Is This A Reason That Uair Is Losing Money?

usairwaysfan

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Nov 5, 2003
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Gavin Reynolds (Rochester, NY) 05/12/04 - Some airlines are known for their cheap tickets. They're credited, in part, with boosting travel at the Rochester airport, and most travelers fly a low-cost airline because of just that, the price.

Travelers like Keith Dardis are convinced it's a bargain.

Dardis said, "It's probably a perception but yeah, I feel like I'm getting the best deal, I don't know if that's actually the case."

It may not be the case.

We checked prices two months in advance flying from Rochester to several destinations.

“Discountâ€￾airlines like Jet Blue, Air Tran and Southwest were consistently more expensive than the major airlines.

A round trip ticket to Fort Lauderdale Florida leaving later this month on Southwest cost $400 -- and $326 on Jet Blue. But a ticket on US Airways was under $230. And on Northwest: less than$220.

Recently, travel agent Lila Ford is booking fewer trips through discount airlines.

"They have had a great marketing plan,â€￾ she said, “and they've made everybody aware that their fares are lower, even when they're not lower."

For anyone going to Las Vegas leaving the last week of May, the Jet Blue fare listed was almost$ 580; Air Tran: just under $320. Compare that to US Airways: round trip was$ 340. Northwest also less expensive at around $320.

Low-cost airlines can still be low-cost.

Jet Blue is still the best price to New York City, and travel experts said the key to getting a great discount deal is buying your tickets well in advance.

The experts advise the savvy traveler to--not just assume one airline has the best price. Call a travel agent, they say, or search flights on all airlines on the web.

Here's another comparison: this time, we checked fares from Rochester to Puerto Rico where Jet Blue advertises $119 each way on its Web site.

But when we checked a round trip flight to San Juan cost almost $500 on Jet Blue. American was $460 and US Airways was the lowest at $360.

Why the disparity between advertised price and actual price?

The cheap seats go fast.

Ford said, "I really find that many times, especially in the high season, their fares are higher because all the inventory seats, the lower inventory seats are gone.

However, discount airlines top the list in "Customer Satisfaction." Passengers love Jet Blue's satellite TV and the guarantee of a jet instead of a cramped commuter plane.

Discount airlines have increased competition and that has brought down the average cost of flights out of Rochester.
 
I'm from philly and watch a lot of the local sports teams on tv. All I see is southwest. Again and again.They probably arent going to really be any cheaper than U at PHL, but everyone is gonna think they are.I know U is broke, but losing the sports teams in philly was a big mistake.

And could they make the usairways logo on those gofare billboards any smaller?
 
The key is that the LCC's average fare is reasonable. I'll bet if they fly to SJU on a Tuesday and return on a Wednesday, this will become obvious, for instance.

The key to a business like LUV, whom the public thinks is full of nothing but trailer trash heading to see the Mouse is the guys who pay $200 today to fly to MCO, instead of paying $900 on a major.

The other issue is this: LCCs generally have reasonable fares all over their route networks--the majors only beat the LCCs during a sale, or when an LCC comes to town--see PHL.
 
Its not the occasional perception. Its the overall fares longterm. UAir has been a predominatly higher fare biz traveler class airline for years. Luv and others have always been low fare target market. Low fare via the internet revolution is now the key. Can't change overnight, or until cost structure changes.
 
usairwaysfan said:
We checked prices two months in advance flying from Rochester to several destinations.

“Discountâ€￾airlines like Jet Blue, Air Tran and Southwest were consistently more expensive than the major airlines.

A round trip ticket to Fort Lauderdale Florida leaving later this month on Southwest cost $400 -- and $326 on Jet Blue. But a ticket on US Airways was under $230. And on Northwest: less than$220.
Since when does Southwest fly to Rochester? Maybe they're pricing trips out of BUF?
 
[However, discount airlines top the list in "Customer Satisfaction." Passengers love Jet Blue's satellite TV and the guarantee of a jet instead of a cramped commuter plane.]

Does ANY one in ccy comprehend this??? :shock:
 
ClueByFour said:
The key is that the LCC's average fare is reasonable. I'll bet if they fly to SJU on a Tuesday and return on a Wednesday, this will become obvious, for instance.

The key to a business like LUV, whom the public thinks is full of nothing but trailer trash heading to see the Mouse is the guys who pay $200 today to fly to MCO, instead of paying $900 on a major.

The other issue is this: LCCs generally have reasonable fares all over their route networks--the majors only beat the LCCs during a sale, or when an LCC comes to town--see PHL.
ROC to SJU leaving 6-1-04 (Tuesday) returning 6-3-04 (Thursday) = prices as of 8:30am cst 5-13-04

US Airways = $527
JetBlue = $200.70 ** there is a roundtrip fare of $133.70 available through their website, just not on those dates

Both of those were found on their respective websites with flight times within an hour of each other.
 
I have to agree with Bob. This would explain how WN can make a profit with a 65% load factor and we can't at 80%. Just how many seats does WN give away at 29.00 versus the 299.00? How many at 99.00? The obviously have the formula down to a science. Yes, they don't gouge you on last minute fares like the Legacy Carriers do, but how many of those cheap seats are really there?

Personally, I think it is unreal that we would undercut a LCC.....and in some instances we under cut them by 100.00! Unreal!
 
The problem with the analysis is that it these prices effect a limited number of seats sold under very restrictive conditions. The probem for the carriers are that there are two kinds of customers. Non-savvy customers dont understand the fare structures at the majors and just go to the discount airlines. Savvy customers understand and will but the cheap seats on US but if those are gone will look elsewhere. The internet makes it way too easy (from the legacy carriers perspective at least) to shop for a good fare. When I plan a trip I will shop around and unless there is some other factor operating will just chose which of my preferred carriers I get the best fare on. So the airline's model breaks down. If I cant get the $200 seat on US, I wont buy the $400 or $600 seat. I will look for a carrier whose fare rules and availability give me a better deal.
 
Exactly. I think more and more, that the so-called 'rapid' change in the pricing dynamics of the industry is less the pretty predictable expansion of the LCC's but more the avalanche of use of the internet creating price transparency. Thus the scenario you present. In fact, the more savvy customers that can use the internet to get a good deal are more likely to be the ones that used to pay the high business fares. The old market dynamics evaporated on the internet.
 
One reason that all airlines lose out on possible revenue is that they all sometimes offer fares that are LESS than I'd be willing to spend. So I pay $198 (sometimes even $138) when I'd be ok with a $300 fare. Problem is, when airlines publish rock-bottom L and N fares, they allow anyone to buy them (as long as the passenger meets the restrictions of the fare) instead of limiting them to the true cheapskates who will not pay $300. I sometimes buy the L and N and the cheapskate (who won't fly if it costs $300) is left staying home because I soaked up the last L or N bargain. The airline in this case is out $300 of revenue (which I would have paid had the L or N been taken by the cheapskate).

So instead of $500 of revenue for 2 pax the airline only gets $200 for one pax. OUCH.

The airline that solves THAT problem is bound to be profitable.
 
The solution would be an auction, right? Have some combination of price and early booking to determine who gets to sit where and what service they get. You'd have varying degrees of comfort in the plane and allow the highest bidders to get the more comfortable seats.
 
RowUnderDCA said:
The solution would be an auction, right? Have some combination of price and early booking to determine who gets to sit where and what service they get. You'd have varying degrees of comfort in the plane and allow the highest bidders to get the more comfortable seats.
Yep. Rather than allow me to ask the airline "how much is the fare?" the airline should be asking me "How much you got?" B)
 
yeah.. stupid customers are the #1 reason why US Airways is heading right into the toilet...
:D :lol: :D :lol: :D :lol:


The Truth:

UAir's friggen costs are too high, and the unions are sucking the company dry..
 

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