More low fares

[JayBrian]

Airline Releases Another Wave of Fare Reductions of Up to 55 Percent to Nearly 20 Additional Markets

 

[Harry Callahan]

I guess they are looking at how to loose more money so they can cut employee pay again.

 

[TheNewLowFare]

Southwest offers low fares, but they don't cut their pay. America West is the only airline that can go head to head with SWA and we have proven that we can compete. Why are you so negative??? Give the company a chance! We can't call ourselves LCC if we don't offer low fare! Geez! :angry:

 

[Flying Titan]

I guess they are looking at how to loose more money so they can cut employee pay again.

Gee, those $1100 roundtrips for a 300 mile flight have worked out so well up to now!

 

[BoeingBoy]

Actually, if you look at the yield those fares provide they're not exactly low fares. The east coast fares are 15 cents per mile and up - not exactly WN levels. Those are the type of bottom end fare folks like Art have been saying US should have had all along - about or slightly above breakeven for the old US cost structure. Perhaps if we'd have had this as the low end of the fare structure for the last couple of years we wouldn't have had to offer as many "fire sale fares" at 3 to 4 cents a mile just to get people on the planes.

Only the CLT-SEA is low fare at something over 6 cents per mile.

Jim

 

[rjh]

Southwest offers low fares, but they don't cut their pay. America West is the only airline that can go head to head with SWA and we have proven that we can compete. Why are you so negative??? Give the company a chance! We can't call ourselves LCC if we don't offer low fare! Geez! :angry:

Some people will always complain no matter what happens.

 

[TheWatcher]

Southwest offers low fares, but they don't cut their pay. America West is the only airline that can go head to head with SWA and we have proven that we can compete.

Continental have been competing with SWA in Houston for years and have done so very successfully without downgrading the service. SWA no longer has a presence at IAH choosing instead to focus attention on HOU and markets in US Airways territory. Hopefully your game plan at US will be successful against them and other competitors.

 

[TheNewLowFare]

Hopefully your game plan at US will be successful against them and other competitors.

Well it has worked so far. Doug made HP profitable didn't he?

 

[SpinDoc]

Way back when before oil went nuts I sat in a room in CCY and heard BBB tell us that if he could raise fares $20 at the bottom end he could lower the top fare by $300 and be "revenue neutral" US was in fact experimenting with these types of pricing models during both BK's.

Bob:

This revenue model is what HP has been following since 9-11 in all markets where they have direct competition from WN or other LCC's. It's only natural that US East will follow sooner or later in most markets, including the fortress in CLT. Yes, Virginia, WN will eventually come to CLT, and if they don't, Air Tran will make enough noise with their lower fares to make US play the game.

It makes good business sense to charge a little more for the lowest fare (and offer less seats in the rock bottom fare buckets in a given market - a WN tradition) and capture a higher percentage of the middle market at $179 each way, as well as last minute market with maximum Y fares of $399 in each market. That's the beauty of having semi-affordable O/W fares in every market, you can give away a 21 day advance O/W fare for $79 along with a mid-market return fare of $179 and still make the customer believe they got a bargain (another WN tradition). The WN philosophy on fares generates higher revenue overall, because more people will purchase at the mid-price point, thereby eliminating the need to give away round trip 21 day advance tickets for less than cost.

In the past, US has offered 10 last minute Y fares on each flight at $800 O/W, but how many of those seats were actually sold? Probably less than half, or about $4000 worth. If US can sell all 10 at $399, they're bringing in roughly the same revenue, and creating market share and customer satisfaction for the business traveler who can earn miles and upgrade on those last minute fares.

It's all a shell game, but the carrier that plays the game the best, and gives the customer something they believe is valuable without gouging them, that player is going to win the game in the long run. All LCC has to do is outlast WN and their ever increasing cost base, and in 10 years, the tables will turn.

 

[Barbell]

Bingo on all 3 points.

And Spin Doc is spot-on, as well, with one tiny exception. HP was the first (although DL got all the press) to revamp fares in all markets, not just on WN/other LCC markets. It was the spot-matching policy on those markets that put HP in a very similar position to US pre-9/11 (remember BLOW Fares?).

The opening of the post-9/11 financial markets gave HP the cash-cushion to roll out the bold experiment that worked. And now the combined carrier is in a much similar situation with the merger-enhanced 2bil.

 

[TheWatcher]

Well it has worked so far. Doug made HP profitable didn't he?

Whats the number of business fliers in the AWA service area compared to that of US in the N.E.? Total different arena.

 

[MarkMyWords]

I guess they are looking at how to loose more money so they can cut employee pay again.

Guess you missed this quote from the article.

"An overwhelmingly positive response from our customers and a positive revenue impact for the airline has prompted us to continue spreading our consumer-friendly pricing structure across even more of our network,"

If there was a negative revenue impact, then these fares would not have been rolled out.

 

[PITbull]

Well it has worked so far. Doug made HP profitable didn't he?

$13 million first quarter of 2005 was hardly a profit. U profited $37 million second quarter 2003 (after emergence from BK #1) and gave the employees back their 5% war deferral. Obviously, this profit didn't thwart more employee concessions and another round on the merry BK ride.

Obviously, it didn't mean jack squat with oil profits still too high for anyone's comfort.

Doug's business plan called for $50 barrel fuel to see any profit. LCC can't live off investor money for infinity...it just buys some time. And approving Exec pay raises upon emergence from bk only breeds bad employee sentiment.

Some airline regulation is needed, otherwise, there most likely will be more major catastrophic adjustments in the horizon.

 

[barbeetantrums]

Southwest offers low fares, but they don't cut their pay. America West is the only airline that can go head to head with SWA and we have proven that we can compete. Why are you so negative??? Give the company a chance! We can't call ourselves LCC if we don't offer low fare! Geez! :angry:

They complained the fares were too high. Now they complain the fares are too low. They would find reason to be bitter about a sunny day. They'll never be happy. More poison in the well.

 

[Non Rever]

Good Grief Charlie Brown, look at these date retrictions!!

Travel is not valid March 2006, 10, 12, 16, 17 - 20, 23 - 27; April 2006, 2, 7 - 9, 13 - 17, 23, 30; May 2006, 14, 18, 19, 21, 25, 26, 29; June 2006, 4, 8, 9, 11, 15, 16, 18, 22 - 26, 29, 30; July 2006, 1, 5, 9, 13, 14, 16, 17, 20, 21, 23, 27, 28, 30, 31; August 2006, 6, 13, 20; October 2006, 15, 22; November 2006, 12, 22, 26, 27; and December 2006, 21, 22, 23, 26 - 31.