Marketing MIA

[CSSUP]

This paper is a Gannett Newspaper so I am sure they could pick up wire services. It may be that the paper prints articals from the businesses that have contact with them. As sales people from USAirways rarely if ever visit the area, my guess is the paper does not remember we are local and should be covered.

The customers that fly US seem to love us. I just do not see how we are getting any new customers locally with how low a profile we have in the area. As they say out of sight out of mind.

 

[BillLumbergh]

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On 4/3/2003 710 PM TomBascom wrote:

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On 4/3/2003 4:30:19 AM BillLumbergh wrote:

We''re way, way off topic and need to return to the topic at hand.

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Hunh? The topic is marketing being "mia". What could be more on topic than a discussion of one the main elements of marketing?

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The concern was that the debate between two posters had moved past marketing and was more on the lines of "You''re not an employee, so you can''t possibly care about the airline (employees)".

 

[X-U]

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On 4/3/2003 7:23:37 PM TomBascom wrote:

X-U said:

... While you may think a FF program is cost neutral, it is not. Extra resources means extra costs for all of the perks like dedicated reservations, check-in, Dividend Miles account administration etc...
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I know it''s unfashionable but if you''re going to go into the costs don''t forget to look into the revenues -- among other things US Airways sells miles to it''s partners. FF programs are actually quite profitable. Ask our buddy Ben. They aren''t a burden on the airline at all (think about those costs and "perks" for a few minutes while you''re at it -- are they really that big a deal? I didn''t think so...)

To give you an idea of how profitable -- Air Canada just lost their deal to sell off 30% of Aeroplan for about $100M -- monetizing DM might be something the boys in CCY ought to consider now that the bankruptcy is behind them...

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On 4/3/2003 7:23:37 PM TomBascom wrote:

X-U said:

... While you may think a FF program is cost neutral, it is not. Extra resources means extra costs for all of the perks like dedicated reservations, check-in, Dividend Miles account administration etc...
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I know it''s unfashionable but if you''re going to go into the costs don''t forget to look into the revenues -- among other things US Airways sells miles to it''s partners. FF programs are actually quite profitable. Ask our buddy Ben. They aren''t a burden on the airline at all (think about those costs and "perks" for a few minutes while you''re at it -- are they really that big a deal? I didn''t think so...)

To give you an idea of how profitable -- Air Canada just lost their deal to sell off 30% of Aeroplan for about $100M -- monetizing DM might be something the boys in CCY ought to consider now that the bankruptcy is behind them...

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It seems this discussion has been deemed appropriate to this thread, so I will reply. I have no experience as an accountant for any airline, so I used the figure that was presented, 2 cents per mile. A quick browse through the internet yielded a similar result, 1.7 cents, but one source stated it depended on how the award was claimed, the cost could be anywhere between 1 and 9 cents per mile. With all of the restructuring US Airways just went through, they lowered their CASM by about 2 cents, so while it sounds insignificant, but it adds up over the course of hundreds of thousands of seat-miles. That being said, I really don''t have a problem with a Frequent Flyer program per se, it''s awarding miles for low-yield tickets that I disagree with. This was Baldanza''s original proposal, but the guy has no tact or customer service skills. I will also add, once again, that I agree that the fare structure needs to be simplified. The lowest fare should have the most restrictions, including no FF miles; proceeding up to the highest fare, no restrictions and most benefits. Furthermore, the highest fares need to be significantly reduced. If LUV has a 7 cent per seat mile cost and U has 10 cents, on a 500 mile flight U should make a profit with fares $15 above LUV (500x.03). If you respond, I will read your message, but I will not reply further. This discussion here and elsewhere on this forum attracts only a small group, and we all know each others'' position. In regards to the profitability of a Frequent Fler program, if it''s so profitable, why would you sell it off?

 

[UFO]

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On 4/3/2003 9:41:38 PM PineyBob wrote:


Well CSSUP maybe you just did more to help promote US Airways than you know. We know management lurks here, if only to harass PITbull but you have brought a situation to their attention that they can easily address through US''s corparate communications department can take steps to rectify.

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Bob,

Just want to thank you for your continuing support of U, and your willingness to openly discuss and debate the myriad of challenges facing the airline and employees. Hope to have you on my flights.

 

[TomBascom]

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On 4/4/2003 806 AM X-U wrote:
It seems this discussion has been deemed appropriate to this thread, so I will reply. I have no experience as an accountant for any airline, so I used the figure that was presented, 2 cents per mile.
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Quite some time ago there was a lively discussion of the true cost to fill an empty seat. The most believable figure from my POV was down in the $20 range. That should be pretty close to the true cost of an award ticket since the goal of capacity controls is to never pass up a revenue opportunity.

The value that you and PineyBob are referring to is the value that a customer might place on such a ticket if they compare it to buying a ticket -- that''s a very different number from what is on the books.

Somewhere on the books there is a liability that US carries for outstanding FF miles. As I recall it''s way under $0.02/mile. If someone can find the data and correct me (or back me up) that would be interesting and I''ll try not to lose it

There was also some interesting data in the contract between US & MCI which was revealed when one or the other of them went to court to over-turn the marketing agreement between the two.

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In regards to the profitability of a Frequent Fler program, if it''s so profitable, why would you sell it off?
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To raise cash for other purposes. Sort of like selling planes
and then leasing them back.