Lcc Not Always Cheaper


Dec 29, 2002
This was in yesterday's CLT Observer. Thought it was interesting.

Posted on Mon, Feb. 09, 2004

Low-cost carriers not always cheaper
Sometimes, they charge more than the big competitors

Sometimes people love low-fare carriers so much that they don't even care if those airlines' fares are, in fact, low.

A recent report by consulting firm Unisys R2A shows Southwest regularly charges more than US Airways in some markets, even though US Airways thinks of itself as a premium airline with more services.

The report compared fares in markets where both airlines offer nonstop or one-stop service. In short haul markets, up to about 700 miles, "Southwest is generally able to charge slightly higher average fares," the report said.

US Airways says it's well aware that Southwest sometimes charges more. Last week, the airline identified several markets where its fares were lower than Southwest's.

Between Las Vegas and Orlando, Fla., the regular, nonsale 14-day advance fare with no Saturday night stay requirement, was $260 on US Airways and $318 on Southwest.

Between Kansas City, Mo., and Raleigh/Durham, both airlines charged $154 for a 21-day advance fare with no Saturday night stay. Between New Orleans and New York (La Guardia for US Airways, Islip for Southwest), US Airways charged $198 and Southwest charged $310.

In a speech last year, US Airways Chief Executive David Siegel said a Transportation Department study showed that people will pay extra to fly on low-fare carriers -- more than 15 percent more to fly Jet Blue from New York to Florida than to take Delta, "with all of its amenities, its frequent flier program, access to airport lounges, branded credit cards, international alliances and meal service."

The reason, Siegel said, is "customers are getting more of what they want -- be it seatback TVs, simpler fares, new planes, overall a better travel experience -- on the low-cost carrier." He added: "The implications are unsettling."

On Southwest, the highest one-way fare in any market is $299, while the average one-way fare is $87.42, said spokeswoman Brandy King. "I can't tell you we're always going to have the lowest fare," she said. "But the majority of the time, you will find a lower fare on us."

Jet Blue Airways spokesman Todd Burke said the airline initially attracts customers with low fares, leather seats, free satellite TV and other amenities, but keeps them because of good customer service.

"Even if in a particular circumstance (our fares) are higher, people fly with us because we treat them like human beings," he said.

Don Garvett, vice president of planning and revenue management for Alaska Airlines, said the perception that a carrier has low fares is the key. He said Alaska has learned it cannot just match a low-fare airline's prices; it must also maintain an image of competitiveness.

"The customer doesn't just buy the product," Garvett said. "The customers buy what they perceive the product is.

"The reality has to be there, but also the perception has to match the reality," he said.

Jet Blue jets

Speaking of Jet Blue, the carrier will have a ceremony today near Sao Paulo, as Brazilian manufacturer Embraer launches the manufacturing of its new, 100-seat regional jet. The carrier may buy as many as 200 planes.

This is important because Jet Blue plans to fly the new jets between Charlotte and New York's Kennedy International Airport. The airline told the Observer in June that service could begin in 2005 or 2006; spokesman Burke told Fare Guy last week that timetable remains in place.

Charlotte is on a list of 38 markets that Jet Blue likes, Burke said. Charleston, Columbia, Greenville-Spartanburg, Greensboro and Raleigh/Durham are also on the list, with roughly the same timetable that Charlotte has.

The first of the Embraer jets is to begin flying in August 2005. The planes will have no middle seats and a "double bubble" so that tall passengers don't have to stoop to get into the window seats, which they often do in regional jets. They will also offer live television and XM satellite radio.

"We expect this (plane) will open up a lot of small- to mid-sized markets where it makes sense to fly," Burke said. "We'll be expanding to a lot of them in 2005, 2006 and beyond."

Bereavement fares

After last week's column on bereavement fares, Waxhaw reader Mark Selleck wrote that when his mother-in-law died two years ago in Florida, airlines refused to sell a one-way bereavement fare. He wanted to drive back with his wife and children, who were already there. Instead, he drove down, and the family returned in two cars.

"I was a little upset that the airlines wouldn't even consider the situation and make an exception," Selleck said.

Reader Aloijs Vanderriet of Monroe wrote that US Airways gave him a steep discount on a flight to Amsterdam for a same-day departure after his father died. The posted fares were $2,500 to $2,600, but two airlines offered bereavement discounts of $1,000 per person, while US Airways offered $1,800 discounts. US Airways also did not charge extra when he changed the return date.


Maybe if U took some of the money from the concessions and pumped it into some marketing techniques mirrored after WN.....U would post a profit...just a thought ;)
LLC's are cheaper West of the Mississippi, because USAirways doesn't fly there............ The National Bowling Tournament is Reno this year and will go from
February 14th-June 27th Daily. How many people will U be carrying into RNO? Zero, we don't fly there any more.........
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As has been said on these boards previously by many people is it is all about perceptions and expectations. LUV sets their customers perceptions low and continually exceeds them and has done such a good job marketing themselves as a low fare carrier the customers don't expect any frills when they step on the concourse. I'm not saying they're not a good airline because I think they are and their customer service isn't any better or worse than any of the legacy carriers. The thing that sets them apart is the way they have marketed themselves over the long term. The pax doesn't expect much and when they get more than what they expected all of a sudden LUV is a darling. U's marketing department has been absent for years and it still looks like it's in the doldrums.
The fix for this airline is multipronged and one of those prongs should be to get the marketing department to get out and get busy. It's long overdue and unfortunately it may in fact be too late.
This is the stuff that is crazy. US is obviously still chasing the "market share leader" title by trying to "out-southwest" southwest.

Interesting to me that Siegle says:

The reason, Siegel said, is "customers are getting more of what they want -- be it seatback TVs, simpler fares, new planes, overall a better travel experience -- on the low-cost carrier."

But he apparently hasn't heeded that many might want "simpler fares". A lot of folks on these boards have said "simpler fares", but apparently that falls on deaf ears. So...they keep a complicated fare structure, load the fares with restrictions and penalties, then undercut the LCC to maintain the coveted "market share". And they still try to rape the last minute traveller with a sky-high fare. Oh...and they tell the employees they need even more in the way of concessions.

So if anybody who has Mr. Siegles's ear, I'll type this slowly. I like US. I fly them when I can. But if I'm going somewhere served by Southwest and US, I'll book Southwest - even if it's a few dollars more. Here's why - they won't penalize me if my plans change. If something crops up at the last minute and I have to stay longer, I only pay the difference between the one way fare I paid and the full one way fare. And....this is important...the fare difference isn't all that great. Especially when considering that to make a change on US, I have to pay a $100 change fee, on top of any fare difference. It's called "value". THAT is more important to me than a TV set. Pay your employees and let them provide the service. Work with your fares and you might be surprised to see the impact on your bottom line.
Wouldn't it be interesting if one of the Philly Papers ran an Article like this....
Obviously that's all I hear these days going through the airport....OHHH SOUTHWEST IS COMING !!!!! :rolleyes: WHHHOOOPPPIIII

Guess the Readers in Philly and surrounding areas would find this VERY INTERESTING !!!

ONE More thing, Don't forget that airlines only have so many seats available for that $99.00 fare... Most people see those signs and then are very disappointed when they go to book it only to find out that that price range has been SOLD OUT !!! ;)