No low-fare rival? You pay

[Paul]

Travelers who use Philadelphia International Airport have grown accustomed to finding rock-bottom fares available at the last minute to many cities since Southwest Airlines landed here in May 2004.

But for a ticket to Buffalo, Cincinnati, Detroit or dozens of other places without low-fare competition, round-trip prices are throwbacks to the 1990s: Philadelphia to Detroit, $1,060; Philadelphia to Buffalo, $1,049; Philadelphia to Cincinnati, $1,220.

The Inquirer examined fares available for flights to 30 cities from Philadelphia using Orbitz.com, an Internet travel site, and US Airways' Web site.

Since its merger with America West Airlines five months ago, US Airways has set a goal of being the nation's largest low-cost carrier, and airline officials say they are trying to do that route by route.

Since the first of the year, US Airways has lowered by 50 percent or more one type of nonrefundable fare, which requires a 21-day advance purchase but no Saturday night stay, between Philadelphia and 14 small and mid-size Eastern cities. For example, it costs less than $200 round-trip to fly to Pittsburgh on a weekday, compared with $600 a year ago.

Philadelphia Inquirer

 

[jimcfs]

But for a ticket to Buffalo, Cincinnati, Detroit or dozens of other places without low-fare competition, round-trip prices are throwbacks to the 1990s: Philadelphia to Detroit, $1,060; Philadelphia to Buffalo, $1,049; Philadelphia to Cincinnati, $1,220.


Philadelphia Inquirer

As we at FFOCUS already know, "BloFares" are still in the system.

Terry Trippler of cheapseats.com says in the article (putting through the plain talk translator) that the "new" US wants to get a fare system somewhere between "GoFares" and "BloFares". 'US Airways "is trying to redefine what we think of as a low-cost airline," Trippler said. "It's not more $29 fares, but more $198 fares... . If anybody's waiting for US Airways to be Southwest, it won't happen. And if anybody's waiting for US Airways to be like it used to be, it won't happen. It's going to fall somewhere in the middle." '

Guess we'll have to wait and see.

 

[bigman60]

"Since its merger with America West Airlines five months ago, US Airways has set a goal of being the nation's largest low-cost carrier, and airline officials say they are trying to do that route by route."

For the longest time I was confused by the low-cost carrier moniker. Independence Air was roundly considered an lcc, but they had an operating margin of -120% one quarter and a 17.1 cent CASM (roughly on both accounts), so I didn't understand how exactly they were low cost. Then someone tells me to look at it from the POV of the passenger and it made more sense.

In my book, Independence Air was a low-fare carrier, but with high costs. The way I view US/HP is that they are on their way to becoming both an lcc and an lfc, which in the medium-term should benefit the investors, the customers and to some extent the employees. In the long-term I still see BK3, but that has more to do with the weakness of LCC's hubs compared to the competition and the potential mergers out there.

 

[gso-crew]

If Southwest served smaller markets and didn't cherry pick just a few prime markets their fares would have a wider range also.

 

[sfb]

If Southwest served smaller markets and didn't cherry pick just a few prime markets their fares would have a wider range also.

Since when are MHT, PVD, ISP, ALB, BUF, SDF, BHM, MAF, LBB, AMA, ELP, HRL, CRP, TUS, BOI, JAN, LIT, OKC, TUL, GEG, OMA, or ORF "prime markets"? Many of the "prime markets" they serve are so heavy precisely because Southwest is serving them with low fares. BWI-PVD went from 175 daily passengers to over 1600 daily passengers in just one year. MHT had an even more dramatic increase, from about 27 daily passengers to over 1200 in one year.

 

[john john]

They have a VERY simple product and business modeal that makes it easy for employees to understand and implement consistantly. They are a fierce and crafty competitor who contrary to popular belief is almost NEVER the lowest fare or the most convienient. flights with connections like MSY-MDW-PHL for example are common. They market the heck out of the cheapy fares and have the public convinced that no one is cheaper.

NO RJ's or EXPRESS KEPT IT SIMPLE

 

[bigman60]

Since when are MHT, PVD, ISP, ALB, BUF, SDF, BHM, MAF, LBB, AMA, ELP, HRL, CRP, TUS, BOI, JAN, LIT, OKC, TUL, GEG, OMA, or ORF "prime markets"?

Come on, most of these non-prime markets are just there because of the way WN grew up for the following reasons:

1) WN only served Texas until regulation so you have towns like ELP, HRL and AMA

2) The Wright amendment restricts flying from DAL to certain states so you have JAN, LIT, TUL

3) The acquisition of Muse Air brought smaller stations like GEG and BOI into the fold.

4) MHT, PVD, ISP, ORF, ALB are all 1M+, previously underserved markets where WN saw opportunity and took it.

Do you really think WN would enter any of these smaller towns in Texas today? When their last 4 added citites were PIT, PHL, RSW and DEN can you please tell me where they are adding 'non-prime' markets? Yes they are stuck with some crappy stations, where I'm sure they have a ridiculous, profitable market share, but if WN was starting today there is no way CRP makes the start-up list.

 

[sfb]

Come on, most of these non-prime markets are just there because of the way WN grew up for the following reasons:

1) WN only served Texas until regulation so you have towns like ELP, HRL and AMA

But if they didn't find those markets to be valuable to their route system, they'd end service.

2) The Wright amendment restricts flying from DAL to certain states so you have JAN, LIT, TUL

Neither JAN nor BHM is served directly from DAL, and both were added before the Shelby Amendment loosened the Wright restrictions.

3) The acquisition of Muse Air brought smaller stations like GEG and BOI into the fold.

A minor point, but it was Morris, and a number of Morris stations were closed, like FAT, ANC, EUG, COS, IFP, and DEN. Obviously there was some value in some of the smaller stations.

4) MHT, PVD, ISP, ORF, ALB are all 1M+, previously underserved markets where WN saw opportunity and took it.

Absolutely; that was part of my point. All of those cities saw relatively little service (and what they had was horribly expensive) and Southwest came in and stimulated the heck out of them.

Do you really think WN would enter any of these smaller towns in Texas today? When their last 4 added citites were PIT, PHL, RSW and DEN can you please tell me where they are adding 'non-prime' markets? Yes they are stuck with some crappy stations, where I'm sure they have a ridiculous, profitable market share, but if WN was starting today there is no way CRP makes the start-up list.

Some of the smaller Texas cities would be off the list for a variety of reasons -- things like the speed limit being 70 mph and the improvements made by TxDOT since the 1970's. HOU-AUS isn't the four-plus hour drive on two-lane U.S. 290 (or I-10 & SH 71) that it used to be, and it probably wouldn't be started today. Times change and the business changes as well.

They're still not in BOS or LGA or EWR or DCA or ATL or MSP or CVG or CLT -- airports that are all touted as "prime markets" that Southwest doesn't serve. And certainly many of the markets they chose to add from PHL (PVD, MHT, BDL, RDU, JAX) were not huge before the prices dropped.

 

[john john]

4) MHT, PVD, ISP, ORF, ALB are all 1M+, previously underserved markets where WN saw opportunity and took it.

Absolutely; that was part of my point. All of those cities saw relatively little service (and what they had was horribly expensive) and Southwest came in and stimulated the heck out of them.

Previously underserved markets because past management had the market share and let it go (Down size to much)

 

[LCC_#1]

I am sick and tired of the bitching and whinning about US Airways and high prices. Let's look at the dominate SWA markets. If you think SWA doesn't take advantage of being the dominate carrier, you need to get off the crack pipe. Justify it ALL you want. I LONGER WANT YOU!! NOW PAINT ME THE BAD GUY!! I COULD GIVE A good G.D.!!!@ :down: :down: :down: :down: :down: :down: GO!! Buh, Bye!!

 

[ELP_WN_Psgr]

I am sick and tired of the bitching and whinning about US Airways and high prices. Let's look at the dominate SWA markets. If you think SWA doesn't take advantage of being the dominate carrier, you need to get off the crack pipe. Justify it ALL you want. I LONGER WANT YOU!! NOW PAINT ME THE BAD GUY!! I COULD GIVE A good G.D.!!!@ :down: :down: :down: :down: :down: :down: GO!! Buh, Bye!!

LCC#1:

Piney Bob called you out and I am going to echo his challenge.

Come back and show us the walk up fares in markets where WN is the dominant carrier and tell us that they are taking advantage of folks.

Talk is cheap. We want some facts and figures from you to support your claim.

Unless, of course, you are just making stuff up as you go along.

 

[BoeingBoy]

Bob & ELP,

Interestingly, I see that BTS has come out with the 2Q05 Consumer Air Fare Report. Some WN "dominated" markets:

Market / WN Market Share / WN's Avg Fare Paid

Austin - Houston / 70.52% / $91
Austin - Dallas / 79.91% / $92
Las Vegas - Ontario / 90.12$ / $81
Ft Lauderdale - Tampa / 99.34% / $81
Baltimore - Norfolk / 98.62 / $76
Baltimore - Islip / 99.21% / $77
Kansas City - St Louis / 100% / $75
Burbank - San Jose / 99.92% / $95
Baltimore - Hartford / 97.97% / $77
Los Angeles - Oakland / 96.00% / $94
Kansas City - Oklahoma City / 99.11% / $79

How about long-haul....

Oakland - Philadelphia / 70.77% / $155
Phoenix - Providence / 77.94% / $173
Louisville - Phoenix / 70.38% / $149
Chicago - Oakland / 72.21% / $127
Albuquerque - Orlando / 64.49% / $153

There's more, but that should give an idea.....

Jim

 

[ELP_WN_Psgr]

Bob & ELP,

Interestingly, I see that BTS has come out with the 2Q05 Consumer Air Fare Report. Some WN "dominated" markets:


There's more, but that should give an idea.....

Jim

Thanks for looking those up, BB...I have those.

But those numbers tend to demonstrate that folks in WN dominated markets are NOT being bent over a table, forced to squander the money they had put aside for children's clothing on an airplane ticket.

(Baby needs a new pair of shoes).

I am looking, instead, for some facts and figures that support LCC#1's contention that WN takes advantage of folks in markets they dominate.

Even more telling is what they do to folks in markets where they have between 98 and 100% (OAK-BUR, MCI-OKC, MCI-BNA, etc)

 

[BoeingBoy]

I am looking, instead, for some facts and figures that support LCC#1's contention that WN takes advantage of folks in markets they dominate.

As you know, you'll look long and hard - and still not find that evidence . WN's fare structure looks the same whether they have 1% or 100% of the market share.

Jim

 

[sfb]

I am sick and tired of the bitching and whinning about US Airways and high prices. Let's look at the dominate SWA markets.

OK, let's compare similar dominated markets (2Q05 numbers):

RDU-BNA, WN market share 90.47%, WN average fare $99
CLT-BNA, US market share 88.85%, US average fare $211

BWI-BUF, WN market share 96.34%, WN average fare $72
PHL-BUF, US market share 85.59%, US average fare $326

BOS-PHX, HP market share 36.23%, HP average fare $309 (HP has the only non-stops)
PVD-PHX, WN market share 77.94%, WN average fare $173 (WN has the only non-stops)

COS-PHX, HP market share 82.42%, HP average fare $225
MAF-PHX, WN market share 95.07%, WN average fare $150

There are US-dominated markets which are just screaming for JetBlue to enter from JFK (and Delta has vulnerable markets, too):

NYC-PIT, $293 average fare on US
NYC-CLT, $190 average fare on US (and this with DH in the market)
NYC-ORF, $199 average fare on US
NYC-RIC, $176 average fare on US (oh wait, they've announced RIC)
NYC-GSP, $168 average fare on US