is sometimes eligible for earnings on their massive loyalty programs, etc.

The EAS Program (Essential Air Services) is the US Government program which subsidizes routes to small communities of you're curious.

I only wish I could find these "a little bit empty", "80-85%" flights. Any flight I've been on in the past 4 years has been filled to the brim and gate-checking anyone who didn't pony up for Premium Economy or better - or even outright oversold and handing out "please take the next flight?" vouchers.

(Seattle is my home airport, so maybe this has something to do with it - but come on, SEA is no ORD or ATL...)

Sounds like a good way to lose all your customers to the other airlines that charge less.

Yup, and this is exacerbated by how services like Google Flights work. There's little visibility into any kind of "quality" metric, but prices are always front and center. So why would you optimize based on anything else?

If the lowest prices cause insolvency for the company, then let your competitors go bankrupt to win in the long run?

I guess some of the legacy carriers are now drinking champagne since they got rid of one of the more aggressive ULCC competitors.

However, if you wait till your competition goes broke, you need to ensure you survive long enough and stay big enough so you don't get bought. That's not exactly easy.

Southwest used to do this, but then somehow got a CEO that burnt it all down instead of raising ticket prices by $20-30.

Before them Alaska Air was similar, and is now similarly bad.

Having the customers actually own the airline seems like a reasonable approach. The trick is kicking all the assholes off the board, so they can’t fire leadership for treating customers decently while turning a sustainable profit.

True, Alaska skimped on maintenance so much they killed a plane full of passengers that should never have died. https://en.wikipedia.org/wiki/Alaska_Airlines_Flight_261

I can't fathom how this airline was allowed to keep existing.

Consumers only look at bottom line. There is basically two markets with airlines, higher end market with credit cards and premium seating; lower end where consumer solely looks at ticket price.

A huge number of businesses survive on whales, it's becoming really apparent. I'm kinda surprised how common it is.

I wonder if this will be the next "market" to exploit if ad revenue ever dies down too much, or if it's one that's always been there, and I've simply never been a part of.

this is a direct result of the shrinking middle class and the greater concentration of wealth. this is the canary in the coal mine

They do, it’s just barely enough to cover the cost of doing business and volatility.

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