First Flight in About 3 years

[Dog Wonder]

WN plans ten years into the future, US thinks thirty days into the future.

 

[CallawayGolf]

WN plans ten years into the future, US thinks thirty days into the future.

A whole thirty days? Such generosity in your ad hominem attack.

 

[SparrowHawk]

A whole thirty days? Such generosity in your ad hominem attack.

When Doug Parker's words and deeds speak for themselves why interupt?

Ad Hominem attacks? Is that when Doug Parker made his comments about Customer Service??

 

[CallawayGolf]

When Doug Parker's words and deeds speak for themselves why interupt?

Ad Hominem attacks? Is that when Doug Parker made his comments about Customer Service??

Care to provide the Parker quote in context for all to see?

 

[BoeingBoy]

Finding the ancillary revenues mostly from bag fees is relatively easy. Compare financials before the fees were instituted versus after. The net increase is quite easy to calculate. As to the lost revenue, when have they ever said how much was attributed to having a bag fee in place?

Actually, doing it your way yields a meaningless result since "financials" vary from quarter to quarter and year to year anyway (publicly released, shorter intervals available to mgt). Depending on what you mean by "financials" (it's not a very specific term), US' "Other" operating revenue increased $21M YoY in the 3rd quarter - is that how much revenue the fees produced? Total revenue decreased nearly $540M - did the fees produce negative revenue? Operating profit/loss improved by nearly $700M - it that the fee revenue? You see the problem with your method.

Much easier, and accurate, is to simply add up the fees collected in each category - checked baggage being one such category. It stll doesn't represent the net gain in revenue, though. That will tell you (at least it'll tell management) how much revenue each specific fee brought in for that reporting period.

You might need to take an accounting class yourself. There is no such thing as bottom line in revenue.

Correct from a P&L statement perspective. But only looking at revenue, which we are, it's the total of all the revenue from various sources - ticket sales, cargo, mail, UM fees, ticket change fees, "talk to a person" fees, maint performed for other airlines, interest income, etc, etc. List them all, draw a line under the last one, add them up, and the number at the bottom - the "bottom line" - is the total. It's a number you won't find on a P&L.

When WN increases PAX revenue they have to actually give them a seat and all cost-driven services that go along with it. When you charge for a bag you would handle anyway, there is relatively little increase in costs so those revenues drop to the true bottom line.

Since WN is flying the seat around, there's very little extra cost per additional passenger, just as for the bag. That rational cits bpth ways. However, when US loses a potential pax because of the fees, they lose the revenue that ticket represents and any bag (or other) fee that pax would have paid.

The real point here is that if WN begins to charge for bags, where else would PAX go to avoid the fees? Nowhere among the majors so they would not experience the fabled book-away; so every dollar in the $300+ million dollar range would have an immediate impact on their bottom line and shareholder value.

Of course, they wouldn't gain market share due to the lack of fees either - how much is a 1% increase in market share gain worth? How about $800 million a year. Now, about that $300 million they're fools for passing up....

Jim

 

[Dog Wonder]

Repeat

Management can do no wrong. Management can do no wrong. Management can do no wrong. Management can do no wrong. Management can do no wrong. Management can do no wrong. Management can do no wrong. Management can do no wrong. Management can do no wrong. Management can do no wrong. Management can do no wrong. Management can do no wrong. Management can do no wrong. Management can do no wrong. Management can do no wrong. Management can do no wrong. Management can do no wrong. Management can do no wrong. Management can do no wrong. Management can do no wrong. Management can do no wrong. Management can do no wrong. Management can do no wrong. Management can do no wrong.

We all can find Nirvana with the right mantra.

 

[CallawayGolf]

Of course, they wouldn't gain market share due to the lack of fees either - how much is a 1% increase in market share gain worth? How about $800 million a year. Now, about that $300 million they're fools for passing up....

Jim

Wow. $800M/year. I know how you got there but exactly who is claiming to have gained 1% market share or $800M in revenues from a no bag policy? Of course that $800M still only translates to $16M in net income based on a generous 2% factor for the industry. So the $300M still looks exceptionally good to everyone but WN. If you're right, however, I'm sure the major airline CFOs will be repealing those baggage fees any day now.

 

[SparrowHawk]

Care to provide the Parker quote in context for all to see?

If I were so inclined I would have already done it.

It's out there and it does speak for itself. I don't save links and clutter up the hard drive with press releases and news quotes from documented liars. He's engaged in a non stop assault on Customers since September 2005 and there is more than one comment.

From the Hub and other statements from Mr. Parker

I have heard that the reconfigurations of the A321 have stopped. Are they reevaluating that? "I know many elites are extremely upset with this.[/The reconfigurations continue and we have said before that we're willing to take a hit on one front to make strides on another, namely first class flyer perception vs. an increase in revenue."


Did you ever pause to consider that many customers do WORSE than not fly US Airways as a result of Doug Parker's actions? Consider this from another web site. Bag fees don't recoup the cost of people who react as the customer below did and there are quite a few out there who exactly as below.

As most of you know I have vouchers coming out of my arse. I accepted them in case I fell short this year.

Well with some creative shopping and application of said vouchers I was able to do the following.

A long Weekend in ABE-PHL-BRU for an Add Collect of $22.95 with 8,494 EQM's

A pure Milage Run PHL-LAS-SJC for an Add Collect of $5.03 with 5,342 EQM's.

Plus if you look at the total miles earned of 27,672 I've earned a free domestic award ticket.

Like I always say "Show me the rules and I'll bend them to beat you every time"
I LOVE the free market. BTW the upgrades on the MR Cleared all four segments.

The bottom line is the company has lied to often to it's elite travelers it's like trying to believe a heroin addict when they say they're clean

 

[CallawayGolf]

If I were so inclined I would have already done it.


From the Hub and other statements from Mr. Parker

I have heard that the reconfigurations of the A321 have stopped. Are they reevaluating that? "I know many elites are extremely upset with this.[/The reconfigurations continue and we have said before that we're willing to take a hit on one front to make strides on another, namely first class flyer perception vs. an increase in revenue."

Was that how the cabins were configured when the old US Airways was in it's second bankruptcy in three years and was nearing liquidation? Yep it sure must be anti-customer to put a product on the market that actually makes money rather than losing it. Hey why not just put 20 seats on an A320? Would customers prefer that too?

Not a very convincing argument to support your claim.

 

[BoeingBoy]

Wow. $800M/year. I know how you got there but exactly who is claiming to have gained 1% market share or $800M in revenues from a no bag policy?

Article

Of course that $800M still only translates to $16M in net income based on a generous 2% factor for the industry.

Remember what you said about those bag fees - added revenue with little cost? WN was already incurring the cost of flying the seats around - the planes, employees, facilities, most of the fuel, landing fees, etc are already paid for. So the increase in RASM from the extra revenue is a lot more than the increase in CASM caused by carrying the extra passengers. That means your 2% margin number is meaningless. Most of that extra revenue from market share gain should drop the the P&L bottom line going forward. If you want to talk about fully allocated cost of carrying extra passengers, we need to also talk about fully allocated cost of carrying bags.

Jim

 

[CallawayGolf]

Article



Remember what you said about those bag fees - added revenue with little cost? WN was already incurring the cost of flying the seats around - the planes, employees, facilities, most of the fuel, landing fees, etc are already paid for. So the increase in RASM from the extra revenue is a lot more than the increase in CASM caused by carrying the extra passengers. That means your 2% margin number is meaningless. Most of that extra revenue from market share gain should drop the the P&L bottom line going forward. If you want to talk about fully allocated cost of carrying extra passengers, we need to also talk about fully allocated cost of carrying bags.

Jim

I don't believe US has published actual baggage revenue numbers so I'm not sure what besides "financials" your would prefer to use. The first quarter 2008 Other Income was $194M on a total of $2.8B in revenue. In the first quarter of 2009 after the fees were added Other Income was $269M on $2.4B in revenue. That's a 38% increase in Other Revenue on a 14% drop in total revenue. An educated guess would say that most of that 38% increase was from the baggage policy.

 

[SparrowHawk]

Was that how the cabins were configured when the old US Airways was in it's second bankruptcy in three years and was nearing liquidation? Yep it sure must be anti-customer to put a product on the market that actually makes money rather than losing it. Hey why not just put 20 seats on an A320? Would customers prefer that too?

Not a very convincing argument to support your claim.

Others will have the quotes, like I said, he's a well documented liar and you can't escape that one simple fact.

I was a Chairman's for damn near a decade and what I'm talking about isn't about 26F seats vs 16F per se. It's about the ATTITUDE of Sr Management towards customers. BTW how many profit dollars has all of that scary talent in Tempe generated the last three fiscal years compared to oh WN or CO? The numbers aren't favorable.

Moving along to DOT complaints. Who is still DEAD LAST or next to it since 2005? Is it WN, CO or parhaps that customer friendly economic juggernaut US Airways? Proof posite to this poster of the attitude that prevails at the top towards customers.

The whole airline is based upon a lie. The stock ticker of LCC just proves that those at the top are not to be trusted. As others have dutifully pointed out calling yourself a Low Cost Carrier while having the highest non RJ CASM of all domestic carriers doesn't make you a low cost carrier anymore than you standing in garage makes you a car.

 

[BoeingBoy]

I don't believe US has published actual baggage revenue numbers so I'm not sure what besides "financials" your would prefer to use.

Hey, it was your example - get bag fee revenue by comparing financials. I just went with what your example.

An educated guess would say that most of that 38% increase was from the baggage policy.

Even better than an educated guess is to look at the numbers supplied by the BTS each quarter. It won't be exact, since some baggage fees have been around a long time (overweight, oversized, etc) but it's better than guessing.

Okay I'll give you that WN takes 100% of their $80M increase in PAX revenue to the bottom line (just for grins). That is still less than 25% of what US and the other majors are contributing to their bottom line based on the fees.

You can ignore the market share gain if you like - it's effect will show up mainly going forward since it's a recent occurance. Some analysts have said what you have - WN is leaving money on the table by not charging the fees. Of course, if you go down that line of reasoning, look at the money WN leaves on the table because they don't have FC, don't fly to Europe, don't raise their fares to "legacy" levels, etc. WN could just be like the legacies and watch the big profits come rolling in if only their management were smart enough. Problem is that the legacies haven't been seeing those big profits rolling in, so why in the world would WN want to imitate them? The shareholders seem rather content with steady profitability, not big profits followed by even bigger loses.

Let me ask you this - in 2008 when ala carte was announced Tempe said the fees would provide $400-500M in additional revenue. Throughout the rest of 2008 and 2009 additional fees were added and some previously announced fees were increased (US led in some of those changes and followed for others), yet the $400-500M figure stayed the same. Until just recently, after adding/increasing fees yet more the number changed to "over" $500M. Would that not indicate that even Tempe realized that the additional revenue for each fee added/increased was at least partially offset by loss of passengers willing to pay those fees? That the gross fee revenue wasn't all tranferring to the P&L bottom line?

Jim

 

[Art at ISP]

First of all, US is an LCC--not a low COST carrier, but a low CLASS carrier......

But seriously folks.....

Doug Parker has been quoted not long ago as saying he doesn't understand why other airlines concentrate so much on customer service.....I may be paraphrasing a bit, but that is the gist of what he said. That is about the only honest statement he's ever made.

Regarding Sparrowhawk's comment about credibility, I have had my own experiences with Team Tempe--which include sitting across a conference room table with them and having them discount some ACTUAL market information we offered them for FREE and having one member of staff lie to my face.

I flew out to Tempe on at least two occasions to meet with them to try to speak up for customers (and employees by the way), and we all see the result of my actions---nothing. They told me they would do some things and never did. We have ALWAYS tried to support employees--some of you remember the "Kissed by a Cockroach" event we did where we gave Hersheys candy to flight crews, and some of us flew to PIT on our own dime to support folks who were displaced by the Greentree closing.

Now CCY was far from perfect, but here is a small contrast to their attitudes toward customers:

When the closing of some clubs, including ROC was announced a few years ago, I was having lunch with Deborah Thompson (one of the best customer relations experts ever). We got to discussing the closures, and as I gave the passenger's point of view she saw I had a point, and at the table got the executive responsible for clubs and marketing on the phone and put me on with him. He explained all the reasons why the ROC club had to close (rents and facilities reasons) and that they knew they would take a hit but they couldn't afford the increased rents. We didn't win that one, but we have been successful in getting SOME club closures reversed..

Now to the current team. One of my conversations with a Customer Relations manager (who in fairness is not there any more) centered on a list of high value flyers who belonged to FFOCUS who asked me to find them new airlines. These people spent an AVERAGE of $18K a year on US alone, and a good number of them were well over $50K in US spend. Now if I were in charge of customer relations and found out these people wanted to bolt from US I'd be concerned....wouldn't you?

So this person said she really didn't think so many high value flyers were unhappy, but if I gave her a list of 10 of them she would call each one personally to see how she could get them to stay. My list at the time was approaching 300, who had contacted me personally by the way. I gave her 64 names, and followed up individually with EACH one over the next month. What do you think the result was? NOT ONE PERSON WAS EVER CONTACTED....NOT ONE.

As a result, about 80% of the people on my list to my knowledge now fly CO or DL as their primary carriers, and avoid US wherever possible. Admittedly it is not as easy for some to move, but there are people who live in CLT and PHL who have moved. I would estimate that the lost revenue from this group alone is between $3.5M and $5M per year, but remember as I said before for each hundred who come to me there are thousands who move quietly.

To be fair to Tempe, however, I will say that the new person in charge of Customer Relations is excellent, and has been very open to helping us get member issues resolved when they come to us. We have begun to build a good working relationship with him, and our two excellent liaisons have done an amazing job to date....so perhaps all is NOT lost, but there is a LONG way to go.

To summarize, until Tempe realizes that the customer and the employees are not liabilities but assets, there is no hope for this place...

EMPLOYEES should be the first priority of management. Happy employees find it much easier to make customers happy.

CUSTOMERS should be the next priority--happy customers come back over and over, and do spend more.

SHAREHOLDERS should be last--fix the first two and this one fixes itself.

Unfortunately Team Tempe has an inverted view of the priority list--and we are all paying the price.

My BEST to you all....

 

[Dont call me Shirley]

s.

The whole airline is based upon a lie. The stock ticker of LCC just proves that those at the top are not to be trusted. As others have dutifully pointed out calling yourself a Low Cost Carrier while having the highest non RJ CASM of all domestic carriers doesn't make you a low cost carrier anymore than you standing in garage makes you a car.

It's been said before, but perhaps the ticker should be LLCC: Low Labor Cost Carrier.

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