Why can’t First Class be sold at less outrageous prices?
They're bundled with other amenities. The extra space and better seating allows passengers to arrive in a condition where they are able to work after getting off a long flight. Being at the front of planes first and business class passengers are the first to exit the aircraft which can be important for making tight connections between flights. The luggage for premium passengers may also be put on the baggage claim ahead of other passengers baggage allowing them to take less time to leave the airport after a flight. The tickets are much more flexible. A discounted economy ticket usually can't be changed without paying an addtional fee. They're also not refundable. Large companies often negotiate discounts on business and first class fares that aren't available to individual consumers. They do have the flexibility to change flights and get refunds without incurring penalties. Airlines are just exploiting differences in elasticity of demand to extract as much revenue as possible from customers.
I think you're correct about the pricing of first class tickets. If they were priced higher, it would be cheaper and more flexible to charter business jets. The availability of multiple flights per day between destinations discourages companies from chartering business jets on heavily travelled routes. Multiple flights per day between a pare of cities cause airlines to decrease the size of the planes they buy. Rather than one 747 per day on a route, an airline might prefer to fly two or more 767's.
What do you think of the new generation of business jets that sell for about $1.5 million and are designed for air taxi services? Shouldn’t that have a significant impact on first class domestic flights? I would think that with horrible delays, humiliating security and other problems with flying today, business executives would be scrambling for a jet at that price point.
(I know those planes are probably not well suited for long haul international flights).
I noticed an interesting oddity with pricing. EVA Air was offering Evergreen Deluxe service from LAX to MNL for about $800 with restrictions, $1,200 unrestricted. The restriction was that I would have to pay $100 to change my ticket. Why would someone buy an unrestricted ticket for $1,200 if for $900 they would have effectively the same thing?
D