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Prez Steve opened the meeting on time (he is finally getting it) announcing it was the 80th Anniversary of the D-Day invasion. He then had Terry M. White recite the 4-Way Test (done beautifully and with flair) and asked Janet Schwartz for her “Thought of the Day” about D-Day. Janet explained it was the largest multi-nation assault on another country with over 150,000 soldiers participating. Originally it was scheduled for June 5th but was delayed a day due to bad weather. The German’s knew the allies were coming and prepared for them at Calais. The invasion occurred at Dunkirk and the Germans were completely caught off guard. One year later the European war ended. President Steve thanked all who served in the armed forces.
Next up with Maestro and PP Ed Gauld who told the audience that his grandson is a 3 Star Admiral and recently was promoted to oversee the 3rd Fleet!! In honor of all graduating university seniors (especially UCLA), he then led the Club in singing “The Happy Wanderer.”
It has been a busy few weeks for the WVRC starting with food packing & distribution at the Collins-Katz YMCA; Pres. Steve and Janet Schwartz presenting a sword and check to the Air Force ROTC Top Cadet at their awards ceremony and, Pres. Steve presenting a check to the LAPD K9 Fundraiser towards the purchase and training of a K9 of which he was able to witness while in a protected cage! Those dogs are amazing.
Janet Schwartz was awarded the do gooder pin for all of the service above self she has done this year. Congratulations Janet!!!
President Steve then introduced the speaker for the day, Domenico Fabrizi, a doctorate candidate in Economics at UCLA who told us he would be receiving his degree next week. He will be practicing shortly thereafter as an associate professor at a college in Lisbon, Portugal. His doctoral thesis was on the airline industry. Today his talk will be only on the portion of the thesis related to how airlines sell tickets and upgrades.
The gross profit margin of the airline industry is 1.2%. Airlines contribute 5% to the overall U.S. GDP. Running the airlines is considered by many to be one of the most difficult jobs in the world. Airlines are critical to transportation, commerce, and the job markets. Airlines touch all our lives.
Domenico spent 6 years studying upgrades, pricing and how the airlines continue to search for ways to increase their gross margins.
Revenues:
Upgrades account for a large share of premium cabin revenues.
Many upgrade sales occur in the last two days before departure.
Customers accessing premium cabins with an upgrade enjoy a discount from those who purchased premium tickets outright.
Over 15% of travelers in premium cabins purchased upgrades after buying a lower priced ticket.
6% of premium cabin revenues come from upgrade fees.
The average traveler saves 15% to 20% off the retail price by purchasing an upgrade.
Upgrades are beneficial to the airlines as they increase their revenues by 2%.
Upgrades are also beneficial to travelers in the savings received. The discount the airlines offer for last-minute upgrades is larger than the loss of a full price ticket due to different pricing strategies.
In conclusion you can benefit from upgrades, some of us more than others. We learned behind the curtain the airline industry is working and trying different strategies to entice customers to upgrade their economy tickets to premium and business class. If it is affordable, why wouldn’t you upgrade? Larger seats, more leg room, and sometimes even free cocktails and you get off the plane sooner. It is a no brainer.
President Steve ended the meeting by providing a quote from General Dwight D. Eisenhower to the armed forces who took part in D-Day. Very moving end to the meeting.
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