This is probably very boring stuff for people who are not in the know. Or taking transport modules like me. So skip this post if you don't want to get your brain working or dozing. I just need an outlet to vent my frustrations at boggling questions like these, hence this entry.
Do you think you can solve this?
This is a complex 2-way flight situation. If you are based in Singapore and you buy a return ticket to Los Angeles from SIA, the fare will be different from an American person buying an SIA ticket from Los Angeles to Singapore (return). Both you and the American traveler are actually competing for the same seats on the SIA flight. With this market feature in mind, take a look at the following scenario and answer the questions below:
Assume SIA has daily flight on the Singapore – Tokyo – Los Angeles route using a Boeing 747 aircraft with 375 seats.
The fares (yields) on the flight, which are applicable over a six-month period, are as follows:
Singapore -> Tokyo (return): $1,200
Singapore -> Los Angeles (return): $2,000
Tokyo -> Los Angeles (return): $1,100
Tokyo -> Singapore (return): $1,000
Los Angeles -> Singapore (return): $2,100
Los Angeles -> Tokyo (return): $1,300
(a) If you are the market planning manager for SIA, how would you try to allocate the seats on this return flight, assuming you can easily fill up the seats in all sectors?
This is not an impossible to do question but I am confused.
Is the correct answer aiming for revenue maximization? Or are there hidden codes and rules in deriving seat allocation?
Does the Fifth Freedom of International Air Transport apply to a purely Tokyo -> LAX flight without originating from Singapore (Third Freedom)? So as to say, passengers can hop onto an SIA flight from Tokyo to LAX and return from LAX to Tokyo without flying to Singapore.
"Fifth Freedom: The right to take on passengers, mail and freight destined at one foreign state to another foreign state, provided the flight originates from home state of carrier" ----> NRT-LAX (return) is okay.
How about the 'hidden' codes? Such as, aircrafts should give seat capacity mostly on SIN-LAX(return) flights or LAX-SIN(return) flights based on the respective Third and Fourth Freedoms of the Air. As Fifth Freedom is a "derived" freedom given as a 'privilege' with the two freedoms, not on its own.
If i choose the profit maximisation route, i will definitely allocate all seats if i can, on SIN-NRT (return) and LAX-NRT(return) segments. If i want to take in account of the 'hidden' codes so called, i have to accord a majority of seats for SIN-LAX or LAX-SIN(return) flights.
But how much is the majority?!
**Shall post the suggested answer after my group have presented this in class. For me, as this is my question, i will just draw a table with projected figures and seats in each possible scenario.
xoxo, principessa the NERD
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