How Airlines Make Money: The Economics of Business Class

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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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[@dowjones4573]

We're living in an alternate universe where TLDR makes Airline videos and Wendover makes Finance videos

[@finnishgovernment2583]

Top tier comment

[@honor9lite1337]

Ok

[@markchang2964]

Lol

[@wonderplaceholder]

If Wendover is holding TL;DR team hostage to make airplane videos, please blink trice in the next video

[@remyphilly5168]

Lmaoooo was coming to say this

[@hsupergabe]

Lol

[@Indikissa]

Was about to post something similar

[@vinterskugge907]

It's "thrice". Trice means something else. Don't make me say this thwice!

[@wonderplaceholder]

@@vinterskugge907 thanks. I got lucky and trice can also fit in the comment

[@Maxyy40]

TLDR: “ Can I copy your homework?” Wendover: “Sure, just make sure you change a few things so it isn’t obvious.” TLDR: No

[@TLDRbusiness]

I do acknowledge the similarities here, but following the recent news from AA, Delta and others about the acceleration in premium cabins we thought there was enough new ground to cover since Wendover's 2017 video. We also focused far more on the economic principles at play here and the business behind these decisions, where Wendover spend much more time on the history of airline classes and how we ended up in the place we are today. I felt that given both of those things there was space to come back to this topic from a 2023 more economics centered perspective, but having just rewatched Wendover's still excellent video for the first time in years I can absolutely see the comparison - Jack

[@GonzoTehGreat]

I think you're joking. 😂 Regardless, this topic is interesting and topical enough to be covered by several channels. This particular video is informative, well presented and covers the subject in it's own way. I honestly think Wendover would approve!

[@Maxyy40]

@@TLDRbusiness I have nothing but respect for both of you. Just teasing.

[@ItsTheBoombox]

Wendover doesn't have a monopoly on plane economic videos

[@charliechalk]

​@@ItsTheBoomboxIt more or less does

[@porthose2002]

Another way to describe this could be: How much discomfort are you willing to endure to get from Dallas to London?

[@raniahamid2945]

I fly dubai to dallas almost 6 times a year. I use points and splurge for business. 100% worth it for the comfort and emirates experience

[@skyscraperfan]

If economy class costs $100 less than business class for every hour flown, that means that I "earn" $100 per hour for sitting in an uncomfortable seat. That seems like a pretty could deal. I think that most people who fly business class could find better ways to spend their money. Hardly any of them is so rich that he has run out of ways to spend his money.

[@Azel247]

@@raniahamid2945 But you need to get points from somewhere, usually from spending on other things. It's not free...

[@duncanhw]

​@@skyscraperfanIt's also why people only ever fly business class on someone else's money

[@dionysuseros7423]

@@duncanhw Not always. I take it occasionally - either both ways or just one way (with the other in economy) if the length of the flight is super long, and the price difference is not TOO crazy.

[@TheLokiel]

Some issues with editing there folks. I disagree with you on one point: you argue that one of the benefits of first class is boarding first. Having flown first class several times in the last few years, I can tell you it’s the opposite: one of the benefits is being able to board last. You just stay in the airport lounge sipping champaign until the last minute to not be crowded in the queue with the other people. The announcements you often hear in the airports for people who are late for a flight? Most of the times it’s for first class passengers who are in the lounge.

[@afonsosantarem]

I totally agree with you. When I’m flying business class I know I can stay longer in the lounge and just board the flight when it’s almost ending

[@JamesTenniswood]

Yes no one boards first in business class

[@TheLokiel]

I think the TLDR team doesn’t fly business or first class enough. We should help them by finding them more customers.

[@espurr3496]

You really don't know much about aviation do you.

[@mareviq]

This greatly depends on the layout of the airplane. I've seen economy class passengers put their bags in the overhead bins of business class if they think they can get away with it (since the business class people surely have boarded already, so any empty bins are free real estate, right?). This only happened if the plane was boarded from the very front and everybody had to walk through the business section to get to their seats.

[@J20666]

Most people sitting in the business class seats don’t pay from their own pocket. They can even earn points by travelling on business class air tickets to exchange their private travelling tickets. There is no even one disadvantage.

[@HaakonHawk]

It should be noted that some countries (most countries?) consider airline points earned through work-funded trips as taxable income. Leading to a bit of an accounting headache for both the individual and the employer. So a lot of employers require employees to check the "do not earn points" box when ordering tickets.

[@mnewm21]

you'd be surprised, I know heaps of people who do as they want that space. Pandemic has changed what people want from flying and most don't want to be jammed up next to 9 other people where they are at risk of getting sick before they even start their trip. I saw a survey in Europe talking exactly about this and 75% of respondents valued extra space over price point and would pay for it and I would agree with them for long haul (flights over 8hrs). Probably why Premium economy seats are nearly impossible to get without booking months in advance.

[@davidlane180]

The inverse is true. Most premium seats are paid for by individuals on holiday or visiting friends/family.

[@ic04014]

"For an extra £150 you can get a 'main' cabin where you get a lot of the same shit you got 15 years ago as part of your ticket"

[@muni5450]

It’s more like 15 years ago you were forced to buy these upgrades whereas today you have the option. Look at Ryanair, horrible service and quality but cheap - I’m happier with the savings than I am with a legacy airline with good service

[@honor9lite1337]

​K

[@tomgn8412]

@@muni5450Exactly, it’s all for the battle of pricing. Me, I prefer lie down seats, meals, drinks and more bags included. Why should anyone else pay for what I order? Imagine a restaurant that splits the entire night’s bill evenly amongst every customer, doesn’t make sense and isn’t fair. Prices for basic tickets have not been lower ever in history, people keep comparing to “back in the day”, totally oblivious that flying was a luxury reserved for rich people. Now you can cross the US for under $200. If you want more, shell out, if not, enjoy the savings and understand the product you bought.

[@alvaroga1n]

Cry about it

[@tomgn8412]

@@alvaroga1n I will, modest as it may be, but on MY Hawker. Try earning miles, or whatever you call that…

[@nettyswobb1]

I'm someone who sometimes travels on Business class for work, and for me it's almost essential for long flights. I previously wondered why companies would pay for business class and not prefer to save money by sending people via economy. However, when you're expected to work and be productive ASAP after you arrive, when you're tired, sleep deprived, mentally drained and jet lagged, you're ability to be productive will significantly drop. When on holiday you can have a day or two to rest and acclimatise and rest, you can't do that on a work trip. Having business class will allow you to stay comfortable and well rested, to allow you to actually do your job well when you arrive.

[@skyscraperfan]

How many employees are so expensive though that making them arrive a little less tired is worth an extra $1000 or so? That is especially on the way back from the business trip. I usually go on vacation to Asia, which means trip of about ten to twelve hours and I always fly economy. Usually I fly over night and do not even sleep a minute. Still when I arrive I am not tired. Not having moved for so many hours saved to much energy that I start exploring the city right away. Last year I did the fifth longest flight in the world: Auckland to New York City. It was not exhausting at all. Maybe that will change if I am older one day, but so far it is okay.

[@MooKyTig]

@@skyscraperfan That's awesome for you... not sarcasm at all. But, my man, you can't pretend that a 17 hour flight wouldn't wipe out most people. And even if not completely wiped, "not exhausting at all" that kinda makes you unusual in a good way. Also, not everyone here is the same height. Yeah economy might be good enough if you're 5'3" not so good if you're 6'3".

[@skyscraperfan]

@@MooKyTig 6'3'' actually is pretty much my height. I am 190 or 191 centimetres tall. Compared to all the hard things in life a long economy class flight seems like a breeze though. A normal eight hour day of work in an office feels much more exhausting for me than an economy class flight of the same length. Just the thought that each four or five seconds you get one kilometre closer to your destination makes it so much more comfortable. When am in a plane I think about all the hard working people on the ground, while I sit on my ass and fly through the air with the speed faster than many bullets. In addition to that the flight itself usually is not the most exhausting part of my journeys. I walk through large cities during high temperatures and high humidity. Doing nothing on a flight is quite relaxing in comparison.

[@MooKyTig]

@@skyscraperfan That's all lovely. But dare I, respectfully, continue to suggest that the vast vast majority do not share your viewpoint.

[@Goman693]

I'd love an in depth breakdown of Airlines' Loyalty Programs - how they make the deals with various companies, where they make their profit, what the tradeoffs are. Sounds like an interesting watch!

[@getnohappy]

Honestly, my wealth goal is just to be able to buy a business class flights and not have to worry about it ^^

[@test-hd9yc]

I am at a stage where I can buy a business class flight and not worry about it but a lot of flights I do don't even offer lie flat seats, just a recliner which is not worth it even for me, some routes don't even offer a business class. I end up just flying economy a lot of the time. First world problems, I know.

[@xXRealXx]

@@test-hd9yc Which airlines have your favorite business class?

[@skyscraperfan]

Even if I was rich, I would hate o feel overcharged. Space is the only really useful benefit of business class, but as the video pointed out, in business class you have to pay even more money per square foot than in economy class. That feels unfair to me. If I buy more of something, I expect to pay a lower price per piece. For me it seems that most people dream of flying business class BECAUSE it is so expensive an most people can't afford it. That is very irrational though. A high price should make a service or product less desirable instead of more. It seems to be the same irrational thinking that makes people buy Prada shoes for $500 a pair, which cost less than $20 to produce. One thing is to be rich enough to be able to buy business class seats. Another thing is to be so rich that you ran out of BETTER things to do with that money. Usually business class costs at least $100 per hour more than economy class. So sitting in the less comfortable seat saves you $100 each hour. That seems like a pretty good deal to me - even if you are wealthy. There are even some billionaires that always travel economy class although they are rich enough to buy the whole airline. An example was the owner of IKEA. He died an an age of 91 with a net worth of more than $50 billion, but he still flew economy. He also drove an old pretty worthless car. That's a role model for me.

[@test-hd9yc]

@@xXRealXx Cathay Pacific had the best service, Delta One cabin was the most comfortable in terms of product, but the service was meh. I haven't flown first class (like La Premiere and similar so I can't comment on those)

[@skyscraperfan]

​@@victork6994 If you still have to earn money with your own work, it seems a bad idea to waste it on business class. Business class means spending about $100 per hour extra just to sit more comfortable. I not not see flight time as a "net time". Flying is just a way to get to a place where I finally will do something productive or enjoyable. Time at my actual destination is much more valuable. It makes more sense to invest into that time. Of course if your "problem" is that you have so much money that you don't know how to get rid of it, you can waste it on stuff like that. Personally the minute I arrive at my destination I would regret having taken business class.

[@robot_girlyman1556]

Something I think you should discuss is how airlines based in the US don't have comparable business and first classes to European and Asian carriers

[@RF-lg4rq]

US airlines aren't subsidized like their Asian or European counterparts.

[@mr.mike678]

There is another reason too. The "Weight". If the Airline puts economy seats everywhere, you'll need another plane to carry that plane. So airlines can reduce weight without losing money with these class options.

[@Immudzen]

For business travelers on international flights you also missed a benefit. With those seats you are more likely to be able to sleep/relax on the plane and that means it is quicker to be productive on the arrival end. If I take a business class seat from boston to frankfurt it leaves boston around 6pm, you eat a meal on the flight and sleep and you wake up in the morning in Germany. It is not as good as a full nights sleep but you can be functional for work that day or the day after.

[@skyscraperfan]

That only makes sense if you are so well paid that a little sleep is worth those extra $1000 or so. Otherwise it would be cheaper for the employer to give you one day off.

[@eile4219]

@@skyscraperfan most of them are pay by the companies, so it’s worth it.

[@WebMentorCR]

@@skyscraperfan but you are thinking just for the ticket. One night extra out, means one night of food, and one night of hotel, which in large cities again, count for quite some money.

[@strafrag1]

Hi. I'm a retired airline marketing guy. You totally neglected to include the passengers who are on upgrades and using their miles to pay for these upgrades, not to mention the people who are on totally free tkts earned thru miles. This brings your totals for each cabin down by thousands in revenue. Yes, the number of these reward seats are low, but the revenue is still much lower.

[@FuZZbaLLbee]

When people in economy despise how much money is paid for luxury seats, they can still think that without those, their ticket would be more expensive.

[@jakel8627]

100% agree. Thank the rich. And also thank the whites, who invented planes.

[@dVector13]

That is incorrect. As the video informs, the most luxurious seats are not cost effective. Not only this, airlines report higher and higher profits while prices increase, so it is more likely that the airlines are already price gouging the consumer since these luxury seats dont seem to keep prices from inflating every year.

[@duncanhw]

​@@dVector13You've not taken competition into account here. The premium seats do indeed lower the price you'd have to pay for economy.

[@mnewm21]

@@dVector13 it depends on the number of airlines serving the route. If you have multiple premium airlines serving the route then you can find some pretty competitive seats in premium cabins. If only one airline serves it then yeah probably not so. I often do the fly through a large hub flights as they are always cheaper if you want a premium cabin, plus you get more time to enjoy your premium service if you stop along the way! Multiple lounge visits etc give you more value for your dollar if that is what you desire. I just like to get out of the tin can for a while.

[@moathalmahroqi]

Exactly, the same idea came to me

[@КонстантинПономаренко-я7я]

Premium seats earn 60% of money while taking 60% of space. Not really a huge benefit.

[@Nhicki]

Fewer passengers cost less to transport, so if they rake in the same amount, or more, per square ft , they should happily do so as it comes with a bigger profit margin

[@777Mikos]

yeah that's what didn't make sense to me too. I guess they implied that premium passengers also spend more on ancillary, but didn't show any statistics on that. It seems like the Main Plus was actually the best profit per space.

[@Psi-Storm]

Yes. And the premium seats lead to more expenses for the cabin crew, food, lounges. The big factor is weight and cargo space. A first class seat takes as much room as 6 regular seats, but the person sitting there just weights 80 kg, instead of 480kg combined and might have 2 checked bags, while the others have at least 6. The airline can sell additional cargo space of 400kg for every first class seat. You also can't fill most widebody airplanes with just economy seats due to weight restrictions. Then there is demand for economy seats, with fewer cheap seats, they can upsell them more closer to the travel date. And of course the prestige from having great business class and first class seats. People pay more for AA flights than for low costs carriers even thought the seats and service in economy are basically the same.

[@skyscraperfan]

But the number of passengers is limited. So you can't replace a business class seat with three or four economy class seats without getting those additional two or three passengers.

[@Da__goat]

Its more $/sq meter on a plane. If you make a regular economy seat have a few more cm of legroom you can charge 30% more for that same seat.

[@MarcPagan]

"Why are seats so small in coach you asked? Because customers want them that way." Bob Crandall Former American Airlines CEO He was more than correct - Ex During the 90s, over 95% of first class passengers at United Airlines were using points. Either for an upgrade, or for completely free first class ticket.

[@jaymzx0]

I'm just a regular Joe that flies a lot for work. Work only pays for main cabin seating, but I use the points/miles from those tickets to pay for the upgrade here and there (or the airline automatically upgrades the seat based on 'status', or how much you spend in airline tickets for the year and/or on a loyalty credit card). If it's an early morning or late night flight, I may like to snooze without unknowingly encroaching into my neighbor's space. Useful when you're flying redeye so you can get to your work site in the morning and have a productive day, and maybe fly back or to another site afterward. It really sucks to spend 12-20+ hours on a plane in a given week, so little things like a wider seat or a hot meal make it a bit more bearable.

[@rsantana389]

There is also a lot of money coming from the transport of cargo, below the passengers there is a whole very profitable market destined to the transport of (rather light) goods that need to be delivered fast

[@theyjustwantyourmoney4539]

I love flying Basic Economy, sitting in the middle I ask for my way out of the seat, I stretch my legs whilst waiting for the toilet to be vacant and finally back in my seat the toddler behind starts kicking off and crying. We all finally arrive. 😁

[@cahaloboyle7086]

A tldr video should get straight to the point. This takes over 2 minutes.

[@autarchprinceps]

Can somebody explain to me what the benefit of boarding sooner is supposed to be? The plane won't take off until everybody is boarded, so it sounds like waiting in the plane vs waiting in the boarding seat area to me. If anything anybody who is getting airport lounge access would rather stay there and be boarded last, instead of boarding first, no?

[@skyscraperfan]

The reason why especially economy class passengers want to board earlier is the limited space in the overhead bins. People prefer to have their bag in the bin directly over their own seat. I access my bad a few times during a flight and if is above your own seat nothing can fall onto another passenger. Also the bag of another passenger can't fall onto you.

[@wlmsears]

Once you are on the plane, you can just relax. Until you board you have to be alert waiting for your turn to board. In first class, they will offer you drinks, while you wait and you can work on your computer or just chill out. There is enough room so you aren't being jostled by other passengers as you would be in coach.

[@stankythecat6735]

Oh my god … it’s the best being first on. Relax have a drink and lots of space

[@mnewm21]

depends on whether you are sitting there sipping champagne and eating caviar while you wait for everyone else...I thin kthey should change boarding groups to window seats middle seats aisle seats. More time is wasted in boarding waiting for people to get up so that others can get in to the hard to get to seats than anything else.

[@skyscraperfan]

They don't do that as it would separate groups during boarding. I also think it would be unfair if window people are allowed to board first and get earlier access to the overhead bins.

[@ShikiByakko]

There are actually ways to get into business without having to pay full price. Using magic points/mile- fuu and a little bit of research and patience, you can pay basically the same as economy for Business class seats. In fact, I know that most of the people of the most fancy seats actually get them not by paying for them, but using miles.

[@bentriggs4766]

A loyalty programme video would be interesting. I’m sure a lot of people have a rough idea of how it works but few could properly articulate it

[@hockysa]

2:20 the slowness to load is artificially created. it gives the user a sense that the search is "working hard" to find available options.

[@uuuuuu352]

It gives a sense to me that it is working hard because it is inefficient.

[@Joan-t8l]

It 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.

[@ramonsean-gx6qd]

*Fantastic video! I have incurred so much losses trading on my own....I trade well on demo but I think the real market is manipulated.... Can anyone help me out or at least tell me what I'm doing wrong??*

[@EarlRoy-x1n]

Same here, My portfolio has been going down the drain while I try trading,l just don't know what I do wrong. .

[@HamzaKairo]

Well...l will advise you should stop trading on your own if you keep losing and start trading with an expert because trading with an expert is the best strategy for newbie..

[@Joycejonas3345]

I think l'm blessed if not I wouldn't have met someone who is as spectacular as expert mrs Janet.. High recommended

[@CalvinFrancisco-gu7jy]

Wow, I'm surprised to see Janet mentioned here as well. I didn't know she had been kind to so many people

[@Mahmoudmansour-c6z]

​Mrs Janet successful stories are everywhere, all over the place.

[@colierarcherwilliams]

Via Wendover productions

[@0ppaiDragon]

I'm a business traveler... It makes me feel AWESOME when I see how far I've come from my family humble beginnings.

[@patoises]

great, however this video does show how airlines make more profit from people like yourself who is willing to pay considerably more for a product (business class) that delivers very little extra value apart from the feeling of "how far I've come" to differentiate myself from what I came from

[@0ppaiDragon]

@@patoises the difference is that my company and status pay for it. To this day, I've only pay once for Premium Economy on a personal international flight. The problem with most people online (& irl) is that they think things should cost them the same or just a little bit over the cost that a corp pays to design, make, market and deliver said "thing/service." Airlines don't have the luxury of Google/Meta of giving you nothing and selling all of your data in return. Companies need to make a profit to exist otherwise there would be no jobs. Lastly, I'm not going to apologize for my last sentence, my family worked very hard (what we call shit jobs) for me to get a good education and in turn now I can provide luxuries for them that they never imagine ever attaining.

[@Te-nl2cf]

​@0ppaiDragon what?!

[@tonytony3895]

Your presentation is highly interesting to watch. Thank you very much and take care 😊

[@kevincronk7981]

I've heard of the super fancy first class seats like the flagship first, but every time I have ever been on a plane I have seen nothing even resembling it, just all the seats packed together like sardines with the front seats having slightly nicer and more spaced out seats

[@jaymzx0]

It depends on many factors, but many times the two-aisle widebody planes will load from the center. If you turn to the right upon entering, you go to the main cabin. If you turn left at the boarding door, you end up in the 'premium' seating area.

[@Keestral]

Remember that in single-aisle narrowbody aircraft is nothing like first class in the dual-aisle widebody ones. Domestic first class is somewhere between premium economy/business class in terms of what you get.

[@erebuxy]

@@jaymzx0 This. Sometime, first and business also get a dedicated boarding bridge that economy passengers are not allowed to use.

[@heikachan8052]

Please, in the future, can you include metric measurement if you present data? I really don't know if 4^2 feet is a lot or not

[@ZeeengMicro]

It's roughly 46 cheeseburger². Hope that helps

[@silluete]

Are we talking double or single here?

[@heikachan8052]

@@ZeeengMicro thank you, but I'm not American 🥲is it 1 cheeseburger = 1 sandwich 😂

[@FakeReal007]

You have two feet on you, use that to imagine the approximate length.

[@mabamabam]

Divide by 10 for m^2

[@JRay2113]

The better seats are mostly taken by frequent flyers as a perk. The industry is gear towards the corporate class.

[@aravinz_hd]

please make a video about loyalty programms and first class

[@moathalmahroqi]

Thank 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

[@miguelrodfher]

This has got to be one of the best explanation videos on YT

[@romaindebroux9756]

I’ve been watching Tldr for many years and a video on airlines loyalty programs would probably be my all time favourite

[@dmterrell7607]

I flew from Chicago to Dubai and very upset Emirates don’t offer Premium Economy with this flight. Airlines should expand premium economy because I would spend extra to be more comfortable.

[@rhéacevert]

At least richer passengers are still put in the least safe part of the plane.

[@ashman4827]

Which is still safer than being on the road….

[@CineZoneYT]

Why do you want the « rich » to be unsafe? By the way, most people in business get paid just as much as you, but they have to travel for work a lot.

[@rhéacevert]

@@CineZoneYT or maybe I just don’t want air safety to have a massive premium slapped onto it.

[@CineZoneYT]

@@rhéacevert Some people don't want to suffer in tiny seats for 10 hours

[@mnewm21]

given where the Boeing planes fall apart in the plug door I would suggest the rear is more dangerous now! I haven't seen many planes that fell out of the sky that anyone survived better being in the back than the front, I think this a myth! Maybe you are more likely to be shot in the front, dunno?

[@Inigo_The_Son]

Many people with status get upgrades. For domestic flights, I always buy a first class ticket, because my status is pretty low, and I am not confident that I will get an upgrade. More often than not, the passenger next to me got a free upgrade. On international flights, you will probably not get an upgrade from cattle class to Biz, but you can get upgraded to the next cabin, and there is a domino effect.

[@arunsharma-eb4ps]

It 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.

[@justdontworrybehappy]

please do another video about this its really good! 👍

[@pentestical8265]

Actually premium economy typically earns the airline around 6% more each year than business class according to United. Nonstop Dan had a short about this recently, Many airlines have more seats in premium economy, and the service costs associated with PE is much lower than business class.

[@navajojohn9448]

After paying $750 or $5000 the outcome is the same. Twenty hours of flight time.

[@mindguru22]

I would still prefer 1 year of home arrest than 1 year in solitary cell. Time is not the only element.

[@traviskatzen5888]

I 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.

[@carlcramer9269]

If I recall, on the Titanic, the 3rd class passengers were actually where the ship made money - 1st class was mainly a prestige item for the shipper. The current system, where luxury tickets are overpriced, actually seems more fair to me. The rich are sponsoring the tickets of the poor.

[@alexeecs]

The economics of loyalty programs and all those perks you get from your expensive credit card please!

[@dVector13]

The shade thrown at AA's website earned my sub

[@bigeye101]

Kinda missed the component of what's travelling in the belly of the plane. Amazon parcels can travel quite commonly in passenger plane bellies as they can in pure cargo planes. Pretty sure those cargo components bring in a pretty penny for the airlines too.

[@geoffworley5275]

Maybe? You seen all the crap people check in, it's a miracle the plane can fly with all that

[@Ludvigvanamadeus]

that's barely scratching the surface of airline ticket pricing. It's very likely that out of, say, 300 passengers on board, every single one paid a different price for the seat, even when they are sitting next to each other and got identical service and benefits thanks to RBDs, married segment control, revenue management, fare seasonality/advance purchase/minimum stay/dynamic pricing/one of a 1000 other factors that impact the final ticket price.

[@richardc020]

Stellar script and graphics to explosion a not obvious economics concept. & Yes to the economics of loyalty schemes!

[@andrewtaco]

As others have pointed out, this video is similar to Wendover's video but I'm sure we all understand and trust in your journalistic integrity. I do think you have a great opportunity to create a companion video on the rise of business jet charter flights and the concept of fractional ownership in business aviation such as Netjets, Flexjet, etc.

[@JohnJourdan88]

It’s all fun and games until DEI takes over the pilots and repairs.

[@MrEnzoPuttini]

"My wifi does not suck" he showing his download wile uploading information 😂

[@sgbuses]

The per square meter cost doesn't look like selling at a premium in business class. It's more of the segmentation.

[@danguee1]

7:08 they earn 35% of the money - but take up about 40% of the overall space; and 7:12 the premium seats earn 64% of the revenue - but take up about 64% of the overall space. The differential is not exactly mind-blowing!!

[@EcomCarl]

It's fascinating to see how airlines strategically generate revenue from different cabin classes. Understanding these pricing models can help travelers make informed decisions when booking flights. ✈

[@AG7-MTM]

I think I would only fly two classes: economy most flights (mostly carrying on), or business only if I were to fly overnight (because I need to sleep)

[@skyscraperfan]

I can't sleep anyway in a room full of strangers.

[@retttefspom7486]

4:29 Ah, yes. A metal made from fork 😂

[@TLDRbusiness]

Ohhh, I said knife and fork - but I can fully see how you misheard it... I did say it a little odd

[@Cannon952]

Not sure how you hear the word "made" from that lol.

[@Randohandle55748]

@@TLDRbusiness ​ Please make the first class video for as you said "HOW ARE INSANELY RICH PEOPLE GONNA GET PLACES?"

[@2point7182818284590]

7:08 OK, the business class seats earn 35% of the money on board. But look at the picture shown at 7:08! They occupy way more than 35% of the space!

[@aleshandsome3705]

Everytime Jack says AA, I wonder if a plane is in danger of getting shot down 😅😅😅😅😅

[@Isambardify]

I think first class is beneficial for the airline even with worse margins, because having a very expensive first class option makes business for slightly less very expensive seem more reasonable.

[@Ujemaima]

Days before I fly business class for the 1st time! Yous are prophetic 😮

[@madeintexas3d442]

As someone who travels frequently for work, probably 4-6 times per year I have never ridden in business class. My company is more than capable of paying for it but their system will only let you book economy. If you choose you can pay $75 for a larger seat that gives a few extra inches of legroom. I could definitely use the extra legroom but for $75 for a seat you can't visually tell is different doesn't seem to make sense. For a 2.5 hour flight I can deal with it.

[@sangokwho]

£800 for flights without even a checked luggage is an absolute joke

[@benknightguitar]

As this video confirms, the people paying thousands extra to sit in a slightly nicer chair for a few hours are subsidizing the cheaper prices of economy which honestly is not that bad, especially considering it's not uncommon to have an empty seat next to you. What's more, if you exercise and do yoga, sitting upright is really not that bad. We're living in an era where there seems to be no limit to how much people spend on frivolous luxury.

[@PoorBox]

Airlines really need to start watching KZbin and fixing their stuff based on what you all document

[@joshuachapman247]

Bag fee, insurance, admin fee, food, drink, I am sure we are paying the breath some where...

[@skyscraperfan]

The US should learn from Europe. In the EU all hidden fees hat are not avoidable have to be disclosed even before booking. For example we do not have "resort fees" in the EU. However the US are in the process of making most of those fees illegal.

[@baumulrich]

what they should do is never upgrade anyone for free, but rather double check price sensitivity of everyone already booked, and try to upsell them again, maybe for a lower amount. that would maximise revenues, and could easily be automateable

[@skeletonkeysproductionskp]

Thank God for stupid rich people; they give the rest of us heavily subsidized flights for a bit of extra leg room and the same food you could buy at the airport beforehand (for waaaaay less money!!!!)

[@cristianbrent]

Definitely do the airline points program video. Sounds fascinating

[@Conservator.]

7:05 these Seats urn 35% of the money on board BUT they take MORE than 35% of the cabin.

[@benasleo]

Yes, please do the video on the layoalyt programs, that would be super interesting!

[@adilkhan5029]

Would be interesting to see how smaller UK/EU airlines (Ryanair/easyjet) make their money compared to these long haul flights.

[@ilonajoy4119]

I flew with delta on business class for a business trip and they don’t have different food. You just get it much quicker.

[@heinkle1]

The funny thing is, all passenger classes arrive at the destination at the same time

[@makisekurisu4674]

So what, style matters, luxury matters and most importantly time matter. You could do a lot of other work that you'd otherwise not be able to do if you weren't in business class. And even if you arrive at the same time, the entry and exit is not.

[@remyphilly5168]

I need leg room bro

[@mabamabam]

WRONG The people who paid more for checked luggage arrive 20min or so later.

[@skyscraperfan]

@@makisekurisu4674 If my company would expect me to work during a ten hour flight, that would actually be a big downside.

[@PegasusFleets]

Price/sq ft/unit of time vs. Quality .. 🎉🎉🎉🎉🎉🎉🎉🎉🎉🎉🎉

[@C_Bat]

no wonder why I got some heavy sense of deja vu, it ain't deja vu, it's just my brain working properly for once

[@airplane800]

The slow search is done on purpose to create a feeling that the search was well done. Just behavioral economics tricks.

[@olfrygt]

I don't get that boarding group thing. If I'm in coach and I have an assigned seat, I definetly do want to be as little time in that cramped space as possible.

[@kdharley07]

Yes please do a breakdown on the loyalty cards

[@Alfextreme007]

Fascinating video. Informative, helpful, eye opening. Please can you make a video about airline loyalty programmes. Airline loyalty programmes such as 'British Airways Executive Club' ('One World Alliance'), 'Lufthansa Miles and More' ('Star Alliance'), 'Virgin Atlantic Flying Club' ('SkyTeam Alliance'). Please can you also make a video about why First Class is losing popularity with many airlines. Thank you.

[@wile123456]

Daily reminder that bags were included for free on tickets, until 9/11 where airline companies frontloaded the extra security cost onto the customer instead of covering it the,selves. Since then we have been scammed for baggage ever since.

[@Abyus]

This video seems very similar to Wendover Productions video, great one I recomend

[@brandonmoore1193]

I never understood why you want to board first. Maybe because I'm claustrophobic and don't enjoy being in a plane but I'm always the last one on the plane usually no matter what order I can get on the plane.

[@skyscraperfan]

Just because you might want to out your bag in the overhead bin above your own seat instead of somewhere else. That problem is not that bad in business class though.

[@mashavandenbeer1960]

It would be better to compare the seat price per square foot of cabin surface. The differential between First and Economy would be much less than 5 to 1.

[@mralistair737]

it is 64% of the revenue... it is also more than 64% of the plane. It would be really good to know how many people in buisness are on 'loyalty upgrades' not paid for with cash. My guess is that flights like these, the business class is there for companies whose policies allow it and as a loyalty incentive for people who spend their life flying from dallas to chicago and back in coach for work.

[@mareviq]

The video would benefit from an estimate of how much would the airline make if all the seats would have been just economy, just premium, just business or just first class and comparing that to the potential revenue from the actual seating arrangement (with the obvious note that it would mean a far lower occupancy rate, making those calculation purely theoretical). But I guess it would be a bit of a guesswork trying to figure out how many rows of each of those seats would fit in the plane.

[@skyscraperfan]

You can't get more passengers out of thin air. If you replace one business class seat with several economy class seats, you would need to find more passengers.

[@Da__goat]

Premium cabins have higher $/sq meter than regular economy seats First class suites are actually inefficient due to the amount of space they take-up Conclusion, more premium economy and business class seats on aircraft and fewer first class and economy class seats. Wendover covered this in a video a long time ago but the rules of all business and revenue still apply, examples such as the 80/20 rule, where 80% of all revenues come from the top 20% of customers or clients. Price's Law, which states that the square of the number of people in a given domain are responsible for 50% of the productivity, and the list goes on.

[@TrogdorBurnin8or]

It's no secret. If you turn the thumbscrews on break-even coach passengers tight enough, if you squeeze them into smaller and smaller spaces, some of them will upgrade, paying twice the revenue while remaining almost the same weight. In a world of increasing inequality where they have no effective regulation from the FAA or European consumer regulations, it's just what makes business sense. Imagine a staff member stationed between the "business" and "coach" class lounges whose job it is to kick you in the shins as you pass; They perform the same function of market segmentation. What's tragic is that this requirement exists in almost total separation from many components of comfort. Weight is mostly what costs extra fuel, empty space like legroom and aisle room is cheap.

[@exanime]

how is getting in the hot, muggy (or freezing cold) plane sooner a "benefit"?

[@moravianlion3108]

Keep working the job you hate so you can enjoy your Premium seat on a flight you don't want to be on. Society jokes aside, I'm fine with economy class once a year. But ffs, make those flights on time and don't make my travels take 2x as much time because of this! I'm dreadful of every journey just because of the flight travel alone. It used to be ok pre SARS-COV 2. Plus these websites, these damn F websites!

[@TheLokiel]

Depends on the flight. I’m tall and overweight and I often fly on 12+ hours flight. No way in hell I’m doing that in economy.

[@antontsau]

when people pay not their own but company/govt money and receive personal kickbacks (miles, lounges etc) - its a golden bottom!

[@MarcPagan]

Incorrect! Airlines make money at 101% of seating capacity, ..but they make it up in volume :) From a former airline sales manager, .... who worked closely with the actuaries in Inventory Management.

[@dade4537]

Showing Airbus interior as you're talking about a 777. Internet!

[@kriskalpa]

I fly a lot. I decided a while ago to just endure the flight in coach and use the money saved to buy stocks. It's only a few hours. Paying 4-5 times as much to sit on the same plane is insane.

[@skyscraperfan]

That's what I always pay people who fly business class although they are not rich. Flying economy class instead basically means that you get $100 per hour for sitting in an uncomfortable chair. That looks like a good deal for at least 99% of all people.

[@maxsaviation9512]

It’s worth extra money to me to get more comfort and a meal if priced reasonably, definitely not a waste of money to most people.

[@skyscraperfan]

@@maxsaviation9512 Flying business class for the better meal makes that meal really expensive. If more food is served, that can even be a downside. Imagine you cross the Atlantic in business class every week and eat all the food they offer. That might make you quite fat after a while. Business class passengers do nit have a larger stomach than economy class passenger. I never felt hungry in economy. Quite the opposite: I hardly eat anything before a flight, because I know that I need space for those two meals plus snacks.

[@kriskalpa]

@@skyscraperfan exactly!

[@kriskalpa]

@@maxsaviation9512 fair enough

[@razorworks111]

Nice review. Always liked these, might need to get one someday

[@Sirclassic]

Wendover Productions made a video like this a few years ago where he goes deeper in the topic

[@ewanjones9743]

Interesting for sure but doesn’t take into account the additional climate impact if upgrading. If you wanted to actually remove the CO₂ for your flight and business uses 3x the space as economy, you will also need to pay 3x more again for the climate impact. A return flight for this route is approx. 3tonnes of CO2e for economy and carbon removal is around $350/tonne. That results in an additional $1050 for economy and $3150 for business to undo the climate emissions of the flight.

[@fawazmuhammad7847]

We need a video about how loyalty programs work

[@263Leo]

Please do a video on airline first class economics