How T-Mobile’s disruption holds lessons in the American-US Airways merger

[ContUNITEus]

Want an idea of what commercial airline carriers could look like if the Department of Justice manages to block the merger of American Airlines and US Airways? Take a gander at a different kind of carrier, T-Mobile.

The No. 4 mobile-phone company last week rolled out a new program that slashes the price of international calls, all but eliminates texting fees and bundles free (if low-speed) overseas data roaming into basic rates. It's the third disruptive innovation from T-Mobile since the government scuppered its $39 billion acquisition by AT&T. In March, T-Mobile eliminated service contracts, a dramatic marketing change that won it more than a million new customers in the last fiscal quarter. And in July, it introduced a twice-a-year upgrade scheme that forced the nation's two largest mobile carriers to scramble and hastily match.

Continue reading here:
http://www.bizjournals.com/jacksonville/news/news-wire/2013/10/16/tmobile-example-in-american-usairways.html

 

[WorldTraveler]

Outstanding article on so many levels...shows the necessity for AA and US to solve their labor problems, be creative and stop trying to make other companies' strategies work for themselves, and recognize that the gov't and customers will play key roles for AA and US, independent or merged.

 

[Jacobin777]

I've been a T-Mobile customer for >10+ years. Their customer services has always been "top-notch" and their product+services have improved quite a bit the past 5-6 years. I was very happy when the merger was blocked.

That being said, I was impressed when an AT&T customer was able to make a phone call from the top of Half-Dome. I didn't believe him until I tried the phone myself! Other AT&T customers who had the iPhone however didn't have service.

Coincidentally, guess who was instrumental in the making of the current AT&T? None other than Tom Horton.

 

[ContUNITEus]

I agree with you Jacobin, 100%. I was with at&t for 7 years and they kept on trying to squeeze every penny out of me that they could. They were never happy with the money that I gave them and worked tirelessly to get rid of me as a (grandfathered unlimited iPhone data user). During the last three years, their behavior became way too predatory, because they were diligently, and at every opportunity trying to get rid of my plan, all because they didn't want the free tethering. At first they invented tethering plans. When that didn't work out, they started pulling here, and then there, to make me pay for it in one way or another.

I never was a fan of T-mobile, because their phones were just not what I wanted. Sort of like I don't want to fly LUV because they only fly 737s and I like big airlines with fancy names like UNITED and American.

But again, two years ago, I had enough of at&t and their constant quest for more money, and I made the switch. I have to say that I am pleasantly surprised by T-Mobile, cuz they worked really hard to win me over.

As a consumer, I believe that his is exactly what needs to happen with US/AA. A merger of these two should be scrapped, in order to keep the prices low, the products improving and competition going strongly between all the airlines.

 

[Jacobin777]

As a consumer, I believe that his is exactly what needs to happen with US/AA. A merger of these two should be scrapped, in order to keep the prices low, the products improving and competition going strongly between all the airlines.

+1!

 

[robbedagain]

Even if u got ur wish contuniteus I would never see dp improving products to the levels of aaua n dl. He a cheapskate donkey w his tail btwn his legs. It would be nice to see our products go back to say the steven wolfe era when they had nice products

 

[nycbusdriver]

Even if u got ur wish contuniteus I would never see dp improving products to the levels of aaua n dl. He a cheapskate donkey w his tail btwn his legs. It would be nice to see our products go back to say the steven wolfe era when they had nice products

Amen to all you've said.

 

[AA-MRO.COM]

Want an idea of what commercial airline carriers could look like if the Department of Justice manages to block the merger of American Airlines and US Airways? Take a gander at a different kind of carrier, T-Mobile.

The No. 4 mobile-phone company last week rolled out a new program that slashes the price of international calls, all but eliminates texting fees and bundles free (if low-speed) overseas data roaming into basic rates. It's the third disruptive innovation from T-Mobile since the government scuppered its $39 billion acquisition by AT&T. In March, T-Mobile eliminated service contracts, a dramatic marketing change that won it more than a million new customers in the last fiscal quarter. And in July, it introduced a twice-a-year upgrade scheme that forced the nation's two largest mobile carriers to scramble and hastily match.

Continue reading here:
http://www.bizjournals.com/jacksonville/news/news-wire/2013/10/16/tmobile-example-in-american-usairways.html
 
 
 
 
The airlines do this today but the only people who suffer are the employees we subsidize it all fuel ,low ticket prices, higher landing fees, why pass it on to the consumer when we can reduce the pay and benefits for the employees. Gee that's great and innovative no wonder why we are such a pleasant bunch to be around.  

 

[FWAAA]

 
 
 
The airlines do this today but the only people who suffer are the employees we subsidize it all fuel ,low ticket prices, higher landing fees, why pass it on to the consumer when we can reduce the pay and benefits for the employees. Gee that's great and innovative no wonder why we are such a pleasant bunch to be around.  

You guys all had pay and benefits reduced and, understandably, that leads to unhappy employees.   That shouldn't surprise anyone.   
 
At jetBlue and Virgin America, all I hear is that their employees are thrilled to be working in the airline industry despite their very low pay.  Those airlines never had a defined benefit pension to freeze or terminate.   

 

[WorldTraveler]

yet both carriers are facing large numbers of pilots who were on furlough from the legacy carriers return to them... maybe the allure of eventually flying a widebody is worth more than other factors?

 

[MetalMover]

Outstanding article on so many levels...shows the necessity for AA and US to solve their labor problems, be creative and stop trying to make other companies' strategies work for themselves, and recognize that the gov't and customers will play key roles for AA and US, independent or merged.

 
 
Gee, looking at AA's recent profit numbers, I would say their labor problems are well under control. Same goes for US after their trips to bankruptcy.

 

[MetalMover]

You guys all had pay and benefits reduced and, understandably, that leads to unhappy employees.   That shouldn't surprise anyone.   
 
At jetBlue and Virgin America, all I hear is that their employees are thrilled to be working in the airline industry despite their very low pay.  Those airlines never had a defined benefit pension to freeze or terminate.   

Agreed.  Those of us who have been working in this industry for a considerable amount of time have seen pay and benefits impacted greatly. As for the pension, we were all promised one when we accepted our job offers. 
So employees of JetBlue and Virgin America, or any NEW employee to ANY airline do not know any better. They know the terms of their employment regarding pay and benefits and can decide whether or not to accept a job offer. 

 

[NYer]

A number 4 and a number 5 airline cannot afford anything near industry leading contrats.

 

[IORFA]

Plus, Jetblue insinuated that they are losing pilots at least due to their lower pay. Maybe other employees as well, but they are easier to replace.

 

[Bob Owens]

You guys all had pay and benefits reduced and, understandably, that leads to unhappy employees.   That shouldn't surprise anyone.   
 
At jetBlue and Virgin America, all I hear is that their employees are thrilled to be working in the airline industry despite their very low pay.  Those airlines never had a defined benefit pension to freeze or terminate.

JetBlue mechanics earn around 15% more than AA mechanics with a lot more paid time off. Who told you that workers at Virgin and Jet Blue were happy? Virgin and Jet Blue? Neither have Unions which allow them to speak out. Seems that by that standard you would say AA and US workers are happy as well. I recall the US Exceutives telling us how happy their mechanics were, they even showed a video of some mechanic who won a Mustang as proof.