Effect of JetBlue's enterence to the PIT market
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Just wonder how much biz travelers have been paying between PIT-BOS the last year? Anyone care to chime in?!
Try $1060.00 to $1169.90 a pop!! My company forced me to fly WN because they refused to pay for such an outrageous airfare. Or I have been able to come up with some creative flight segments to get the airfare under $500.00 which they don't balk at paying. Ofcourse it means that I waste an entire day flying but I am a segment whore....
Probably pretty well, but WN owns that market with a hair over 90% share of somewhere north of 1000 daily passengers each way per day. JetBlue's only adding one daily frequency -- little more than a ripple in the surface of the pond at this point
Considering that the average PIT-BOS fare on US was $290 in the second quarter of 2005, you can imagine that Jetblue can probably sell quite a few tickets at under half that price.
Flufdriver
Senior
- Aug 20, 2002
- 396
- 6
I love it...continue to give the product away! Why don't we just charge nothing and put the burden on the backs of the employees....AGAIN! When you put a new Wal-Mart in town, they sure do get busy!! It's easy to charge NOTHING when you form a new company and have low overhead to start...it's a "NO BRAINER"!! :down: The cheap flyers will just love it!! These are the same people that will fly somewhere for $50 bucks but will spend $150 bucks for a hotel room or $59 bucks per day for a rental car!!!!
HUH? WHEN? For the run of the mill infrequent flyer who price shops they might have gotten a $290 PIT to BOS airfare but I can tell you that I never got that. But then again I need to fly for business and we all know the businessman has been keeping US flying for many many years.
My receipts are proof of that!!
And FLUFDRIVER......anytime an airline enters a new market they offer airfares to attract new customers. How soon you forget simple AIRLINE MARKETING 101. How is this wrong? Ofcourse the "price conscious" consumer is going to grab those low airfares. I will be one of them too. But once that new airline has proven itself to it's new customers they will continue to fly that new airline because of VAULE....either through plane type, amenities, frequency and that almighty PRICE.
When your old CCY bosses ran the airline they ignored those factors and it shows to this day. Less frequency in certain markets, shrinkage to RJ's on longer routes, less amenities and the PRICE is still high on certain routes (aka PIT to BOS).
I for one am VERY HAPPY B6 is entering PIT. I now have another option to get me to my company's headquarters in BOS. WN did a good job getting me to work in a timely and less expensive way, but B6 is going to steal me away from WN now.
Flufdriver
Senior
- Aug 20, 2002
- 396
- 6
Trvlr64, I'm very well knowledged on the Ailine Marketing 101 program thank you. I'm glad you love shopping at Wal-Mart. I'm sure you like getting paid a FAIR wage and can pay your mortgage...that's all we wanted and NOT 1980's wages. Soon we are going to hand out smiley face stikers on the airplane to make you all feel at home! I recently had a lady ask me..."Since when do I have to pay 10 bucks for my meal, I simply said since you paid $49 bucks for you ticket!!! Again, thanks for the brush up on airline marketing, I feel better now knowing we are making pax happy with these cut throat prices!! Think about it trvlr, it cost you about $35-$40 bucks to fill your tank in your car and for anoter 20 bucks you can go to BOS in a little over an hour on a 30 million dollar airplane.
No.....Thank You.....once again another airline employee is taking out their anger on their customers. OOPS!?! I bet you didn't mean to do that, did you?
Your bosses bent you over the fence and took your pensions away, lowered your wages and generally pissed you all off. WOW! Like the rest of the world didn't know this.
Your customers don't set the airfares, your customers don't lower and raise the fuel prices. BUT YOUR CUSTOMERS do keep your airline in BUSINESS. I suggest you take your displeasure of how your airline is run to the people it matters to.....and those people are your bosses.
You chose a career in a business that is taking it the shorts. Either live with it or move on. Don't blame me for it.
And as for this remark to you by a passenger....I recently had a lady ask me..."Since when do I have to pay 10 bucks for my meal, I simply said since you paid $49 bucks for you ticket!!! She's your basic NON FREQUENT FLYING idiot in my opinion. Your VFF like me all know exactly what is going on with your airline and every other airline out there. We're educated about your business.
And remember it's YOUR BOSSES that have created this problem with the airlines, it's just us customers that take advantage of it.
And you do it to when it's a product you need or want.
Flufdriver
Senior
- Aug 20, 2002
- 396
- 6
Trvlr64, you don't really get it from an employee's view and I don't expect you to. Your a consumer looking for that 2 dollar bargain for a buck. Get this and understand this...I'm NOT mad at the consumer, after all I'm a consumer. I'm mad at that people that take these jobs for substandard wages just to get into this industry. Put the show on your foot...I don't know what you do for a living but lets say you work for this company for twenty years and are making a good living. Suddenly some new company comes on the block, rents his equipment cheap, offers NO benefits, offers NO retirement, has most of it's operation using home base, doesn't own any building or basic assets. Suddenly they can offer the SAME product for half the cost. After about a year your boss comes to you and says we can't keep losing customers and money...we need to HALF your salary and that retirement you THOUGHT you had...gone, overnight. This wasan't your bosses fault after all it's worked for years. This is what has happened to the airline industry. I wouldn't wish this on anyone. I want to read your posts after it happens to you because Jo-Blo over there is doing the same thing you been making a living on for years at half the cost. You wouldn't be mad at the customer that is using his service, you would be mad at the employees that are doing the SAME job you've been doing for years...big difference is they are doing it at half the salary!! Just don't look at "what am I saving"...look at the big picture. I pray it NEVER happens to you. It wasn't my fault so don't say I'm simply another mad employee. Do me a favor, if it does happen to you, your salary is cut by 52% and your hard earned retirement is gone...PM me and I want to see how your attitude is!!! It won't be pleasurable. I'm tired of the consumers attitde like yours about 'another mad employee"...that's the "I got mine, screw you attitude" Remember we have families and kids that I was saving for college...not to worry...you got a nice cheap ticket! I HOPE it doesn't happen to you! If it does, you'll understand.....until then you won't!
You're correct. It does suck to be an airline employee in the 21st century Flufdriver. I wouldn't want to work for an airline today. Do I feel sorry for the US employees? Ofcourse. 3 close friends here in PIT, all US employees or ex-employees have been affected by the decisions of your management.
If you re-read my posts you'll see I never said I'm in favor of the elcheapo fares, but I sure will take advantage of them......and because I'm paying through the nose for those other flights I have to take that cost well over $1000.00.
So in essence it's tit for tat. I get screwed on flights that cost above the norm and then I take advantage of the cheap fares when necessary. Everyone does it.
And as for not understanding your situation, I do. I was 16 years old when my father was "downsized". I know exactly how it feels to have to go on foodstamps and the feeling of utter embarassment when my mother had to pull those out of her purse to pay for our groceries. It took my father many years to get back to a "livable wage" to support his family. And he took a job that he hated. I swore I would never ever go through that again in my adult life. I now have a career that if it ended tomorrow I can return to the hospital setting and start over again. Albeit at a lower wage but not poverty level like my family experienced.
So once again. If you want to "be angry" at anyone, be angry at those Yale/Harvard/Princeton bafoons that run the airlines today. They are the reason for every failure in the airline industry, not your customers. They set the prices, not us. Fair fares is reasonable and a good montra.
If you re-read my posts you'll see I never said I'm in favor of the elcheapo fares, but I sure will take advantage of them......and because I'm paying through the nose for those other flights I have to take that cost well over $1000.00.
So in essence it's tit for tat. I get screwed on flights that cost above the norm and then I take advantage of the cheap fares when necessary. Everyone does it.
And as for not understanding your situation, I do. I was 16 years old when my father was "downsized". I know exactly how it feels to have to go on foodstamps and the feeling of utter embarassment when my mother had to pull those out of her purse to pay for our groceries. It took my father many years to get back to a "livable wage" to support his family. And he took a job that he hated. I swore I would never ever go through that again in my adult life. I now have a career that if it ended tomorrow I can return to the hospital setting and start over again. Albeit at a lower wage but not poverty level like my family experienced.
So once again. If you want to "be angry" at anyone, be angry at those Yale/Harvard/Princeton bafoons that run the airlines today. They are the reason for every failure in the airline industry, not your customers. They set the prices, not us. Fair fares is reasonable and a good montra.
BoeingBoy
Veteran
- Nov 9, 2003
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Well, moving on to Airline Econ 201 and to flesh out sfb's earlier data...
In 2Q05, 6% of US PIT-BOS passengers paid between $76 & $100 o/w - some could have paid less since that's the lowest fare "bucket" that at least 5% fell into. That's between 15.3 and 20.2 cents per mile.
39% paid at least $300 - that's 60.5 cents/mile.
Finally, the highest fare "bucket" - $551 to $575 - was paid by 13% of US passengers. That's $1.11 to $1.16 per mile. Just like the lowest "bucket", some could have paid more than this - just not 5% or more of US passengers.
One could argue that the low fare 6% got a bargain since that yield adjusted for LF was below cost - US cost, that is. However, the other 90%+ paid at least what it cost to provide the service, based on US CASM with a ball park adjustment for segment length.
However, B6 has a lower CASM than US - even after adjusting for stage length. Throw in a fudge factor for the 190's having a higher CASM than the A320's plus adjust for a 75% LF, and their $69 fare is probably breakeven to slightly profitable since it equals a yield of 13.9 cents/mile.
So I guess the question becomes who to blame for this situation? The customer that see's someone else offering a lower fare? The lower cost carrier for having lower costs? US management that's been unable to achieve significantly lower costs despite two trips to BK and the resulting $3 billion plus per year in cost reductions?
Jim
In 2Q05, 6% of US PIT-BOS passengers paid between $76 & $100 o/w - some could have paid less since that's the lowest fare "bucket" that at least 5% fell into. That's between 15.3 and 20.2 cents per mile.
39% paid at least $300 - that's 60.5 cents/mile.
Finally, the highest fare "bucket" - $551 to $575 - was paid by 13% of US passengers. That's $1.11 to $1.16 per mile. Just like the lowest "bucket", some could have paid more than this - just not 5% or more of US passengers.
One could argue that the low fare 6% got a bargain since that yield adjusted for LF was below cost - US cost, that is. However, the other 90%+ paid at least what it cost to provide the service, based on US CASM with a ball park adjustment for segment length.
However, B6 has a lower CASM than US - even after adjusting for stage length. Throw in a fudge factor for the 190's having a higher CASM than the A320's plus adjust for a 75% LF, and their $69 fare is probably breakeven to slightly profitable since it equals a yield of 13.9 cents/mile.
So I guess the question becomes who to blame for this situation? The customer that see's someone else offering a lower fare? The lower cost carrier for having lower costs? US management that's been unable to achieve significantly lower costs despite two trips to BK and the resulting $3 billion plus per year in cost reductions?
Jim
You don't "understand" anything... What you are saying is you have yours now..forget what happened 30 years ago. This is today and people that live in your neighborhood are being beat down and you could care less. your day will come...and the tears and worry will hit you because you thought you were better than everyone else, you think you are going to hop right back into another industry with no problem, good luck. Usairways used to have 24 seats in first class too sfo for all the wunderkinds to the silicon valley...where are all those snobs now???huh...guess they were sold to the lowest bidder. Man I hope this doesn't happen to you.
LCC is going to lower its fares on LGA-PIT flights to levels competitive to JBLU and keep the lion's share of the high yielding traffic (Manhattan business types ain't trecking to JFK -- much less to fly on a very unreliable airline -- unless the price is significantly less). JBLU will get the dregs. One analyst said last week that 17 out of JBLU's last 20 new routes were unprofitable. If this isn't "number 18," I'll be shocked.
JBLU arguably has a better shot on the BOS-PIT run, but I also doubt that route will be profitable. LCC has a vast schedule advantage over JBLU (and might now add even more seats), and combined with ff loyalty, it will assuredly achieve a large yield advantage over JBLU. So my guess is unprofitable route 19.
JBLU arguably has a better shot on the BOS-PIT run, but I also doubt that route will be profitable. LCC has a vast schedule advantage over JBLU (and might now add even more seats), and combined with ff loyalty, it will assuredly achieve a large yield advantage over JBLU. So my guess is unprofitable route 19.
Yup, that's the answer. Blame and attack the customers who pay your salaries. And wish bad things to happen to them. That will solve everything.
As one of those "wunderkinds" that you seem to despise, I have worked hard to always be prepared for changes, keeping my skills relevant in the market, and producing value for my employer. Perhaps that is something that you should think about, instead of blaming everyone else for your situation.
B6 does not need to take over the whole market to be profitable. Indeed, they have less than 50% share in almost all of their markets. They also manage to maintain a fare PREMIUM in the NY-Fla market. So I would not necessarily assume that pax will stay with US RJs and old planes when B6 offers better service. I doubt that B6 will make huge profits on these routes, but it shouldn't be too difficult to be profitable.
US, on the other hand, will definitely be losing money on these routes if they try to match B6's fares.
As always, a very informative post. And you raise good questions facing all legacies, not just US. The same issues face UA, AA and the others.
My guess is that the legacies continue to trim their domestic ops and eventually use domestic flights primarily to fill international flights. Solely domestic pax may end up on WN, B6 and Branson's latest venture, VirginUSA or whatever it's gonna be called.
