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On 1/23/2003 12:54:06 PM whatkindoffreshhell wrote:
"Southwest...even with its low-fare pricing system, passengers on WN actually paid more, per mile, to fly than did AA passengers. WN's average fare per mile was 12.25 cents, 4.5% higher than AA's 11.72 cents. Yet WN's unit costs were 30% lower than AA at 7.47 CASM compared with 10.73 CASM."
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This info was published today. I don't expect the flamethrowers to have a reasonable answer, other than to blame it on management.
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In a sense, it is managements fault. Southwest saw that demand was down and responded by trying to do something to increase demand - the $299 maximum one way fare. fully refundable, No strings attached. They still offered advance purchase fares - with very few strings attached (no Saturday stay, tickets non refundable, but no penalty to make changes, no use it or lose it, if ticket was unused, full credit would be applied towards another ticket within a year). As a result, their average fare went up...which tells me that quite a few folks took them up on the $299 offer. I know I did - my wife wanted to go to San Diego to see the Holiday bowl. Flights out were full fare, return did have a discount. Bottom line, $299 one way wasn't too outrageous for me to send her. Worst case...if she would have cancelled, her MCI-SAN fare would have been refunded, and the discounted fare would have still been available for us to use for one year.
All the other airlines were so focused on cutting costs that they missed the opportunity to try to increase revenues, and instead made many demands to labor to cut costs while offering super-de-duper advance purchase fare sales, you know, the kind that cost the airline more than they make.