AA October Revenue Impacted by Bookaway

[WorldTraveler]

It appears the operational problems at AA in Sept. did result in bookaway of higher value customers.

AA has noted that their RASM was down in October as a result of the operational impact earlier in the fall.

"October's consolidated passenger revenue per available seat mile (PRASM) increased an estimated 0.4 percent versus the same period last year. Absent the recent operational disruption that affected bookings for October travel, PRASM would have been approximately 3.1 percent higher than in October 2011."

http://finance.yahoo...-220000109.html

AA's RASM growth of 1/2 of one percent compared with
UA at 0.5 to 1.5%
US at 3%
WN at 5%
DL at 5.5%

AA's capacity was down 3.4%, not as much of a reduction as UA's 4.4% but more cuts than DL and WN, at 1.6 and 1.8%, resp., and US which was slightly up.

AA cargo volume dropped 7.6% for October although UA was down over 10%.

UA and DL have changed the format they use to report fuel costs; previously they reported for the month but are now each posting their estimated quarterly fuel cost which for DL was $3.15 - 3.20 and $3.30 for UA. UA's MONTHLY Oct fuel price was $3.42.
AA's MONTHLY fuel price was $3.31.

 

[eolesen]

No kidding. And AA came out with a double EQM/EQP promotion earlier this week.

As I said a few times, AA lost a fair amount of business from me, including a round trip to Europe, and two upcoming trips to Brasil.

Two of the trips were booked prior to the promo, but the upside is I'll have somewhat better status on UA as a result of shifting my plans and the third trip in December.

 

[silverbird007]

Im sure AA will survive! If it doesnt it wont be because of you. That also goes for the good ole USA! We just dodged a bullet (Romney) so cheer up! Cheers!!

 

[jimntx]

Eolesen flying on someone beside us? I'm mad. I'm going out in the yard and eat a bug. Then he'll be sorry.

 

[jersey777]

I hate to say it but multiply him by the thousands that we have alienated and that is a lot of revenue. With that said, most are frequent flyer wh*res and their long term concerns are miles and upgrades and not loyalty.

 

[777 / 767 / 757 Love]

I hate to say it but multiply him by the thousands that we have alienated and that is a lot of revenue. With that said, most are frequent flyer wh*res and their long term concerns are miles and upgrades and not loyalty.

Correction, you have it COMPLETELY backwards. Its the FFs that are loyal and pay for seats not based on price, but service offerings, dependability and perks. Its the vacationers and 1-2/ year traveler who shops based purely on price, then by availability of preferred times with ABSOLUTELY no loyalty.

I think its ironic that the APA member will complain about all the things management has done to hurt the airline and its employees (and yes it has done plenty), but then go ahead with actions that hurt the airline and its other employees while claiming to be innocent victims. Can't make it up.......just can't make this s**t up.


Cheers,
777 / 767 / 757

 

[jersey777]

Loyal to miles and perks....not to airlines. Please!

 

[WorldTraveler]

I hate to say it but multiply him by the thousands that we have alienated and that is a lot of revenue. With that said, most are frequent flyer wh*res and their long term concerns are miles and upgrades and not loyalty.

No, they are loyal to companies that provide them the best value for their dollar... and it is precisely because they travel so much that they need a reliable airline that they can count on to provide at least average service day in and day out compared to their peers.

The irony of this month's RASM data is that AA really did have solid momentum in its revenue generation going into the fall, in large part because AA had picked up so many passengers from UA due to UA's merger-related problems.
Now, AA's revenue generating ability is right back in the same ballpark as UA; AA is now having to offer incentives to get its original passengers back, let alone retain the passengers it gained from UA. Some of those same passengers who came to AA from UA are going back to UA now that UA"s operation is improving and for now isn't markedly better or worse than AA's, or vice versa.

Correction, you have it COMPLETELY backwards. Its the FFs that are loyal and pay for seats not based on price, but service offerings, dependability and perks. Its the vacationers and 1-2/ year traveler who shops based purely on price, then by availability of preferred times with ABSOLUTELY no loyalty.

don't underestimate the importance of corporate contracts in influencing travel decisions.... many companies allow little leeway in the buying decisions of employees who want to deviate from negotiated discounts.

You are right that there are far too few airline employees who understand how valuable the vast majority of business travelers are to an airline... there are certainly those that figure out how to use leisure type fares but most business travelers generate not only far higher volumes of travel than any leisue traveler but usually spend far more money per ticket than leisure travelers.
It is precisely because of those higher fare levels that the network carriers have realized prevent them from ever walking away from their current complex business model for the comparatively more simple model that many low fare carriers use.

 

[Ifly2]

Perhaps, there are too few airline managers who understand the Value Of Respect towards labor, or the value to the enterprise of employees who are fairly treated and compensated, or the damaging effects to the enterprise of overreaching and punitive use of the bk laws.

 

[WorldTraveler]

absolutely.... and that is precisely why I continue to say that the traditional legacy carrier labor-mgmt model is broken and results in reduced revenues for the company, greater pain to the employees, and increased opportunities for airlines who don't choose to follow that model.

 

[Kev3188]

Your alma mater could take a lesson...

 

[eolesen]

don't underestimate the importance of corporate contracts in influencing travel decisions.... many companies allow little leeway in the buying decisions of employees who want to deviate from negotiated discounts.

Granted, there are some corporations who are big enough to negotiate directly with the airlines, but I'd say the lion's share of negotiating for corporate discounts is done by the large agencies (e.g. Amex, BCD, Carlson) on behalf of the airline. That's the model we use -- Amex negotiates most of the agreements, aside from a couple reciprocal deals we have with airlines who also do business with us .

When I go shop for airfare, I consistently have a choice of three or four carriers thru our booking tool, regardless if it is domestic or international. The only time I've seen deliberate attempts to steer traffic to a specific airlines is when the agency isn't meeting their commitment to that particular airline, and they want to keep those discounts in the future.

 

[xUT]

Granted, there are some corporations who are big enough to negotiate directly with the airlines, but I'd say the lion's share of negotiating for corporate discounts is done by the large agencies (e.g. Amex, BCD, Carlson) on behalf of the airline. That's the model we use -- Amex negotiates most of the agreements, aside from a couple reciprocal deals we have with airlines who also do business with us .

When I go shop for airfare, I consistently have a choice of three or four carriers thru our booking tool, regardless if it is domestic or international. The only time I've seen deliberate attempts to steer traffic to a specific airlines is when the agency isn't meeting their commitment to that particular airline, and they want to keep those discounts in the future.

That sounds pretty unethical, from my small minded 'tell the truth' kind of ethic.
I am sure it is legal though == which makes it ethical.
B) xUT

 

[eolesen]

How is it unethical?

When Home Depot puts something on sale, it's usually to move slow-selling inventory.

Steering traffic towards one airline or the other is the same thing -- moving inventory they've already agreed to sell.

At the end of the day, the company contracting with the agency is simply looking to ensure that their travel expenses are under control. Travel managers aren't going to get wrapped up in the minutae of how many employees flew on AA vs. UA, unless of course you're involved in a lawsuit with one of those airlines, and are deliberately boycotting them...

Case and point: Sabre employees have been prohibited from booking AA for the past two years. That's an interesting problem when you're based in Southlake...

 

[xUT]

How is it unethical?

When Home Depot puts something on sale, it's usually to move slow-selling inventory.

Steering traffic towards one airline or the other is the same thing -- moving inventory they've already agreed to sell.

At the end of the day, the company contracting with the agency is simply looking to ensure that their travel expenses are under control. Travel managers aren't going to get wrapped up in the minutae of how many employees flew on AA vs. UA, unless of course you're involved in a lawsuit with one of those airlines, and are deliberately boycotting them...

Case and point: Sabre employees have been prohibited from booking AA for the past two years. That's an interesting problem when you're based in Southlake...

It's always the 'devil in the details'. I have had (and still do) get a plethora of financiers, marketers, etc... that promise me the moon if I use their service. When I ask for their contract, well things are not as rosy as they proclaim and in most cases their 'free' service, or 'payed service' is not defined the same as what is stipulated in the 'signed' contract. In one case I would be locked in for 3 years with fees for a 'free service'.
When I get a 10 page contract with weasel words or clauses, I tell them to pack sand.
Doesn't seem to ethical to me.
If you 'up sell' a product that is knowingly of lessor value and misrepresent that it is of equal or better value, then that is unethical. Maybe legal but something I wouldn't do.
"caveat emptor" is the name of the game, and cover your ass is the only solution.
JMHO,
B) xUT