Originally Posted by
1A_Please
The mechanics are very different as you point out. VA can sell 10 $39 seats that they would have previously sold as Velocity reward seats and actually be better off financially and still have an average seat price across the plane of, say, $175 and have successfully diverted 10 pax away from REX. REX are unable to sell 20 seats on a flight when they are only charging $69. Even if they double their seats sold to 40 @ $39, they are only clearing $9 per pax once airport and gov't charges are included so that is a whole $360 for themselves for the whole flight....hardly a recipe for success.
They aren’t clearing $9/pax because there’s still the other $10,000/hr expenses to cover. So a Mel-Syd has something like a $14,640 loss. So they are probably planning to lose a tonne of money on every flight and make it up with frequency. Oh wait...