Re: back-to-back question

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Average fare paid to a US based airline is $150 according to Business Week (likely each way) up a bit from last year.

Most airlines do confirm that more than 80% of their rev comes from less than 20% of their customer base.

Another factor is how many folks wouldn't take the flight if they couldn't get the b2b fare.

My 2 (1.2CAD) cents.

Matthew

Original Message:
-----------------
From: Addison Schonland addison@schonland.com
Date: Thu, 13 Jun 2002 15:14:25 -0700
To: AIRLINE@LISTSERV.CUNY.EDU
Subject: back-to-back question


I was just asked to estimate the size of the "problem" for the airlines in
the US....here is my estimate.

Based on 570m passengers...if 1% do this means =3D 5.7m people per
year....using b2b only makes sense for FF....so that means at least 6 trips
per year....assuming a full Y (anyone buy those anymore?) costs $1,200 but
buying b2b saves at least 50%....so a person doing this would not pay $7,200
per year but $3,600....then doing the big math this would equate roughly to
6m people paying $3,600 less than they should - my estimate is that for
every 1% that do this, the "problem" is valued at $20.5bn.

I of course think much more than 1% do this.

However the numbers are huge - any arguments with my logic or math?

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