Lcc's Don't Always Win
- Thread starter The Ronin
- Start date
Well DELTA protected their home turf like it was the most important to them and B6 learnt the lesson that it is easier operating flights outside the majors hub airports and I believe that they will think twice about going into DFW, ORD and NW major hub after that experience.
The Ronin,
Thanks for the article.
Now read my fingers! I agree with you. Can you beleive it?
In a healthy market large carriers would never let a lcc get their foot in the door without a fight.
I will reiterate my point from prior posts. Airlines have no clue how to fix the problem. Therefore, Lcc's within the big airline.
The DO SOMETHING, EVEN IF IT IS WRONG! IS GOING STRONG.
Thanks for the article.
Now read my fingers! I agree with you. Can you beleive it?
In a healthy market large carriers would never let a lcc get their foot in the door without a fight.
I will reiterate my point from prior posts. Airlines have no clue how to fix the problem. Therefore, Lcc's within the big airline.
The DO SOMETHING, EVEN IF IT IS WRONG! IS GOING STRONG.
BonanzaAir
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HELLO!
Airtran is still in that market to stay. Expect Airtran to go to 3 flights ATL-LAX when 737's come online late 04.
JBLU just didn't expect the Airtran-Ryan wet lease deal and DAL flooding the market with seats.
DAL has won nothing. Again - Airtran is the ATL-West coast market to stay.
Bonanza
Airtran is still in that market to stay. Expect Airtran to go to 3 flights ATL-LAX when 737's come online late 04.
JBLU just didn't expect the Airtran-Ryan wet lease deal and DAL flooding the market with seats.
DAL has won nothing. Again - Airtran is the ATL-West coast market to stay.
Bonanza
Bonanza Delta has won alot by doing this since they have one less LCC to deal with in ATL. They have already accepted Airtran but both Airtran and Delta were not going to let B6 come in and futher drive yields down the toilet. Futhermore getting the rid of the now will save them from getting bigger headaces when B6 may have started expanding there in the future.BonanzaAir said:
BonanzaAir
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Agreed...B6 had to be stopped...in all, Neeleman was asking for the licking that he got. He just didn't plan on the FL/Ryan wet lease.
Good to hear that DAL has accepted FL...lord knows DAL's thrown everything legal at FL already - and still DAL is losing money.
Bonanza
Good to hear that DAL has accepted FL...lord knows DAL's thrown everything legal at FL already - and still DAL is losing money.
Bonanza
Are you suggesting that major carriers should, or do, price under cost to drive new entrants out? Otherwise, LCCs should be able to stay in the market based on a sustainable competitive advantage by addressing a price sensitive segment of the market with lower fares.Andre1980 said:
KCFlyer
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The big boys could nip a lot of it in the bud by doing one thing the LCC's already do - value price. Only a few fare levels, usually based one way, not always the lowest, but never the highest. Instead the big boys respond by losing money, or, implenting some inane "airline within an airline" concept.Segue said:
I've been a proponent for value pricing for some time, but it's always shot down with "that would never work". It seems to work for the LCC's - and if I may point out, nothing else the majors have tried has seemed to work very well either. So why not give it a try. Yes, they tried it on "select routes"...do it system wide. From your biggest hubs. Then, when an LCC moves in, they either lose the money in undercutting your prices, or take the market where their flights are more convenient. Your current customers would have no reason to fly them, outside of some hatred of service, - and you still are able to make money without giving away the farm to woo back customers who left because they'd been screwed over in the past. JMHO.
KCFlyer
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Yes and no. He tried value pricing - Northwest launched a super de duper, lets-lose-money-out-the-ying-yang fare sale, and Crandall decided to "teach them a lesson" by beating THOSE fares out of MSP. Had his ego not gotten in the way, and he left well enough alone, NWA would have come around and the industry wouldn't be in the sad shape it is today.Segue said:
That's the problem...when something is implemented to improve BUSINESS revenues, the airlines launch an all out assault for those ever-so-valuable "priceline" flyers. Go figure.
Are you suggesting that the 'lcc's' don't price below costs to capture a market? Are you suggesting that certain LCC's who currently have short term costs that are extremely low, and not sustainable (do to future labor costs and mx costs), don't themselves price based on the current price structure to "get traction"? Do you think it's possible that airlines intentionally serve markets that will never be, in and of themselves, profitable because of the value they bring to the network?Segue said:
I was not suggesting anything - just asking a question - how does a major "fight" an LCC?Busdrvr said:
Yes, the majors probably service markets based on "beyond profitability", but my guess would be that LCCs don't think that way and insist that every market be profitable on a stand alone basis - hence JetBlue can choose to pull out of a market if it thinks it does not.
As for LCCs engaging in predatory pricing, I've never heard about it. I did come accross some studies that showed majors did it.
