From an AP report entitled Air Fare Increases on Brink of Failure
..."In the past few weeks, however, some carriers have reported softness in second-quarter bookings, which is likely to make it harder to raise prices. Airlines also have continued to offer discounts and fare sales, even as they pushed published fares higher.
(Jamie) Baker, the analyst, said consumers are paying only 1 to 2 percent more on average than a year ago for U.S. flights because of the large number of tickets sold through secondary sources such as priceline.com and hotwire.com
United is particularly aggressive in selling through such sites and in offering discounts in contrast to its "higher-end approach" on some tickets, Baker said in a note to clients."
When will the revenue planners at United realize they are creating a customer expectation for continued deep discounting through this behavior?
Last minute travel on an airline used to mean paying the highest price. Dumping seats on priceline.com and hotwire.com has incentivised customers to wait and buy when the carrier's revenue planners panic. The result is: 1) extremely high load factors that just cover, or come close to covering trip costs and 2)a missed opportunity for holding the customer's cash longer. Extremely high load factors also contribute to an inevitable decline in perceived product quality and further inhibits yield increases.
This is not the flightpath to prosperity. Differentiate United's product and charge for it!
Comments, anyone?
..."In the past few weeks, however, some carriers have reported softness in second-quarter bookings, which is likely to make it harder to raise prices. Airlines also have continued to offer discounts and fare sales, even as they pushed published fares higher.
(Jamie) Baker, the analyst, said consumers are paying only 1 to 2 percent more on average than a year ago for U.S. flights because of the large number of tickets sold through secondary sources such as priceline.com and hotwire.com
United is particularly aggressive in selling through such sites and in offering discounts in contrast to its "higher-end approach" on some tickets, Baker said in a note to clients."
When will the revenue planners at United realize they are creating a customer expectation for continued deep discounting through this behavior?
Last minute travel on an airline used to mean paying the highest price. Dumping seats on priceline.com and hotwire.com has incentivised customers to wait and buy when the carrier's revenue planners panic. The result is: 1) extremely high load factors that just cover, or come close to covering trip costs and 2)a missed opportunity for holding the customer's cash longer. Extremely high load factors also contribute to an inevitable decline in perceived product quality and further inhibits yield increases.
This is not the flightpath to prosperity. Differentiate United's product and charge for it!
Comments, anyone?
