Next revenue generating idea

[gaucho99]

Apparently United has increased their change fee to $150 domestic and $250 international. It's being discussed on the United board at flyertalk. I would be surprised if US did not follow suit.

 

[tadjr]

There are already a boat load of tickets that are less than the change fee. Many times its just cheaper to buy a new ticket.
I wouldnt be surprised to see the fee increased as well.

 

[ClueByFour]

This will go over much like Tempe's line of "we don't have corporate contracts anymore." Yes, they do.

I don't pay the current change fee as published to the public, and (for work), I'm not really worried if they jack it up. Fortune 500s who are smart don't pay it, anyway. That tango goes something like this: "Is a couple of hundred 150/250 changes worth an 8 figure contract?" The answer is always an "arrangement."

 

[aredeeyou22]

Apparently United has increased their change fee to $150 domestic and $250 international. It's being discussed on the United board at flyertalk. I would be surprised if US did not follow suit.

Why focus on US? Of course US will follow suit, as they should. And so will NW, DL, CO, AA, etc.... We have a major revenue problem in the industry, not just US, and it's only going to get worse.

 

[trvlr64]

Why focus on US? Of course US will follow suit, as they should. And so will NW, DL, CO, AA, etc.... We have a major revenue problem in the industry, not just US, and it's only going to get worse.

Then place the fares at a reasonable price!! It's just more of the same crap as nickle and diming only at a higher price.

YES we all know that fuel prices have risen. Bread and milk have risen too. Do you see people bitching about having to adjust for these increases. YES and NO. But you have to live with it if you want to get to work and want to eat.

If the fools that run every single airline would just set the fares appropriately people wouldn't have to piss and moan about being overcharged.

You can't be profitable on $200 transcon fights. But since the fools that run the airlines like to entice the customers with excessively low fares ofcourse your going to hear every single b!tch and moan whenever there's a change fee increase or choice seat purchase, etc.

An educated consumer won't b!tch and complain if the fares are reasonable. Plain and simple. Why don't the airline executives know this?

 

[Ignacio]

Additionally US has driven off high yield customers with the poor service and cheap assed attitude.

All American based airlines are cheap assed beyond all reason. All US carriers have the same half assed domestic product.

http://myaviation.net/search/photo_search.php?id=01285573
^ That is service.

 

[sharktooth]

All American based airlines are cheap assed beyond all reason. All US carriers have the same half assed domestic product.

http://myaviation.net/search/photo_search.php?id=01285573
^ That is service.

Excellent service is asking the passenger what they want for a meal, without a menu and then supplying exactly what they asked for, even if they have to kill a duck right there in the galley.(as he sets the goalposts where they need to be)

Everything else descends from there.

Tuna tacos, if we have enough? Pretty close to the anchor part of this rating system.

 

[Travelpro72]

With all due respect I believe comparing foreign airlines and how they are run (some assisted by their government) is really fair. It's like comparing US airlines that fly Asia against the country's respective "flag" carrier.

 

[USFlyer]

In fact the opposite has occurred in that many FF'ers will only fly US now if their personal RASM is below 16 cents.

Then these folks have way too much time on their hands if they are computing this before booking a ticket.

 

[aredeeyou22]

US Airways CASM is right around 16 cents.

My current trip priced out at $404.19 plus taxes.


Total actual mile flown = 5,183


On this trip I generated a RASM of $.0779 per seat mile. Even with $25.00 for a second piece of luggage and a $150.00 change fee, US only raises is RASM to $.1116 per mile, still roughly a nickle less than it costs to fly me.

Nickle and Dime fees or reduction of Frequent Flyer perks are clearly NOT the answer to the revenue/cost imbalance the industry faces.

In fact the opposite has occurred in that many FF'ers will only fly US now if their personal RASM is below 16 cents.

Additionally US has driven off high yield customers with the poor service and cheap assed attitude.

Couple that with the actions of Tempe in cutting frequent flyer benefits which has had the unintended consequence of taking a group of the least price sensitive customers and turning them into frugal flyers. A situation that need not have happened.

I'm perfectly content to fly US in it's current condition as long as I spend less than it costs to fly me. US made their choices and I've made mine. NOTHING about US is premium so why pay a premium?

Who has said anything about paying a premium? Again, airlines in the USA should be able to price their product, which is safe, reliable transportation, without operating at a loss. When market conditions dictate, airlines should be able to raise, or lower the fares, given the market conditions. No?

You say that US has driven off high yield customers with its "cheap assed attitude", and to an extent, I agree. However, I ask again, if these thousands of VFF's that you always speak of have taken their high yielding pocketbooks to other carriers such as AA, DL, and CO, all of which have much larger revenue generating hubs than US, (DFW, ATL, EWR respectively), are we to assume that they will indeed all turn a Q1 profit, and US will be the only money loser? If they don't turn a profit, then indeed they are still not charging enough in overall airfares to cover the cost of operating, right?

If they can't raise fares due to overcapacity, what choice do they have but to continue to try to nickel and dime? A la carte pricing is on its way to an airline near you....

 

[UPNAWAY]

I think the ticket distribution system is as much to fault as anything else. That is why even if just one airline doesn't match the fare increase they all fall apart. That doesn't happen in most other business. If Target charges 5% more for the same product than Walmart they may loose some customers to Walmart but it doesn't mean they stop selling significant % of that item. I think with airfares it does. Plus keep in mind this is a perishable procuct and I bet the time frame to "make or break" a flight is pretty short.

 

[tadjr]

Well, the last Iberia flight I was on (of course it was Spanish Domestic flight BCN-MAD) charged onboard for snacks AND sodas. So if we're comparing domestic to foreign, we have to compare domestic to domestic foreign. Most of the international airlines that are out of this world have some form of govt sponsorship. Not all granted, but check out most that do and thats where they are able to offer services that a free standing non govt sponsored airline cant compete with.

 

[TechBoy]

Overcapicity is BS.

It depends on how you define overcapacity. If you mean "how many seats are being filled by customers" then there is no overcapacity as the typical carrier is filling around 80% of their seats. But that is a very simplistic view of overcapacity. The real analysis should be "how many seats are being filled by customers whose average fare is sufficient to produce a reasonable profit over time" which is a very different question. What is happening today is that the airlines are filling up their overcapacity with marginal customers lured by low fares. While those customers are individually unprofitable, the airline is still better of having their revenue than in flying the empty seats. Until the overcapacity is removed (which is very difficult b/c as the majors reduce capacity, WN, B6, FL and VX will increase theirs), there will be no pricing power in the industry in general (although it will remain in certain markets that do no have low cost competition).

Overcapacity is also a question of costs. At $60-70 oil, the domestic capacity of the majors was looking reasonable 2 years ago and they all made money last year. But at $100+ oil, their costs have risen beyond the point where marginal demand will support price increases. Hence the recent losses reported by the majors. (There is also the problem of overhubbing, but that's another long post.) So I would definitely say that there is currently overcapacity in the domestic market.

 

[USFlyer]

There is definitely over capacity for the reasons TechBoy mentioned. For example, I see folks complain when a PHL-LAX flight is above $250. This flight, with a 2+ week advance purchase, should be no less than $250 each way before tax, not $250 r/t with tax. The price should go up as departure nears, but this is not always the case. I got a DCA-SEA the other day six days in advance for $480. That's a ridiculously low fare for this route, but US is trying to compete and fill the seats.

 

[oldiebutgoody]

I think that LCC should install pay toilets in th airplanes AND terminals, and serve FREE COFFEE!

Man, they'd clean up.