Nwa Launches $50. Biz Fare Increase
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NewHampshire Black Bears
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Bigsky said:
+++++++++++++++++++++++++++++++++++++++++++++++++
Sky,
with 19 days left in the 2nd qtr, before DL will report MORE massive $$$$ bleeding, it won't make ANY difference(IMHO) what they do.
I don't say that with "glee" in my voice, ONLY stateing what I perceive to be the truth !!
NH/BB's
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Bigsky said:
Why is Delta the bad guy? Your statement is more evidence that NWA and the other legacy carriers just don't get it. As I understand it, Simplifares caps domestic coach fares at $499 each way. That's more than a thousand dollars R/T for the passenger when you factor in the government fees. What do you consider a reasonable fare? A coach fare of more than $1,500 for BOS-SFO (which existed not too long ago), is the "simply stupid fare" -- and is simply unreasonable. The other simply stupid fare is $69 each way for DCA-DTW -- yet that's listed right now at the top of a list of specials on NWA.com. Is that "Simplifares" fault? How about offering rational pricing? With low-end fares that are somewhere in line with reality, you'll find that a thousand dollar fare aimed at the late-notice business traveler is more than enough.
It didn't stick:
http://biz.yahoo.com/ap/050613/northwest_fares.html?.v=2
Wonder why AA failed to match? Maybe because for years now, NW has always been the spoiler and not matched AA's attempted fare hikes.
http://biz.yahoo.com/ap/050613/northwest_fares.html?.v=2
Wonder why AA failed to match? Maybe because for years now, NW has always been the spoiler and not matched AA's attempted fare hikes.
WorldTraveler
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and maybe AA also realizes with DL that a revamped fare structure was long overdue. even though AA has fares over DL's cap, Simplifares would have been implemented either by AA or DL.
Repeating what I've said before... Simplifares was not implemented by DL to make any other airline's life easy. It was implemented because it made the most sense for DL and its passengers.
Repeating what I've said before... Simplifares was not implemented by DL to make any other airline's life easy. It was implemented because it made the most sense for DL and its passengers.
North by Northwest
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It was implemented because DAL is in need of fast cash...period. Please show the positive effect Simply DESPARATE fares have had for Delta? The losses continue to escalate. Help us understand. Even their CEO has realized that it was a mistake and has not ruled out removing the cap.
WT
It's Econ 101. You simply cannot have fares that do not even cover your costs. The Simply Stupid fares put a cap on walk up fares and do not fluctuate as the price of oil does. It's like selling Kool Aid at 10 cents a cup when the sugar alone cost you 10 cents. Sorry for the Kool Aid analogy, I usually save that one for the "look ma, I am an airline pilot" folks at Jetblew. Anyhow, this riduculous pricing scheme is a one way ticket to Chapter 11 for Delta. I was surprised that American was stupid enough to go along for the ride on this one. NWA's move to raise fares and bust through the cap would have helped all the legacies including DL and AA. Apparently, DL is happy losing 5 billion dollars a year. I guess they want to expedite the filing.
good luck to all those at NWA as we share the industry with some folks who could definitely use a refresher course in economics.
cheers
bigsky
It's Econ 101. You simply cannot have fares that do not even cover your costs. The Simply Stupid fares put a cap on walk up fares and do not fluctuate as the price of oil does. It's like selling Kool Aid at 10 cents a cup when the sugar alone cost you 10 cents. Sorry for the Kool Aid analogy, I usually save that one for the "look ma, I am an airline pilot" folks at Jetblew. Anyhow, this riduculous pricing scheme is a one way ticket to Chapter 11 for Delta. I was surprised that American was stupid enough to go along for the ride on this one. NWA's move to raise fares and bust through the cap would have helped all the legacies including DL and AA. Apparently, DL is happy losing 5 billion dollars a year. I guess they want to expedite the filing.
good luck to all those at NWA as we share the industry with some folks who could definitely use a refresher course in economics.
cheers
bigsky
LGA Fleet Service
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TechBoy said:
Isn't it though? How many hikes in the last 18 months were rolled back when NWAC wouldn't play ball?
Now they are ass out in the breeze and complaining when it goes under because AMR and DAL dont go along?
Reap the whirlwind...
Every fare increase isn't warranted but the last attempt to raise fares was an attempt to break the cap put in place by DL with their Simpli Fares. Unfortunately, the Simpli Fares do not account for the constant fluctuation in oil prices to which NWA was attempting to counter with the fare hike. I would add that I do think NWA is partially to blame for not playing ball earlier but in light of the oil prices a fare increase is now clearly a no brainer.
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The irony of Airlines that are lingering in or on the brink of BK not raising fares seems even more extraordinary IMO. 😉 😉TechBoy said:
Bigsky said:
The $499 fare cap easily covers the cost of oil (and then some) on any flight in the country. The $499 cap isn't the problem... few people buy these last minute fares anyway. The problem are the $69 DCA-DTW which certainly don't cover the cost of oil.
You only need to raise the lower fares a little to make a big difference while raising the high end fares will do little.
NW is getting desperate now and they have no one to blame but themselves. NW has been extremely slow to change (even slower than DL). Now they are paying a price for their stubborness. What's really scary is that of all legacy carriers NW faces the least amount of LCC competition and they still can't get their act together. God help the folks at NW if WN or B6 ever come knocking at MSP or MEM.
WorldTraveler
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DL Flyer,
isn't it interesting how nervous NW folks are getting now that their company is threatening bankruptcy and talking about using the nuclear option to get costs down. My how the climate on the NW forum has changed in just a few short weeks.
The economics and basic math which BigSky doesn't understand is that a $499 fare net of tax on a route like DTWLAX provides NW with a yield of 23 cents a mile and over a dollar a mile on routes from DTW to the east coast. NW is free to charge fares higher than the $499 cap on routes where it chooses to do so (and does in some cases) just as other carriers do from their hubs.
As has been pointed out, NW played the role of industry pricing czar for years, lowering prices in other carriers markets and undercutting them at will as well as sinking numerous fare increases initiated by other carriers.
Finally, DL carries more connecting passengers than any other airline in the world. As such, DL has a very legitimate right to dictate pricing in the thousands of connecting markets that it serves. Might may not make right but we all learned on the playground that the biggest kid usually does get its way.
This is just one more piece of evidence to show that the CO/DL/NW partnership is tenuous at best and exists only to make sure the three carriers together are dominant in the marketplace.
isn't it interesting how nervous NW folks are getting now that their company is threatening bankruptcy and talking about using the nuclear option to get costs down. My how the climate on the NW forum has changed in just a few short weeks.
The economics and basic math which BigSky doesn't understand is that a $499 fare net of tax on a route like DTWLAX provides NW with a yield of 23 cents a mile and over a dollar a mile on routes from DTW to the east coast. NW is free to charge fares higher than the $499 cap on routes where it chooses to do so (and does in some cases) just as other carriers do from their hubs.
As has been pointed out, NW played the role of industry pricing czar for years, lowering prices in other carriers markets and undercutting them at will as well as sinking numerous fare increases initiated by other carriers.
Finally, DL carries more connecting passengers than any other airline in the world. As such, DL has a very legitimate right to dictate pricing in the thousands of connecting markets that it serves. Might may not make right but we all learned on the playground that the biggest kid usually does get its way.
This is just one more piece of evidence to show that the CO/DL/NW partnership is tenuous at best and exists only to make sure the three carriers together are dominant in the marketplace.
