Driving away customers

Tango-Bravo

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On 10/14/2002 2:00:31 PM apofurlough wrote:

Maybe we should just go back to the simpler way of life we enjoyed before deregulation? I am sure a lot of you remember - F first class Y coach class and B 7 day advance purchase Sat overnight no fees no restrictions. Sure sounds simpler to me and as I remember it was much simpler to deal with. But then charge reasonable prices for the 3 tiers. This makes life much easier for travelers and MUCH MUCH easier on employees. What do we need 50 fares in a market for anyway? A reasonable discount off a sensible business fare for the leisure traveler who can afford to stay over the Sat night. And the business man is happy with the sensible Y fare. Sounds like a win win to me. Only ones unhappy with it would be the people who sit in the back making up the rules and restrictions that complicate and upset both traveling public and employees alike. They would give up their job security. [img src='http://www.usaviation.com/idealbb/images/smilies/3.gif'] [img src='http://www.usaviation.com/idealbb/images/smilies/16.gif']
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Believe it or not, even in the 1950s-60s when regulation was in full force and one would have been considered mentally challenged to even suggest the possibility of airline deregulation, there were peak and off-peak fares, family-plan discounts, night coach, and other pricing incentives to improve load factors on flights operating during lightly traveled days and times.

Even so, the pricing structure remained very simple, straightforward, and above all, equitable (my preferred terminology for [i]fair to all concerned[/i]). It was comprised of no more than 3-4 price tiers in coach and the differential between highest and lowest fares came nowhere near the obscenity of what the Cartel airlines are foolish enough to think they can continue to impose on their customers -- in spite of overwhelming evidence to the contrary dating back to sometime between 2Q 2000 and 1Q 2001 (BTW, that was [i]before[/i] 9/11/01).

From the 1950s through the mid-1980s, the [i]lowest[/i] fare in coach was typically 40% less than the [i]highest[/i] coach fare. By 2000, when the pricing shenanigans of the Cartel began to collapse under their own weight and complexity (to say nothing of the system's in-your-face arrogance that was sure to stir a backlash) the [i]average[/i] business traveler on the full-service majors was paying 491% (ie 4.91 times) more than the [i]average[/i] leisure passengers on the same flights. And it was not an aberration for a business traveler to be paying as much as 1,000% more than the pax sitting next to him/her on the same flight.

The yield-management system used by Southwest is very similar to the 3-4 tier system used successfully by the majors before and after deregulation. Above all, with Southwest's pricing model, it is well nigh unheard of for someone traveling on an unrestricted fare to pay more than 1.5 to 1.8 times more than pax on the same flight who paid the least. Southwest has been the only major U.S. airline to post profits in good times and bad, they have the happiest employees, the fewest complaints about their service, and the happiest shareholders. Other than that, as some would have us beleive, they don't know how to run an airline.

All of which is to say, a straightforward, understandable, and above all, equitable fare structure is a sound plan. Pricing models which depend on gouging a relative few to subsidize the many is a foolish plan that is sure to explode in the faces of any airlines stupid enough to put such absurdity into practice -- the predictable consequences of such folly have come home to roost for the full-service majors. And yes, I agree 110% with the opinion that yield-management at the full-service majors has become a self-serving, self-perpetuating (and totally dysfuctional) tail that upper management is foolish enough to allow to continue to wag the dog.

That the full-service majors persist in their pricing follies proves only to serve how inattentive or stupid or arrogant -- or all of the above -- their upper managements really are. Without meaningful pricing reform, there will be no meaningful recovery for the Cartel.
 

usfliboi

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Aug 20, 2002
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Tom, While your talking to ben suggest that 100 dollar boarding fee .... thats a good idea, and we need all the positve feed back and money your guys can give !
 
OP
T

TomBascom

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On 10/14/2002 4:54:02 PM The Real Deal wrote:

... To make the 3 tier system work the lowest ticket would have to be substantially higher then the lowest fare now...
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This is a fallacy. The object is to increase the average fare. The low end does not have to be increased to do that -- what needs to happen is for more people to buy tickets that are priced higher than the current average. They won't do that in today's environment because the gap is so wide. But if the top fares came down to some reasonable level -- higher than the average fare -- and there was some sort of sensible differentiation between those fares and the lowest fares then people would buy them. Sensible differentiation does not include much of anything that the airlines currently use to separate out business travelers like Saturday night stays and so on.

Suppose, for instance, that the lowest available fare is $100, the highest is $2,000 and the average is $360. A flight with 100 people on it has $36,000 in revenue. Perhaps that flight is made up of:

10 @ $100
25 @ $200
40 @ $375
20 @ $500
5 @ $1000

If you can (for example) shift that to:

10 @ $100
20 @ $200
20 @ $375
50 @ $500
0 @ $1000

Then you get a 4% increase in revenue and an improvement in your average -- without touching the low end fares.

(That example is only to show that it isn't necessary to raise the low end fares. It might still be a good move. Obviously there are better mixes than what I showed.)

Why would people suddenly start paying $500 when they wouldn't before? Marketing would need to find some way to make it attractive -- I suggest an enticement based strategy rather than the current punitive strategy. Something that would work for me, for instance, would be to make that a completely unrestricted and fully transferable ticket. I could easily justify a reasonable premium for such a ticket for virtually all business travel. What I can't do is justify 4-8x the lowest cost fare for less than complete fungibility of the ticket.

Marketing, or someone, might also want to think about making such tickets easy and attractive to choose to purchase. It is currently very difficult to purchase anything other than the lowest possible fare. I know that there have been times when I was willing and even made an effort to try and do so (in order to get better rules) but was foiled in the attempt. This is especially true on the web site but phone reservations are heavily biased this way too. (Yes, I know I can choose unrestricted but the price gap prevents me from even considering it except when I need a good laugh.)

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Travellers have to vote with their dollar till the current system bursts.
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We are. That's why 88% of corporate travelers are on leisure fares... (and darned near 100% of non-corporate business travel is on leisure fares.) There are a heck of a lot of suits and briefcases on SWA flights too.
 

mrman

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Sep 10, 2002
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Reality Check-

You may want to be careful before you accuse your best customers for using back to backs. Most comuters and consultants purchase an initial one way and then Round Trips for an extended period of time for the Sat stay. These are perfectly Legal, but may appear to you or a gate agent/res agent as a back to back
 

KeepMyJob

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Aug 20, 2002
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Dear Mr. KCFlyer,
You really seem to enjoy BASHING airlines. Not just US Airways either. Your posts are everywhere. Never anything good or positive to say. It is obvious that you believe you are an expert in the business practices of airlines, as well as other businesses. I, for one, can see right through it. GET A LIFE!
And by the way - Since you are a Government employee, should'nt you be doing something other that surfing the internet playing airline expert and responding to posts while you are on Goverment time?
Not a very produstive use of my tax dollars, are you?
 

CPRich

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Aug 29, 2002
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Talking about driving away customers...

US is now threatening to revoke bonus miles earned through the numerous promotions that they have been freely distributing over the last several months.

The group they are threatening are probably their most active customers (several of the 'Top 500' acording to recent posts), and those most actively involved in following air travel given their participation in the various travel forums.

US is going to spend who know how much extra time and effort to track down and penalize these customers for a defect in their own systems and processes. They seem to just have a burning need to control and beat down their customers. Just tell us not to do it again, and fix your processes so it doesn't happen in the first place.

Perhaps they have been involved in contentious dealings with unions for so long that they just see customers as another group to try to grind down as much as possible.

I already made the hop after the last fiasco. Other airlines fly to the cities that I put my 200K+ US miles on. I took an ATL connection last week rather than a US direct and have spent about $5k just in the last month on travel - 70% of which probably would have been no-brainer US $$ before, but went elsewhere.

Just when I was ready to get over it and start coming back, they are smacking me down again. I just don't get it...
 

KCFlyer

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[BR][BR]
[BLOCKQUOTE][BR]----------------[BR]On 10/16/2002 4:02:10 PM KeepMyJob wrote:[BR][BR]Dear Mr. KCFlyer,[BR]You really seem to enjoy BASHING airlines. Not just US Airways either. Your posts are everywhere. Never anything good or positive to say. It is obvious that you believe you are an expert in the business practices of airlines, as well as other businesses. I, for one, can see right through it. GET A LIFE! [BR]And by the way - Since you are a Government employee, should'nt you be doing something other that surfing the internet playing airline expert and responding to posts while you are on Goverment time? [BR]Not a very produstive use of my tax dollars, are you?[BR][BR]----------------[BR][BR]Rest assured Keepmyjob that your tax dollars don't support me. [BR][BR]I don't BASH airlines...I BASH the idiocy of the fare structures, I BASH the implementation of customer unfriendly policies...I BASH value on one route with outright robbery on others. And I BASH any posts that tend to portray folks who fly low cost carriers as scum of the earth lowlifes. Those lowlifes are making many of the low cost carriers profitable - something that the majors aren't these days. One thing I don't do is ad hominem attacks on other posters. We're all entitled to our views, are we not? And I don't purport to be any kind of airline expert. I just prefer to deal with common sense - something airline management is lacking, IMHO. [BR][BR]As far as posting nothing positive - I have posted what I believe are some very positive ideas. I post what I believe would be something that could help increase airline traffic and profits. Something that might actually serve to reduce layoffs and concessions. Something that just might help you keep your job. My posts are met with we have to get costs under control first or We can't all be like Southwest. I doubt you are familiar with many of my posts, but to summarize most of them, I am a big proponent of what AA used to call value pricing. That's where you don't charge $1,200 to fly from St. Louis to Dallas, but by the same token, you don't charge $50 to fly from New York to Los Angeles. A simplified fare structure - WITHOUT these boneheaded penalty fees or use it or lose it policies. [BR][BR]I'm criticized by many as being a shill for Southwest. MAybe I am...they at least are doing something right. I don't advocate every airline becoming like Southwest, but right now, all airlines are having a tough time getting passengers. It's my opinion that a vastly simplified fare structure - 21,14,7 day advance and full fare. Drop the full fare down to something that will make the airline money, but won't make your customer wish they'd bought more vaseline. Raise the 21 day fares to a level where they at least cover the costs. If someone buys a 21 day advance ticket and decides to change it 7 or 14 or 1 day from the date of travel, charge them the difference between what they paid and what the new fare is and don't charge them a hundred bucks. You would eliminate the need for companies to play games to get affordable airfares. In my eyes, that's positive, but I suppose in your eyes it's very negative. [BR][BR]I am surprised at the large number of airline employees who applaud the change fees and penalties that were recently introduced. Those are things that are going to drive away even more customers. I've been pretty critical in the two Wal Mart threads that have been closed because some folks seem to believe that you get what you pay for. Well here's some news - the passenger is getting nothing more on a full service airline than they are on a low cost airline. The attitude that let them have the Wal Mart clientele is absolutely the worst attitude that any airline employee could have. Their money spends as easily as Donald Trump's or Warren Buffett's money. You NEED their money. [BR][BR]Finally - the local government here closes at 5:00. Yep, I'll sometimes post over breaks or at lunch, or even...heaven forbid...during a lull. I also post a lot in the evening and early morning hours. I'll make a deal with you - I won't worry about how overpaid/underproductive you might be and I'd appreciate the same from you. [/BLOCKQUOTE]
 

Slam&Click

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Aug 24, 2002
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This board has deteriorated into the P*ss, Whine & Moan Club. I dislike the rules & regs. that the majors have instituted. I agree that it is chasing away the customers. I dislike the attitudes of the employees that have been posting with few exceptions. I no longer work for US, and given the employee/customer exchanges and sentiments expressed here -- I'm glad that I don't.

I'd rather drive.
 

scot

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Knock off the personal attacks. If you dont agree with the poster, skip the posts. Everyone can say what they like as long as its within the posting guidelines and KCFlyers posts have been within the guidelines. Others though.......
 

ITRADE

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[BR][BR]
[BLOCKQUOTE][BR]----------------[BR]On 10/16/2002 11:45:03 PM Slam&Click wrote:[BR][BR] This board has deteriorated into the P*ss, Whine & Moan Club.  I dislike the rules & regs. that the majors have instituted.  I agree that it is chasing away the customers.  I dislike the attitudes of the employees that have been posting with few exceptions.  I no longer work for US, and given the employee/customer exchanges and sentiments expressed here -- I'm glad that I don't.[BR][BR]I'd rather drive.  [BR][BR]----------------[/BLOCKQUOTE]I think that there certainly are some malcontents in the employee ranks - just as there are malcontent passengers.[BR][BR]Unfortunately, the malcontent passengers are part of what keeps US afloat.
[P]BTW, Slam&Click, you registered nearly two months ago without a post. Coming out of the woodwork, eh??? [img src='http://www.usaviation.com/idealbb/images/smilies/4.gif'] [/P]
 

KCFlyer

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[BR][BR]
[BLOCKQUOTE][BR]----------------[BR]On 10/16/2002 11:30:19 PM KeepMyJob wrote:[BR][BR]KC FLYER,[BR]    You certainly went to great lenghts to justify yourself. Why would you feel the need to justify yourself in such a way if you were not.............GUILTY?????[BR][BR]    ----------------[/BLOCKQUOTE][BR][BR]Debate is point and counterpoint. I've given you some of my points....how about responding with a few counterpoints. Heck, you can even do it via Private Message if you'd like.
 

Tango-Bravo

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Aug 29, 2002
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[blockquote]
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On 10/16/2002 11:44:13 PM scot wrote:

Knock off the personal attacks. If you dont agree with the poster, skip the posts. Everyone can say what they like as long as its within the posting guidelines and KCFlyers posts have been within the guidelines. Others though.......
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Thanks, scot.

To add to the thought, I have found through considerable observation and experience that personal attacks are the defense mechanism of those who have no tenable evidence to support their opinions or -- as is usually the case when it happens here -- the personal attacker has nothing to refute facts or reality-based opinions supported by substantial evidence that they wish were not true.
 

Slam&Click

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Aug 24, 2002
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On 10/17/2002 9:23:01 AM ITRADE wrote:
BTW, Slam&Click, you registered nearly two months ago without a post. Coming out of the woodwork, eh??? [/P]
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Hi, ITRADE --
I'd posted quite a bit on the former USaviation version; have been on VF1 now with new employment. I've been a frequent reader, recently rather mute, as I've watched the subsequent concessionary fallout and antagonistic bantering. The entire situation is extremely difficult on everyone, however, it is particularly disturbing to read and view consistent negative employee attitudes. Although some of the negativity is understandable, it does nothing to strengthen an already weakened infrastructure. Given my long association with, and great admiration for US, I'm heartsick. I'm ever hopeful things will improve with the right mix of managerial decisions, improved employee communication/dedication and former and new customer loyalty, along with the (ever slow, but) eventual economic cyclical changes. Anyone out there have a magic wand?! [img src='http://www.usaviation.com/idealbb/images/smilies/4.gif']