- Nov 9, 2003
- 16,512
- 5,865
Aviation Daily
Independence O&D Markets Threaten US Airways
By Lori Ranson
December 18, 2003
If Atlantic Coast Airlines (ACA) proves successful in fending off a hostile takeover from Mesa to launch Independence Air, US Airways not only faces low-fare competition in Philadelphia but also on 1,200 of Independence's connecting markets from Dulles airport.
ACA Senior VP of Marketing Eric Nordling told The DAILY at the carrier's Dulles headquarters yesterday that Independence would compete with US Airways in about 93% of those connecting markets, and with Southwest in about 25%.
"On these" 1,200 origin-and-destination markets "we're not competing with Southwest. We're competing with the highest-cost carrier in the industry," Nordling said.
Both US Airways and United serve Charleston, S.C., and Nordling said it would be tough for the majors to lower their last-minute $400 fares to Independence's $160. He said a look at DOT data indicates major carriers don't bring their fares down to low-fare levels in direct competition. "The low-fare airline still tends to have the lower average fare," Nordling said.
Nordling also acknowledged that while costs per seat on RJs are higher, frequencies and trip lengths from Dulles will help offset some of those costs.
"You're only talking about a difference between $20-$30," he said, "so you say to yourself is your time worth driving two-to-three hours to Baltimore to try and find one out of four or five flights or have eight-to-twelve flights from Dulles."
Nordling said ACA asked that question in consumer focus groups and the lowest value people said they'd be willing to pay is $25, with the highest being $100 or more. "At this point now in the business, fares have dropped so low that you're not going to try and save that last $5 and not do what I want to do from my own backyard," he explained.
JetBlue has had some success with that formula in some Florida markets, Nordling noted. He said there are about 18 JFK-Fort Lauderdale flights to choose from, and with added JetBlue amenities like inflight television, passengers aren't worried about the $10 to $20 they might save on Delta's Song.
Independence plans to offer its own inflight television product and plans to announce the vendor in January. The carrier also wants to offer buy-on-board meals and about 33-inch seat pitch in the Airbus planes. US Airways offers from 31- to 33-inch pitch on its Airbus A320 family aircraft.
Independence O&D Markets Threaten US Airways
By Lori Ranson
December 18, 2003
If Atlantic Coast Airlines (ACA) proves successful in fending off a hostile takeover from Mesa to launch Independence Air, US Airways not only faces low-fare competition in Philadelphia but also on 1,200 of Independence's connecting markets from Dulles airport.
ACA Senior VP of Marketing Eric Nordling told The DAILY at the carrier's Dulles headquarters yesterday that Independence would compete with US Airways in about 93% of those connecting markets, and with Southwest in about 25%.
"On these" 1,200 origin-and-destination markets "we're not competing with Southwest. We're competing with the highest-cost carrier in the industry," Nordling said.
Both US Airways and United serve Charleston, S.C., and Nordling said it would be tough for the majors to lower their last-minute $400 fares to Independence's $160. He said a look at DOT data indicates major carriers don't bring their fares down to low-fare levels in direct competition. "The low-fare airline still tends to have the lower average fare," Nordling said.
Nordling also acknowledged that while costs per seat on RJs are higher, frequencies and trip lengths from Dulles will help offset some of those costs.
"You're only talking about a difference between $20-$30," he said, "so you say to yourself is your time worth driving two-to-three hours to Baltimore to try and find one out of four or five flights or have eight-to-twelve flights from Dulles."
Nordling said ACA asked that question in consumer focus groups and the lowest value people said they'd be willing to pay is $25, with the highest being $100 or more. "At this point now in the business, fares have dropped so low that you're not going to try and save that last $5 and not do what I want to do from my own backyard," he explained.
JetBlue has had some success with that formula in some Florida markets, Nordling noted. He said there are about 18 JFK-Fort Lauderdale flights to choose from, and with added JetBlue amenities like inflight television, passengers aren't worried about the $10 to $20 they might save on Delta's Song.
Independence plans to offer its own inflight television product and plans to announce the vendor in January. The carrier also wants to offer buy-on-board meals and about 33-inch seat pitch in the Airbus planes. US Airways offers from 31- to 33-inch pitch on its Airbus A320 family aircraft.
