Us Airways Comments On Southwest & Airtran

USA320Pilot

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May 18, 2003
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Southwest and AirTran Pittsburgh and Charlotte service

Southwest and AirTran announced plans to begin service in Pittsburgh and Charlotte on May 4, respectively. US Airways spokesman David Castelveter said the airline's plans account for increased competition from low-fare carriers. The company, which hopes to emerge from bankruptcy court in June, recently cut labor costs by more than $1 billion a year so that it could offer lower fares. "This is another example of the rapid pace of low-cost competition," he said. "That is why we so aggressively attacked our cost structure, so that we can compete better with these low-cost carriers."

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US Airways spokesman David Castelveter said the airline would match the fares offered by Southwest and touted the benefits of flying the legacy carrier, including seat assignments, which Southwest does not offer. "We think we will offer something better -- competitive fares and more than 200 nonstop flights a day to more than 50 destinations. And let's not forget seat assignments, first-class upgrades and an airport club," he said. Castelveter said US Airways has been able to hold its own against Southwest in Philadelphia and is putting in place the kind of cost structure that will allow it to compete "anywhere and everywhere we need to."

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USA320Pilot
 

ELP_WN_Psgr

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Nov 29, 2003
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US Airways spokesman David Castelveter said the airline would match the fares offered by Southwest and touted the benefits of flying the legacy carrier,

My questions:

If offering lower fares is a good idea (which it is) then why hasn't USAirways lowered their fares (especially for walk up travel) to something less than Oh-My-God levels before Southwest decided to move in.

And for all the wonderful reasons to fly the legacy carrier, I can give you one reason not to. But it's a pretty good reason:

Fly the legacy carrier, the low cost carrier leaves. The low cost carrier leaves, you are back to being held hostage to astronomical fares. Once Airtran left the PHL-PIT market, what did USAirways do with their fares on that particular route, eh?

Another reason to fly Southwest: It won't be a Barbie dream jet.
 

Heinrich

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Dec 20, 2002
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ELP_WN_Psgr said:


Another reason to fly Southwest: It won't be a Barbie dream jet.
[post="249233"][/post]​


I'd rather be on a CRJ than on a Southwest 737. You see, the last time I had a choice in the matter and chose Southwest, the flight was cancelled. The next flight was full. Southwest didn't care. Southwest would not put me on another airline. Southwest could not guarantee me a seat for many, many hours.

A similar experience on a real airline such as US gets me a seat on Delta, Northwest, Continental - and gets me much more piece of mind.

Glancing over the recent USAir schedule, the connections to Baltimore through Philadelphia from Norfolk are terrible.

I'll be DRIVING.
 

MarkMyWords

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Aug 20, 2002
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ELP -

If you owned a business and knew you could demand a premium price for your product, would you lower your prices just because you thought it was a good thing to do, or would you keep your prices high (since there is a demand) and do what a business is supposed to do.....make a profit?
 

calibrator

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MarkMyWords said:
ELP -

If you owned a business and knew you could demand a premium price for your product, would you lower your prices just because you thought it was a good thing to do, or would you keep your prices high (since there is a demand) and do what a business is supposed to do.....make a profit?
[post="249245"][/post]​
Defending their actions makes you look like part of them, low life scum suckers that talk out of both sides of their mouth saying whatever needs to be said in order to advance their personal agenda, and whether that hurts people or not matters not. This management team is the lowest common denominator when considering the human element and yet people like you defend them therefore becoming part of their disease.
 

MarkMyWords

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It is a business.....businesses are here to make money. If Holiday Inn were the only hotel at an exit off the PA turnpike and they charge you 120.00 a night for a room, should they lower their rate to 60.00 just because Motel 6 has a room rate of 45.00 a night 30 miles away? No. So why would you expect US to change their fares when they could get a premium for them since they were the only game in town.

That being said......that was then.....this is a totally different ball game. The playing field has changed. Now there is a Motel 6 at the same exit and I (Holiday Inn) must reduce my room rates and cut expenses to be profitable.
 

ELP_WN_Psgr

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Nov 29, 2003
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Good Morning All, esp M.M.W., let me answer your question---

In my hypothetical business, I would tend to let the cost of production influence the cost of whatever goods and services I offered, along with supply and demand.

HOWEVER.

I wouldn't price gouge. It may be smart business (in the short term) to extract $954 RT from someone to fly PIT-BUF-PIT. But it isn't smart in the long term. And I tend to think tactically and act strategically......and that's a pretty good summation of what WN does too.

Customers have long memories. Customers charged $954 RT for a less-thab-one-hour-flight simply because "the airline could, supply and demand permitted it" are going to harbor less than wonderful memories of said carrier.

Ir is a helluva lot better for your business in the long run if you fix prices at something deemed reasonable by both supplier and consumer.....and if you sell all your supply, you need to step up production (you can do this, since the cost of production is less than what you are selling it for).

Leaving money on the table is okay if it helps ensure that the consumer comes back and buys from you again and again and again.

So, to answer your question.....I think squeezing every penny you can out of your passengers is bad business...much worse business than leaving a few dollars on the table here and there....and I think the folks in PIT and PHL are going to agree it has been bad business for a long time. Some DM junkies will require their fix, but a lot of folks will vote with their feet and ride the ugly 737s. The market shares of PVD-PHL and MHT-PHL already indicate this is true.

Heinrich: Everybody has stories of what other airlines have or have not done to them in the course of doing business. Enjoy the drive. Tell me what you're driving and I will wave as I fly over. (I'd toss you a packet of peanuts out to snack on, but they don't much like to let you open the windows at 33,000')
 

MarkMyWords

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Aug 20, 2002
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ELP -

As I said, I do agree that price gouging is not "customer friendly". But you are basing your business decisions on already knowing where the industry has been and where it is headed. When US was at its peak of profitability and making money hand over fist, the market was willing to bear the price of tickets. If it weren't then driving would have been the more popular means of transportation and we would have been in this boat a lot earlier. Instead, customers were paying the price and flying. (Whether they were happy about it or not.) Since there were customers willing to pay those prices, our infrastructure also got fat and happy, fluffing up contracts and piling on ammenities.

WN realized that there was a market out there to bust this business model and took full advantage of it.

I would ask why is it that hotel room sin JAX for the superbowl went for 500.00+ a night? Because they could charge that and people would pay. Why does a McDonalds across from the beach in HNL charge 9.00 for a Value Meal versus one in a local neighborhood? Because they can and the people there will pay the price. If no one booked a hotel room in JAX then eventually the price would have come down. If no one at at the McDonalds, then the price would have come down. If customers aren't willing to pay the high fares, then the fares will come down.
 

Rico

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Jun 8, 2004
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What a load of poop.

You want to know what really happens when Southwest comes in...?

The same people that used to fly "fill in the blank legacy carrier" continue to fly that same legacy carrier, and then both SWA and the original carriers experience an increase in passenger loads stimulated by the lower fares.

People that used to drive, or flew from an airport closer to home now travel to the airport now served by SWA, to fly both SWA and the original carriers.

That is what is called the "Southwest Effect". MHT and PVD are seen as a perfect example of this.

The majority of the passengers do not leave the original carriers, in fact most prefer the assigned seating, connections, and other "legacy" benifits that SWA does not provide. They just want that stuff thrown in for free at the same ticket prices that SWA offers.

The problem is matching SWA fares with a higher cost structure. That sort of thing cannot go on forever. Thus the need for legacies to lower their costs to be able to make a profit from the high volume, low yeild traffic.

And thus the whole "reorganization" thing we happen to be going through...
 

nycbusdriver

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ELP_WN_Psgr said:


My questions:

If offering lower fares is a good idea (which it is) then why hasn't USAirways lowered their fares (especially for walk up travel) to something less than Oh-My-God levels before Southwest decided to move in.

[post="249233"][/post]​


Surely you are not that naive. Say you owned the only gas station at exit 135 in the middle of nowhere. You set your price to give yourself a nice, comfortable profit....say $1.99/gallon for regular. Your cost is $1.75, so it leaves you enough to cover expenses, keep your kids in private schools and good cuts of beef on the dining room table.

Then a big oil company-owned discounter buys the land across the road and puts in their own station. Citgo starts charging $1.82/gallon. In order to keep some business (and your station alive,) you reduce price to $1.85 and offer extra services (full-service, same price, etc.) Now the kids are in public schools and tuna casserole is on the dining room table 5 or 6 nights a week.

Why was it didn't you charge $1.85 to begin with?
 

NAPAUS

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Mar 30, 2003
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ELP_WN_Psgr said:


My questions:

If offering lower fares is a good idea (which it is) then why hasn't USAirways lowered their fares (especially for walk up travel) to something less than Oh-My-God levels before Southwest decided to move in.

And for all the wonderful reasons to fly the legacy carrier, I can give you one reason not to. But it's a pretty good reason:

Fly the legacy carrier, the low cost carrier leaves. The low cost carrier leaves, you are back to being held hostage to astronomical fares. Once Airtran left the PHL-PIT market, what did USAirways do with their fares on that particular route, eh?

Another reason to fly Southwest: It won't be a Barbie dream jet.
[post="249233"][/post]​
Last time i flew on one of your WHITE TRASH GHETTO jets with people who think Dennys is a big night out i wasnt impressed. People DO LIKE flying US and not all, if any, are impressed with tacky faux leather seats and fa/s who like like they were hired out of a trailer park. So go back to what u know best...flying AMERICAS TRASh- U are Now Free to move about the country..in a flying trailer park!!! :up: :up:
 

funguy2

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Aug 20, 2002
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I think the argument is that if you don't gouge your customers, your potential competitors won't see you as the next opportunity...

If I were running a hotel chain that could make money on $45/night rooms... I'd buy land near that Holiday Inn and charge $90/night... when they lower to match my price, I lower mine again.

Ditto for the Gas Station.

So again, the argument is, I think, if you want less competition, don't encourage your competition to show up by gouging customers... which does two things... 1. It gives your competitors ability to undercut you, and 2. Higher prices leads to less demand. Now... I'll agree that some markets will only have so much demand for a given route, so 737's won't work everywhere (like PIT to BUF), but that just means that maybe you should not be in some markets.

PIT-BUF air travel costs $954 + a rental car (probably) + Airport parking (maybe)

PIT-BUF by car costs maybe $40 in gas and maybe $5 in road tolls...

So, is 3 hours really worth $900? In most cases, the answer is no.

(3 hours is based on 4 hours to drive, 1 hour to fly... But of course, it takes more than 1 hour to fly thanks to the TSA, getting between the airport and your "real" destination on both ends, etc...)
 

ELP_WN_Psgr

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Nov 29, 2003
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Last time i flew on one of your WHITE TRASH GHETTO jets with people who think Dennys is a big night out i wasnt impressed. People DO LIKE flying US and not all, if any, are impressed with tacky faux leather seats and fa/s who like like they were hired out of a trailer park. So go back to what u know best...flying AMERICAS TRASh- U are Now Free to move about the country..in a flying trailer park!!!

To the poster:

1. I am not an employee of Southwest Airlines Co nor do I, at present, own any of their stock. I follow the industry and, just like some USAirways folks (Art & Bob come to mind) are addicted to their Dividend Miles, well, I love my Rapid rewards credits.

2. I'm sorry you weren't impressed.

3. Some people don't like flying USAirways. Sorry to burst your bubble. Lots of folks had baggage problems over the holidays when flying thru PHL. I think those folks, as a starter, would take faux leather seats (actually it isn't faux, but I won't go there) and whimsical FAs over disgruntled underpaid food stamp recipient ticket agents who have been forced to demand you use a kiosk before they even deign to help you.

4. As far as flying America's trash (why so judgmental???) you are lumping a whole lot of business travelers into your trash category. For, you see, Southwest is really not the airline for leisure travelers or mom & pop on an annual pilgrimage to Vegas (to spend the grandkids' inheritance) or Orlando. It's an airline for business people that has some leisure traveler routes stuck on the system. What makes it so? Frequency frequency frequency. Reasonable walk up fares that don;t eviscerate the office's travel budget. If Ma and Pa Kettle wanted to go from Houston to Dallas they'd hop in the pick up (the one with the gun rack and the doors wired on the chassis with bob wahr) and drive. If the Joads are still out in California, they wouldn't go from Southern Cal to the Bay area by flying from Burbank to Oakland (or San Jose) at better than one flight every hour.

5. Your post sums up, rather succinctly, why USAirways is in trouble and why Southwest is not......why it was President Bush (2x) and never President Gore or President Kerry. If you misunderestimate your opponent, then you shouldn't be surprised when he kicks your tail.

That being said, here's wishing everyone a happy President's Day.
 

wnbubbleboy

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Aug 21, 2002
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NAPAUS said:
Last time i flew on one of your WHITE TRASH GHETTO jets with people who think Dennys is a big night out i wasnt impressed. People DO LIKE flying US and not all, if any, are impressed with tacky faux leather seats and fa/s who like like they were hired out of a trailer park. So go back to what u know best...flying AMERICAS TRASh- U are Now Free to move about the country..in a flying trailer park!!! :up: :up:
[post="249531"][/post]​
I must say sir, very well put. I will miss you. It's as if you know me. Did we spend any time in prison together?

I must leave now, I have a heavy schedule today. I have an appointment to get my mullet trimmed; tattoo; wife beater tailored; get one of my pitbulls out of the pound, WWE tickets, oh yea, and bail my girfriend out of jail.

Have a nice day.
 

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