WorldTraveler
Corn Field
- Dec 5, 2003
- 21,709
- 10,721
ah, yes, except you fail to note that WN is just about the only airline that doesn't charge ancillary fees.I know, they're probably not current DL customers. But once DL loyalists start discovering things like how easy connecting is from a big jet to a big jet (no RJ's to get stuck on), and the benefit of tickets that are reusable without change fees that are higher than the value of the ticket, no first or second checked bag fees....
As the topic title says, it's just a matter of time...
And yes, I'm sure DL will find a way to compete. They always do. They didn't really need the $952M they brought in during 2010 from change fees or bag fees...
Oh, wait. They did. Without it, they would have had a ~$400M loss for 2010...
I know, not all of that would be in markets where they compete with WN, but losing out on just half the ancillary revenue would have almost wiped out their 2010 profitability.
Throw in a little erosion, and it won't be all rainbows and unicorns like some have prognosticated...
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And of course you do realize who does, don't you? But of course FL. And you do realize that just means that WN will have to figure out not only how to bring FL's average fares up to the level of WN's - about 15% - but they also have to figure out how to generate the revenue to cover the ancillary fees that WN will lose when FL's pricing structure is replaced by WN's.
I don't suppose you have the number for how much FL would have lost without its ancillary fees... IIRC their profits have been a tad thin of late.
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Which might also explain why WN is in no hurry to wipe out the FL franchise without first figuring out how to generate a whole lot more revenue than they currently get from FL.
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And you might have missed that DL said in its most recent earnings call that DL's ancillary fee revenue was down because more and more customers are qualifying for exceptions that waive some of these fees, including baggage fees.
Yet, remarkably, DL also managed to post the best domestic RASM growth of the network carriers plus at least WN.... so apparently, DL's passenger revenue is growing enough that they are comfortable to waive baggage fees for those people who are helping DL generate the industry's highest domestic revenues.
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Oh, and have you been in Atlanta any time recently? If you have you COULD NOT escape the gazillions of Gold Amex Skymiles billboards plastered all over the city. Either Atlantans are really dense forcing DL to repeat the message so many times or there will be no one left in the state of Georgia who will be paying DL's bag fees when it's all said and done...
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So, yeah, DL probably will figure out a way to compete.... and WN will take its good sweet time sticking its toes in the water... while DL further ramps up its schedule, neutralizes whatever advantages WN MIGHT have had, and in fact provides ATL with the superior product including a FC cabin and assigned seating that Atlantans actually liked and which WN is taking away.
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which means the land of pixies might be reserved for those who dream of the day when at least one other airline has hubs that fall to the competitive forces of WN, in some small hope that if it wasn't just one AAirline, then it isn't just one bad mAAnagement team in the industry.