More Fare Nonsense

[Art at ISP]

Well, its time for another trip to BOS for a one day meeting. I would drive, but have to be back on LI early the next morning to take a relative to the doctor.

I call Chairmans for the shuttle, and out the 27th in the morning and returning the 28th in the morning is $628.00 r/t. I check DL, and they have flights as low as $278 round trip, but not at the times I need.

I look at Jet Blue, and their HIGHEST fare is $70 one way...what do you think I am going to have to choose?

At 190 or so miles flying distance, $60 each way is MORE than profitable even at 15 cents a mile.

Well I guess my first ride on an EMB190 will be a little sooner than I thought--and with the wrong paint on the outside........

It's time for the gouging to stop!

 

[qwerty]

Well, its time for another trip to BOS for a one day meeting. I would drive, but have to be back on LI early the next morning to take a relative to the doctor.

I call Chairmans for the shuttle, and out the 27th in the morning and returning the 28th in the morning is $628.00 r/t. I check DL, and they have flights as low as $278 round trip, but not at the times I need.

I look at Jet Blue, and their HIGHEST fare is $70 one way...what do you think I am going to have to choose?

At 190 or so miles flying distance, $60 each way is MORE than profitable even at 15 cents a mile.

Well I guess my first ride on an EMB190 will be a little sooner than I thought--and with the wrong paint on the outside........

It's time for the gouging to stop!

Art, you think maybe there are enough people paying $628 that it simply doesn't make sense to top out fares at $140 ($70 each way), and throw away all the potential revenue? You call it gouging, the airline calls it Economics 101. When B6 starts making an impact, you'll see fares come down.

 

[IMisstheAladdinTrays]

I work the Shuttle a lot...seems like we do a good job selling those $628.00 fares!

 

[732guy]

Art,
Take JetBlue. How can you say you or anyone else is be GOUGED when you have a CHOICE of paying $70? No one is FORCING you or anyone else to take US.

Enjoy the E190 and let us know how the trip goes!!

 

[UPNAWAY]

Well, its time for another trip to BOS for a one day meeting. I would drive, but have to be back on LI early the next morning to take a relative to the doctor.

I call Chairmans for the shuttle, and out the 27th in the morning and returning the 28th in the morning is $628.00 r/t. I check DL, and they have flights as low as $278 round trip, but not at the times I need.

It's time for the gouging to stop!

A few years ago you would have paid $800+ each way I would say the gouging has stopped. By the way from a pure economic standpoint having big variable in pricing is a good thing it helps keep supply in check. And if you needed to make that trip to close a big deal you would be very happy that there seats are available.

 

[Art at ISP]

According to statistics posted elsewhere on these boards, load factors for the shuttle run between 50 and 60% for the most part. They would be higher with RATIONAL fares. $300 r/t would be plenty to insure profit and still provide value. $628 is an outrage, and I am sure fewer and fewer people are paying full fares. With more people flying the burden is spread out--business travelers are tired of subsidizing Ma and Pa Kettle's loser fares.

For what it's worth I just booked Jet Blue--the difference was just too much to justify the shuttle.

And IMiss, I am not sure you know how much people are actually paying....

My best to you all.....

 

[BoeingBoy]

And IMiss, I am not sure you know how much people are actually paying....

My best to you all.....

According to the Consumer AirFare Report for 1Q06 (the latest out), the average one-way fare for the LGA-BOS market was $142.

Assuming Art's $628 R/T fare included taxes/fees, call it an even $600 R/T or $300 O/W. Selling just over 3 $100 O/W tickets for each $300 O/W ticket will get you to that $142 average.

Jim

 

[qwerty]

To your point - does it make sense for the company to push load factors up 20-30 points, while giving everyone a price break (even those who currently pay the full walk up?) Do the math, you net less any way you look at it.

It's not about load factor on the shuttle, or any route for that matter.

I hate to use B Ben's ticket analogy, but do you think its rational to charge $1500 to see a football game? What about an Eagles-Steelers Superbowl?

 

[Barbell]

BoeingBoy's assessment of ~$300 each way is about correct, which is why Art's fare was what it was. The full Y fare (0 restrictions, 0 day AP) is $304 o/w. But to the point that IMiss makes, not all of those people you see are paying that $304 o/w fare. The Shuttle is a unique animal in that people are indeed willing to pay a higher yield, to an extent, and it also thrives on volume of passengers.

While B6 is running considerabely lower fares in these markets, there's a couple of reasons for that fact, and many of them driven by their apparent need to charge drastically lower fares. Consider that B6 can take you to a handful of places outside of the lower 48, and to a limited few destinations at that. That makes their frequent flyer program, by definition, inferior to US. While they have those flashy little TVs in the back of every seat, they don't have a First Class cabin, and while we could argue ad naseum about how USs F product is diminished and fewer upgrades are coming, you will never, never, never receive an upgrade to F on your way to CDG on B6. Period.

Then there's the interesting hinge of schedule v. service. B6 will take Art, and anyone else willing to pay $70, but on a quirky and difficult to follow schedule that runs approximately every 1.5 hours or so. US runs on the hour every hour all week long. That frequency of schedule is of great value to people willing to pay $304. B6 will fly you from JFK, most likely not on schedule, while most NY-area business travelers overwhelmingly prefer LGA. If they didn't, then we wouldn't have so much competition from DL and AA.

Which brings us to the DL fares. DL is in bankruptcy, and has shown time and time again that they still really, really want to put US out of business, and it seems to be part of their exit strategy. In most head-to-head markets w/ DL, they have chosen to undercut many of USs fares in an apparent attempt to raise quick cash. That strategy won't last forever, and I guarantee that you'll see DLs Shuttle fares increase rather dramatically sooner rather than later, which would put USs $304 Y in the "rational" range. Maybe not right this minute, but slow and steady wins the race. Then there's the pesky fact that DL will sometimes fly you on an RJ, or maybe a 37, or perhaps an MD80. Again, the people flying these routes on a regular basis want to know that they are walking onto a nice A319 everytime. The familiarity of it is comforting to them.

So, while it was right of Art, in the best interest of his company to buy the B6 fare, it is also right for US to charge that fare because those are high demand flights that people will pay that fare.

 

[ClueByFour]

Then there's the interesting hinge of schedule v. service. B6 will take Art, and anyone else willing to pay $70, but on a quirky and difficult to follow schedule that runs approximately every 1.5 hours or so. US runs on the hour every hour all week long. That frequency of schedule is of great value to people willing to pay $304. B6 will fly you from JFK, most likely not on schedule, while most NY-area business travelers overwhelmingly prefer LGA. If they didn't, then we wouldn't have so much competition from DL and AA.

You know, you were running okay until this paragraph.

"Quirky and difficult to follow schedule?" With the exception of the shuttles (and UA's former shuttle markets on the west coast), how many routes see hourly service from one carrier? Somehow, people survive.

The notion that flying from JFK is any more or less likely to be on schedule than someone flying from LGA is perhaps the funniest thing I've read here in a very long time. I suppose this assumes that it's pouring rain during the international push out at JFK and somehow sunny and clear at LGA, since that's the only way that notion holds water. And it's not as if NYC business travelers don't know EWR and JFK for anything beyond the perimeter. I suppose you could blame ontime departures on the teething problems with the 190--but US ran that very same problem when the -170 was new.

People on a decent expense account (myself included) might prefer LGA from midtown manhatten. To anyone else, it's really a crapshoot. I've done the B6 shuttle from JFK-BOS and it's really not the end of the world. Absent an upgrade, the product wastes the US product. Even then, for an hour flight, the chance for an upgrade does not justify that difference in fare (when I did it, US wanted $200+ O/W--B6 wanted $59). That covered the car service and more than a few drinks on either end that I missed.

I won't even begin to debate the FFP issue--if that's supposed to be a strength, US trails more than half it's legacy peers.

 

[Art at ISP]

To the point,

I needed the 7AM shuttle one way and the 6AM back--you'd figure the 6am would be wide open with all fares but it wasn't.

Also, to Barbell's point, there is no proof that people are willing to pay the $628 if the AVERAGE is $142 each way, now is there?

I can justify up to $100 extra to fly US, but not $500...there's no VALUE to that proposition.

 

[Bear96]

I look at Jet Blue, and their HIGHEST fare is $70 one way...what do you think I am going to have to choose?

So fly JetBlue and get on with your life already.

 

[RowUnderDCA]

If LCC were selling all seats on the flights you wanted at the jetBlue price, would there have been ANY seat for you on the times you wanted to fly?

 

[US1YFARE]

Barbell has a very good point. The PHL-BOS market has seen dramatic fare increases even though FL's fares have remained lower. This is in large part because US operates hourly flights on the 1/2 hour in both directions. One of the reasons I have continued to fly US on this route is because AMTRAK takes too long to get there, even on the Acela and the service is not as frequent. FL's service to BOS is infrequent as well and not worth me waiting in the airport for a few hours for my flight--by the time I catch the flight, my billable rate more than makes up for the difference. I still think the fare (sometimes around $800) is too high, but I will pay it because of the convenience...obviously, I may think the fare is high, but US is selling seats--I do think that many of the people on the BOS flights purchase in advance and can snag fares in $300 range--I snagged one recently as well, but I have also paid $800 many times. Also, with the $300 fare, I need to pay a change fee if my plans change--more nickel and diming at a fare level that really shouldn't have change fees IMHO. Also, US is putting 75's on some of those BOS flights which limits upgrades even more.

One thing that US may not be considering is the fact that when fares were $300 plus (refundable) to BOS, I was much more likely to jump on a plane and head to BOS because I knew that my client would have no issue paying for that flight; however, when the ticket is $800, my client is more likely to question my desire to fly to BOS to do the work--so, they are probably losing out on some seats--they will still get the "need to be there" customer who needs frequency, but as soon as the travel becomes the least bit discretionary, they will lose out. I would fly to take some clients to dinner or out to lunch when the fares were lower, now I limit that since the fares have increased. Also, even if I can get a lower fare, change fees are involved and usually my trips to BOS can result in either a later or earlier than scheduled departure, so now we are talking an additional $25 or $100 plus in some instances--and the upgrade is very uncertain (so, I could end up in Y as Art will be on JB--although, Art will be watching TV in his Y seat).

My other problem is that US represents itself as a Low Cost, Low Fare Carrier (many signs tell the customers that they are LOW FARE), so it is just a bunch of BS on their part.

I think the bigger problem US has is that it sells extremely high fares comparable to UA on longer haul flights without the level of service provided on those flights (FC v. FC--not Y), and UA's schedule is either as convenient, or nearly as convenient as US. You see, if I need to get to BOS from PHL...I need to get there quickly and when I want to go, but on a transcon, I usually have the luxury of taking a connection or taking a flight that may be less preferable. It is a sliding scale and it seems that US may be once again sliding itself off of the scale.

 

[qwerty]

You all have price points which dictate wether or not you'll fly, just understand there are people out there with different benchmarks. Believe it or not, a lot of pax pay $304 for the shuttle (and even $500+ from CHS). When they stop paying those fares, you'll see them come down.

Sure you can fill a plane at $70, or even the average fare of $142 - but why would you?