How Airlines Make Money: The Economics of Business Class
Video Overview & Insights
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60 years ago, travel was for the rich. Im happy to sit in a crappy American Airlines for trans Atlantic flight for ยฃ400 than a better Delta for ยฃ600. This was unthinkable decades ago
Airlines essentially make all of their money from business class passengers. That might sound hyperbolic, but American Airlines says it's true. So we'll unpack the economics of airlines, and explain why business class customers are airline's real targets.
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I travel from london to the US regularly via business class, AA is not the way to go, neither is British airways or Virgin (terrible cramped layout). Delta is always the way to go. But when its on my own dime, i always fly American cos it could be like ยฃ370 LHR to places like Seattle, Philadelphia, Dallas, New York and LA. Its worth it
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The best deal for me last summer was zero cost! Yes free trip. How? I stowed away under the wheels
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There's like a lot of objectively untrue things in this video.. it's kind of jarring.. Like this? Seems like someone took available data and extrapolated answers..v but like they don't really know the reasons behind decision making. I feel like this needs someone from the industry actually explaining what's going on here
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If an airline does not offer the highest level the passengers would just fly with anther airline that does offer it. Now it does help the airline in another way. It might take up more room where the people are but it takes up a lot less space in the baggage hold. Economy they are putting one bag in the hold for every 4 sf of seat where in the high end they are putting one bag in for every 11sf of seat so almost 1/4 of the space in the cargo hold that could be sold off to other passengers or to companies that are renting space in the hold to ship packages and mail.
More User Perspectives
so they only make profit if they not make their flight full so if it one single empty its basically is loss which is fked .
@VishwamCKS-w3kI donโt understand why anyone would want to pay more money to spend more time on the plane by boarding sooner
@BC-tp8epIโd love to see an episode about the business of if loyalty programs.
@bigbobut0those first class seats are fire though!
@JaniceTalksThanks for the information , its knowledgeable
@elvesneves3209The surprising thing is that its the cargo that has the highest profit margin
@andmos1001They make money by charging people like teachers who have to take their holidays during high travel times. A ticket a week before a school holiday is usually half the price.
@keeli5575I watched the video by wendover and I hate the accent and cadence.
@jeremyyang6060nice use of Jeb Brooks
@kennethcutter817I think u forgot to mention the part where premium seats subsidize poor people that also wanna fly
@SCPnpcArgh...LHR. One of my least favorite airports. I avoid it as much as possible.
If you can make Gatwick work for your travel - do it.
Legit a copy of wendover productions video
@official-ti9hsJust came here for the Wendover comments
@andrewwhittle9187What the Airlines called making money from loyalty programs - Is actually ripping off their credit card customers with rediculous interest rates and nasty fees.
@tennissir1986ยฃ800 for flights without even a checked luggage is an absolute joke
@sangokwho90% of people that fly business class pay not with their own money but its is payed by companies, nobody in their right mind will pay their money for such things.
@Mike-fk7urOk not how airlines make money. They make it through cargo, thatโs the juice. Also frequent flyer programs
@uselesswatcher1Itโs all fun and games until DEI takes over the pilots and repairs.
@JimCrowRidesAgainits important to consider the loyalty programs. this video blew my mind, very interesting https://youtu.be/ggUduBmvQ_4?si=K3yD1H3btMFgcmp8
@brianbb177But you are taking up more space and resources. It's all proportional.
@dan9222scandiguywow American Airlines is a ripp off
@danizanzibar4344I an always a proud Economy passenger aka. Chicken class passenger ๐๐๐. So this is like a dream for me that's very far๐
@Idrissi_GรผnThis isn't a slow website...
@dodaz5604Price/sq ft/unit of time vs. Quality ..
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I wholeheartedly concur; I'm 60 years old, just retired, and have about $1,250,000 in non-retirement assets. Compared to the whole value of my portfolio during the last three years, I have no debt and a very little amount of money in retirement accounts. To be completely honest, the information provided by invt-advisors can only be ignored but not neglected. Simply undertake research to choose a trustworthy one.
@markcallowayofficial01It has never made sense to me to pay a bunch of extra money for a flight. There is no real reason to pay for severely overpriced upgrades. The cheapest option is always the way to go.
@RockettimeeeThe slow search is done on purpose to create a feeling that the search was well done. Just behavioral economics tricks.
@airplane800Your presentation is highly interesting to watch. Thank you very much and take care ๐
@tonytony3895Airlines really need to start watching YouTube and fixing their stuff based on what you all document
@PoorBoxI flew with delta on business class for a business trip and they donโt have different food. You just get it much quicker.
@ilonajoy4119A tldr video should get straight to the point. This takes over 2 minutes.
@cahaloboyle7086Okay, this is the revenue. What about the costs? What are the margins?
@stephenr7548I think you need to incorporate the load factor of each cabin before getting to a revenue assumption because on any given flight nit all tickets will be sold. Depending on time of year and route, a airline will typically see a certain load factor, such as 95% for example.
@traviskatzen5888Marketing ๐๐๐
@BrickvilleUSA1devaluation of loyalty program is how they make money. inflation
@ff144kYes ok but my legs must stay on 45 degrees in seat . Special for long fly seats must be more softer and comfortable list little bit better for long fly
@kirksdva8310If the Premium economy were to be laid in place of Business class , wont they fetch more money as they occupy less space ?
@anuragrnWhat about price per sq meter and staff cost per ticket (by class)? 1st class occuppies more area and staff time obviouly. But how much more? This more evens out the differences and their rational. The owneres and their freinds want premium services.
@FC_Dobbs48Too expensive... just the roundtrip Dallas to London
@haraldbirk964After paying $750 or $5000 the outcome is the same. Twenty hours of flight time.
@navajojohn9448It is also important to look at the occupancy rate of the seats. If economy class shows 100% occupancy and only 20% for premium classes, equation changes.
@arunsharma-eb4psThank you to the rich people who buy expensive tickets so that we can buy a ticket at a small price and there is no consolation for the envious
@THm0147Very basic explanation. To really understand how airlines make money search for "How Airlines Quietly Became Banks"
6.2M views 2 years ago
Has Wendover got a new name now?
@cypher686You need to also add the US dollar amount in with the British pound
@kdharley07