Should US Airways reintroduce MetroJet

[FM2436]

Should US Airways consider reintroducing an Allegiant Air type of US Airways Vacations (MetroJet???) operation? Allegiant has announced a return to Hagerstown Maryland. If Allegiant can pack a MD-82 with passengers by simply offering only twice a week roundtrip flights to Orlando, and appear to make a profit in these former commuter markets, why shouldn't US Airways do the same? Slap the name US Airways Vacations across the aircraft and select 15-25 smaller cities and fly twice a week O/D into Orlando.


http://articles.herald-mail.com/2012-03-22/news/31227598_1_allegiant-air-lack-of-market-demand-hagerstown-regional-airport

 

[700UW]

No

 

[wings396]

I will give this a No as well. It has been proven more than once that the Airline within an Airline doesn't work. We tried it, DL tried Song, UA, had Ted, and there was CO Lite.
None lasted very long proving that its not the way to go.

 

[SparrowHawk]

Having a separate brand like Metrojet? NO NO NO

The second part is interesting and US does some of this on it's Caribbean & European routes or at least they did. The Allegiant approach is interesting. It has been said that it is a key to their success. I think there are opportunities that could be exploited by US profitably. Not sure US has the capacity in terms of current fleet to do so.

The Marketing & Planning Executive, Andrew Nocella has and is IMO one of, if not the best at these things. If there is a way to make money he can usually find it. He doesn't pick many new routes that turn out to be clinkers. IMO he is one of the big reasons there is a US Airways. If the money is there he'll find it.

 

[luvn737s]

Twice weekly service out of HGR? That might be all that's left of the mighty east before it's all said and done.

 

[HPearlyretiree]

Should US Airways consider reintroducing an Allegiant Air type of US Airways Vacations (MetroJet???) operation? Allegiant has announced a return to Hagerstown Maryland. If Allegiant can pack a MD-82 with passengers by simply offering only twice a week roundtrip flights to Orlando, and appear to make a profit in these former commuter markets, why shouldn't US Airways do the same? Slap the name US Airways Vacations across the aircraft and select 15-25 smaller cities and fly twice a week O/D into Orlando.


http://articles.herald-mail.com/2012-03-22/news/31227598_1_allegiant-air-lack-of-market-demand-hagerstown-regional-airport

Yeah, because the "airline within an airline" concept worked so well for US, United (twice!) and Continental.

 

[Dont call me Shirley]

Across the Pond, Scandinavian tried it with "Snowflake" the mid 90s. It melted.


And also, don't forget "Shuttle by United".

 

[Keroseneuser]

A big fat NO!

 

[crazystnic]

A big fat NO!

But why doesn't this mgmt take advantage of opportunities ,, why don't we go from Bos lga dca to fl cities once at 9am. And to Chicago.

Why don't we go to the ski areas in the winter.

Why don't we have real service to Nantucket and mvy in summer.

So much revenue left on table

 

[PullUp]

But why doesn't this mgmt take advantage of opportunities ,, why don't we go from Bos lga dca to fl cities once at 9am. And to Chicago.

Why don't we go to the ski areas in the winter.

Why don't we have real service to Nantucket and mvy in summer.

So much revenue left on table

True, all. However, JB does BOS/NY to FLA cheaper - can't compete.
DAL is doing the chicago shuttle now. They can afford to throw money at it.
Seasonal service or servicing major events like mardi gras, ski resorts, etc are great ideas and IMO mgmt misses the mark on these.
Also, what about HPN, the wealthiest neighborhood in the nation? No mainline service?
John Wayne is another one.
US used to chase the first class fares, now just operates on volume sales at bargain prices.
Different management philosophy - one that has no clue about business travelers or the east coast.
Oh, and giving routes away to our Star cousins doesn't really help our bottom line, does it?
Cheers.

 

[SparrowHawk]

True, all. However, JB does BOS/NY to FLA cheaper - can't compete.
DAL is doing the chicago shuttle now. They can afford to throw money at it.
Seasonal service or servicing major events like mardi gras, ski resorts, etc are great ideas and IMO mgmt misses the mark on these.
Also, what about HPN, the wealthiest neighborhood in the nation? No mainline service?
John Wayne is another one.
US used to chase the first class fares, now just operates on volume sales at bargain prices.
Different management philosophy - one that has no clue about business travelers or the east coast.
Oh, and giving routes away to our Star cousins doesn't really help our bottom line, does it?
Cheers.

Way back when I was in the good graces of US Management we were told the following by someone at the Sr VP level, "If I could raise the bottom fare $30, I could lower the top price by $300". So there is some logic to the current approach. Where it falls apart is when you add in competition. DL, UA & AA all offer the business traveler more amenities for the same price. This is due to US's relative size compared to the other majors. As a result US has to do two things.

1. Manage costs. The numbers I've seen is that in order to maintain profitability they need to pay 13% less in order to maintain their margins. This also accounts for the non stop nickle & dime approach to ancillary revenue & relative lack of amenities.

2. They have to maximize the profitability of EVERY Flight on EVERY Route. If US does say 5 flights per day to a destination and 4 of those flight have above average yields and load factors and the mid day flight lags? It's gone and put on another route.

This is why Doug wants, seeks maybe even needs a merger or acquisition. US doesn't have the luxury of maybe making money flying to the ski resorts, FL & LAS from places like DCA, BOS & LGA. US is one bad year maybe two from being back to circling the drain again.

 

[PullUp]

Way back when I was in the good graces of US Management we were told the following by someone at the Sr VP level, "If I could raise the bottom fare $30, I could lower the top price by $300". So there is some logic to the current approach. Where it falls apart is when you add in competition. DL, UA & AA all offer the business traveler more amenities for the same price. This is due to US's relative size compared to the other majors. As a result US has to do two things.

1. Manage costs. The numbers I've seen is that in order to maintain profitability they need to pay 13% less in order to maintain their margins. This also accounts for the non stop nickle & dime approach to ancillary revenue & relative lack of amenities.

2. They have to maximize the profitability of EVERY Flight on EVERY Route. If US does say 5 flights per day to a destination and 4 of those flight have above average yields and load factors and the mid day flight lags? It's gone and put on another route.

This is why Doug wants, seeks maybe even needs a merger or acquisition. US doesn't have the luxury of maybe making money flying to the ski resorts, FL & LAS from places like DCA, BOS & LGA. US is one bad year maybe two from being back to circling the drain again.

Agree, and it shows in everyday ops and in the quarterly/annual reports.
Wall street seems to agree....they say we're doing 'ok' but a runup in fuel could hurt LCC tremendously.
But, from the same perspective, look at Southwest's first quarter. Maybe they'll lead the charge and bump up fares.
During BK2 at LCC, rumor had it that if everyone that bought a ticket had paid $10 more, we would have broken even with profit above that.
Something is wrong with the industry pricing model when Exxon makes 8 billion a quarter and Southwest posts a loss.
Some oilman is getting a free ride....
With new entrant airlines virtually non-existant and fortress hubs emerging once again, you'd think the industry could price itself correctly for a 8-10% margin.
However, that would remove any lever with dealing with unions and their contracts, n'est pas?
Cheers.

 

[Jester]

The Allegiant approach is interesting. It has been said that it is a key to their success.

Allegiant makes a large part of its revenues off ancillary revenues separate from actually flying people and their bags. The aircraft is just a means to get people to where they can rent cars, rent hotel rooms, catch shows, and take cruises, thus it is a completely different business model from that of US or other legacy carriers. I have actually read their annual reports.

So Expresses Jester.

 

[Squonk]

Negatory

 

[crazystnic]

True, all. However, JB does BOS/NY to FLA cheaper - can't compete.
DAL is doing the chicago shuttle now. They can afford to throw money at it.
Seasonal service or servicing major events like mardi gras, ski resorts, etc are great ideas and IMO mgmt misses the mark on these.
Also, what about HPN, the wealthiest neighborhood in the nation? No mainline service?
John Wayne is another one.
US used to chase the first class fares, now just operates on volume sales at bargain prices.
Different management philosophy - one that has no clue about business travelers or the east coast.
Oh, and giving routes away to our Star cousins doesn't really help our bottom line, does it?
Cheers.

Agreed. Not talking about full service from Bos lga dca to Florida just one or two peak flights per busy day of week

Also noticed that although they closed Bos crew base, they did do Bos punta Cana .... Bos cancun and bos montego non stops on Saturday this winter.. That's what I'm talking about. Stop the run and hide