This was in yesterday's CLT Observer. Thought it was interesting.
Posted on Mon, Feb. 09, 2004
FARE GUY
Low-cost carriers not always cheaper
Sometimes, they charge more than the big competitors
TED REED
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.
Ted
Reed
Posted on Mon, Feb. 09, 2004
FARE GUY
Low-cost carriers not always cheaper
Sometimes, they charge more than the big competitors
TED REED
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.
Ted
Reed