There is a significant distinction between GO Fares and simplified or rationalized fares. While GO Fares are artificially low and do cause the significant losses, a rationalized fare structure can minimize these low end fares, and allows pricing more tied to actual costs.
For example, LGA-CLT is about 540 miles. At 10 cents a mile average CASM, it costs US $54.00 to transport one person on that route. If you allocate 5 seats below that level, and the rest at 4 or 5 levels above, topping out at let's say $299 one way, you would find most of your seats earning a profit. Furthermore, the people who object to paying $400 or $500 each way might reconsider at $299. This is simplified, but the logic is sound.
What needs to happen is to totally reinvent yield management. I agree with PITBull--GO Fares are a disaster. Rational fares done right could actually help. America West and Alaska did it a while ago, and it is apparently working for them. Delta did it in CVG first, and it has proven to be revenue positive in the long term.
Frequent fliers like myself (and almost all of the travelers I meet on the road) don't care about GO fares--those are tied to stealing customers from Southwest etc. With a FAIR fare structure, we get what we want, which is value, and the company gets more of what they want which is increased revenue and profit potential.
I believe Simplifares is being attacked because of fear---fear that change might be a good thing in this case.
We don't need CHEAP--we need FAIR.....what is so hard to understand about that?????
My best to you all.....
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