“ Blake’s pitch to airlines is enticing: “You’re already flying this route with a 300-seat plane where 80+ people in business class generate most of your profit. Give those passengers a supersonic plane, cut the flight time in half, and charge the same price.”
The math doesn't scan out on that, it sounds good for pitches and articles but is kind of nonsense once you think about it imo. It's going to cost way more than just 2x to run the supersonic jet along the same route per flight just in fuel and maintenance and you're cutting out all the low fare passengers they cram in the back so they need to make up even more money than just the fuel costs and running additional flights per day doesn't address the issue because the cost per trip is increasing so running more trips just keeps incurring those same costs.
It won't change the economics of the current class of aircraft. They will still need to have business class seats to pay for the economy cabin.
You will probably end up with 5 or 6 tiers of service instead:
Supersonic: Business + First
Subsonic: Economy + Eco+ + Business + First
Supersonic First will be a Veblen good that has a high price floor (like $30k). Business for time sensitive business passengers, and it's actually an Economy Plus seat for ~$15k.
It's very hard to resist marketing some service differences, particularly when you have two classes of users with different needs (speed vs. prestige).
The pitch quoted from the post I was responding to essentially said it was going to siphon all the business class fliers from normal flights: "Give those passengers a supersonic plane, cut the flight time in half, and charge the same price." There's no way businesss travellers would choose subsonic travel if supersonice was the same price for half the time.
We agree I think that there wouldn't be a similar price between the sub and supersonic travel options. The economics of running the routes can't work out to a similar price to existing offerings.
Estimate 4k for one-way biz ticket and 500 for economy, then that's about 240k from the front and 145k from the back. Actually, I'd expect them to optimize based on space, so if 40% of the plane is biz, then 40% of revenue should come from biz. Perhaps the most profitable routes with this config are 60% revenue from biz; other routes might be more like 2.5k-3k one-way biz.
But biz will be half empty or more at full price, so it gets filled with upgrades of coach tickets to reward frequent fliers or full-fare users. The average has to be lower. The biz price may also be optimistic. United EWR-LHR is more like your $2.5k-$3k. Delta has an ATL-LHR option for first/business class with a bed that's more like $8k-$10k, and their Premium Select, which is more like United's business class, is $2.5k. Interestingly, they offer more beds than big seats.
I remember pricing out the Concorde years ago, before it was grounded. BA's first class subsonic was $8k, Concorde was $12k. (2001 dollars) If you're paying those rates anyway, it might be worth it to go faster, if you don't mind the relatively small seat and limited food service. Coach was $400-$600.
