Easyjet yield management

[atakacs]

Just wondering how Easyjet is doing yield management / price calculation.

I often find that their price are actually significantly different (both above and below as a matter of fact) from their direct competition on similar legs (say GVA BCN, where Swiss is also offering direct flight within 1.5h of EZY). Why would you, at a given time, propose the exact same product at a 30% discount or premium (I have seen it) ?

Today I have missed my GVA-SXF morning flight and went to the customer service desk to re-book using their “rescue” option (ie a fixed penalty to be re-booked on the next flight, only available – I believe – if you show up at the airport with 2h of departure). Much to my amazement the friendly agent pointed out that it would be cheaper for me to purchase a new ticket outright, which I did. Again what’s the point of this pricing structure ? The evening (next) flight was more than 95% full, there is no direct competition (no one else is flying direct to Berlin from Geneva, and all other one stop one way offers where considerably more expensive) so why sell me something so cheap ?! Not complaining (although I am a very minor shareholder), just trying to understand the system…

Any comments most welcome !

[EK77WNCL]

I can't understand why they seem to muck up schedules so bad, for example take a look at Newcastle to Bristol... Yeah we all want 2 daily flights at 19:10 and 20:40 don't we...

[Shed-on-a-Pole]

I can't understand why they seem to muck up schedules so bad, for example take a look at Newcastle to Bristol... Yeah we all want 2 daily flights at 19:10 and 20:40 don't we..

You need to think about this from the point of view of an airline manager. Presumably you would prefer to see one morning rotation and one evening rotation neatly wrapped around the business day. From a passenger perspective this makes total sense. But look a little deeper. The airline has a very limited number of aircraft available at the base in question. These are particularly high value assets. They must deploy each aircraft on whichever route will yield the highest profit for the company. If Newcastle is not that route and XYZ is, the airline is correct to prioritise the service to XYZ. Shareholders expect no less. Optimisation of ROI is paramount. Given unlimited fleet resources, the company could run all its routes in the manner you desire, but that is not the reality. You should instead applaud the airline for committing two flights per day to the NCL-BRS route, however sub-optimal you consider the schedule to be. They could undoubtedly command much higher yields by running just the one.

Just how large is the demand for day return trips between NCL and BRS anyway? Surely the vast majority of travellers would opt for a longer stay?

[SWBKCB]

These are particularly high value assets. They must deploy each aircraft on whichever route will yield the highest profit for the company. If Newcastle is not that route and XYZ is, the airline is correct to prioritise the service to XYZ. Shareholders expect no less. Optimisation of ROI is paramount.

You should instead applaud the airline for committing two flights per day to the NCL-BRS route, however sub-optimal you consider the schedule to be. They could undoubtedly command much higher yields by running just the one.

Bit of a flaw in the logic, Shed?

[Hotel Tango]

I can't understand why they seem to muck up schedules so bad, for example take a look at Newcastle to Bristol... Yeah we all want 2 daily flights at 19:10 and 20:40 don't we

Not a totally factual example. Depends on the day. You can for instance make a morning departure on Monday, when they offer 3 flights on that day. There's only 1 flight Tue and Wed; 2 on Thu; 3 on Friday; none on Saturday and 3 on Sunday. Granted there are no morning flights with the exception of the Monday, but on those days with two or three flights there is a lunch time departure. Nowhere did I see both a 1910 and 2040 departure on the same day. So I would conclude that the schedule offered is one that maximizes their yield, although it may not suit you personally.

[Shed-on-a-Pole]

Bit of a flaw in the logic, Shed?

Not at all. EasyJet have run the numbers, we have not. They're giving a second flight a go. If you suspect that EZY have made the wrong call, e.mail Ms McCall and suggest she drop one of these evening NCL-BRS rotations. No? Thought not!

[Union Jack]

If you suspect that EZY have made the wrong call, e.mail Ms McCall and suggest she drop one of these evening NCL-BRS rotations. - Shed

https://www.youtube.com/watch?v=jy-fVA83gu8

[SWBKCB]

On the contrary, I think EZY are doing pretty well without my advice, but didn't you say in the first quote they should be pursuing max profit and in the second they should be thanked for providing two flights when they could make more one with just one?

[Shed-on-a-Pole]

I do profoundly apologise for not suggesting that EZY would be wise to run 40 return flights daily between BRS and NCL in accordance with your personal agenda. Reality is so inconvenient sometimes, isn't it?

[HeartyMeatballs]

Unfortunately APD has seriously effected shirt haul U2 flights which compete with roads and rail. For example, NCL-STN was four daily. That route went about 5 years ago. Now there is an E135 which barely half fills on the once a day flight. BRS is also down to flights where they can attract a good yield and turn a profit.

On a domestic flight (particularly intra England) £16 APD is a significant portion of the ticket. You're limited as to how much you can charge as driving is probably cheaper and door to door there's not much in it time wise. The trains are pretty much hourly too.

The same cannot be said for NCL BFS where there is no practical alternative. Your yields will be better as people are prepared to pay more.

I'm sure they're doing the best they can. I know some of the BRS flights are done by BRS jets assuming they are keeping NCL based jets to operate higher yield routes..

[MerchantVenturer]

Just how large is the demand for day return trips between NCL and BRS anyway? Surely the vast majority of travellers would opt for a longer stay?

More than you might imagine. I used to use the route quite often for day trips (BRS-NCL-BRS) and found a significant number of others doing the same. I believe the route is still the busiest one between two English provincial cities with 174,000 using it in 2014. This is down from the 250,000 pa of ten years ago when easyJet operated 4 x daily on some weekdays which did seem a bit like overkill at the time.

However, the airline then settled down for a number of years at mainly 3 x daily on weekdays (fewer as always at weekends) giving excellent opportunities for day trips before, a couple of years ago, reducing to basically what we have now which is:

Mon 2 x daily
Tue and Wed daily
Thurs 2 x daily (late afternoon and evening)
Fri 3 x daily (all after midday)
Sat no flights
Sun 3 x daily (all after midday)

Now I'm the first to admit that the airline knows infinitely more about its business than I do but as a mere customer one can't help wonder why they would reduce their service to a point where only Monday provides any sort of opportunity for a day trip (even then very much curtailed especially in Newcastle) and yet, for example, launch Bristol-Isle of Man year-round at 4 x weekly which frankly amazed me as well as some other BRS watchers as we believed that this was a huge overkill on a route that no airline had ever experienced anything approaching a high turnover of traffic. I can't believe the airline made much on this route and now have taken the unsurprising step to reduce BRS-IOM to 2 x weekly for the coming summer.

Looking at the seat selector for the route between Bristol and Newcastle both today's northbounds are shown as sold out as is the first northbound on Sunday, with the first southbound on Sunday and both southbounds on Monday also shown as sold out. Prices for many of the flights in both directions over the next few days are high which I suppose confirms that easyJet's yield management is working even if the actual flight times are of not much use to some of us.

Although there is an hourly rail service between Bristol and Newcastle the journey in each direction takes around five hours which again isn't much help if one wants to travel there and back in a day.

I take the points about APD and aircraft utilisation on routes that turn a greater profit but some decisions, such as Isle of Man, still cause me to wonder.

I find that contacting an airline about specific routes rarely, probably for understandable reasons, elicits anything more than a generalised reply.

[atakacs]

Thanks for the contributions...

Any chance to steer back the discussion to the initial topic ?

[Hotel Tango]

Any change to steer back the discussion to the initial topic?

No chance. This IS PPRuNe after all!