Morningstar thumbs down on LCC

[BoeingBoy]

Singleflyer,

Good points - there indeed appears to be some attempt at segmentation taking place in the high-cost seat supply, with US apparently hoping to become a low enough cost provider to become profitable serving the lower revenue fliers (plus the high value passengers who remain).

If DP can get the costs of LCC in line with those of HP (reduce costs more than revenue), the strategy may pay off - though it's worth noting that HP's financial condition wasn't that great before the merger was announced.

One thing for sure - we still have interesting times ahead in this industry. I'm just glad I'll soon be watching it from the outside....

Jim

single,
who says only UA, CO, and AA are chasing high revenue passengers? I don't think any airline has removed their top fares and said they will only carry discount passengers.

WT,

One of us misunderstood singleflyer. I don't think he meant that any airline wouldn't love to sell all their seats at their highest fare, whatever that fare is for a particular carrier.

I think he meand that some legacy airlines seem to be taking steps to broaden their appeal to high-value passengers, while others (LCC) are taking steps in the opposite direction by decreasing the perceived value of the product.

Jim

[Gosh darn it - somehow I got these two posts stuck together and can't unstuck them.....]

 

[Singleflyer]

BB,

You did correctly understand my statement. Some legacy carriers are doing more to attract the higher fare paying passengers.

As of 12/31, I will only be a leasure traveler as well.

WT,

You are right some people might prefer a single class mainline over a multi class RJ. Could you please tell me of a single class mainline that leaves CLT after 5:00 PM and goes to OMA?

So the airline that offers the best value, on the route I need, at the time I need to fly will get my business.

 

[jimntx]

[Gosh darn it - somehow I got these two posts stuck together and can't unstuck them.....]

No, you didn't. It's a new, improved, lemon-freshened, Borax-strengthened feature of the boards. If you respond to two different posts and there is no other intervening response, the system combines your two responses into one.

 

[FWAAA]

If a major were to go under, there might be some reduction in total capacity. But, my gut tells me it would be marginal and temporary.

Well, if the answer to consistently nonprofitable low fares charged by legacies doesn't lie with a reduction in their capacity, exactly what will cure the current ills? I know you're too old and wise to suggest simply staying the course and hoping that fuel comes down in price. Easter Bunnies and Santa aren't part of a viable business plan. 😛

Should legacy airline execs go back for yet another round of concessions from their downtrodden employees? Should they just borrow more money that they have no intention (nor means) of paying back? Should they buy SuperLotto tickets? Should they turn to bank robbery? If capacity reductions among legacies aren't the answer, then what is the solution?

 

[BoeingBoy]

No, you didn't. It's a new, improved, lemon-freshened, Borax-strengthened feature of the boards. If you respond to two different posts and there is no other intervening response, the system combines your two responses into one.

Well, knock me over and call me shorty.....

I can stop trying to correct my "mistake" - tried 4 times on those posts before giving up 😳 .

Thanks for the info.

Jim