US Appears to be finally starting the new IFE test

[sbtinme]

Please show where JB is enjoying a revenue premium over other legacies and LCC's (WN for example) because of their exemplary IFE.

Don't get me wrong, I think it's ridiculous that US had perfectly good equipment onboard, and decided to disable it (ala NW years ago...). Just wondering about some numbers here....

I doubt you'll ever see such numbers because one would need to be fully privy to a fair amount of internal data from several competitive carriers to make a careful analysis.

That said, we all know that on most domestic routes these days, airlines simply match each others fares. Jet Blue has great fares most of the time and they're matched 99% of the time by US/HP and all the rest.

However, it's well worth nothing that Jet Blue can come into cities like PWM with mainline aircraft with precious little marketing and consistently pull load factors in the low 90s day in and day out. Pax who experience a Jet Blue flight once are likely to come back for more.

It's nearly impossible to quantify these sorts of comparisons, but you can bet that Jet Blue's passenger model has surely won over tens of thousands of consumers who are now very loyal to that carrier.

This is happening as US/HP continues to dismantle its passenger model brick by brick by brick.

 

[SolidCactus]

Opinion. Please show where JB is enjoying a revenue premium over other legacies and LCC's (WN for example) because of their exemplary IFE.

Have you ever flown transcon on WN? Their IFE is awesome. Ive been on flights where the FA's tell jokes, play games and sing. They have some really fun flights.

BTW, Jet Blue's IFE is awesome, and yes - I think if you had a US flight, and a B6 flight same destination same price, people positively would choose Jet Blue because of the IFE. It isn't the same as having a movie to watch, it is having 40 channels of DirectTV and a few movies to pick from.

So to answer your question, I don't believe people look forward to the IFE on CO or UA, etc. They will watch the movie if they like the movie, but Jet Blue, YES, I believe the IFE makes all the difference...

 

[aredeeyou22]

Have you ever flown transcon on WN? Their IFE is awesome. Ive been on flights where the FA's tell jokes, play games and sing. They have some really fun flights.

BTW, Jet Blue's IFE is awesome, and yes - I think if you had a US flight, and a B6 flight same destination same price, people positively would choose Jet Blue because of the IFE. It isn't the same as having a movie to watch, it is having 40 channels of DirectTV and a few movies to pick from.

So to answer your question, I don't believe people look forward to the IFE on CO or UA, etc. They will watch the movie if they like the movie, but Jet Blue, YES, I believe the IFE makes all the difference...

I think we all get that. JB has an amazing product. I am allllll for PTV's: they rock.

The question that nobody can seem to answer:

Do the PTV's alone create a revenue premium? Is JB wildly profitable, as opposed to WN or AA, because they have spent millions on pax entertainment? Are they able to price their product significantly higher in markets where they compete with US or NW or WN because of PTV's? Are people willing to pay $50/$100/$200 more to fly on JB, over US, because of the PTV's?

 

[Singleflyer]

I think we all get that. JB has an amazing product. I am allllll for PTV's: they rock.

The question that nobody can seem to answer:

Do the PTV's alone create a revenue premium? Is JB wildly profitable, as opposed to WN or AA, because they have spent millions on pax entertainment? Are they able to price their product significantly higher in markets where they compete with US or NW or WN because of PTV's? Are people willing to pay $50/$100/$200 more to fly on JB, over US, because of the PTV's?

It is not as much revenue premium per sa. It is the yield they are getting, they don't need to sell as many deep discounted tickets in a market area. It is the perceived value.

If I were not a FF and took my family on a vacation, I would opt for JB (only flew them once, and not really impressed) because the direct TV would keep the kids occupied on the plane, and I won't need to deal with them as much, and I could read my book. I would not pay alot more per person, but some more to keep the kids occupied on what is a very boring part of any vacation.

The only flights I ever use IFE, is a transcon. And I don't fly NW on transcons for that reason. It just breaks up the flight.

 

[aredeeyou22]

It is not as much revenue premium per sa. It is the yield they are getting, they don't need to sell as many deep discounted tickets in a market area. It is the perceived value.

Ok, but is the "yield" JB is receiving on these competitive routes significantly higher than WN? US? Healthier yields systemwide, due to the PTV's, should lead to higher profits for JB as opposed to US and WN, no?

If I were not a FF and took my family on a vacation, I would opt for JB (only flew them once, and not really impressed) because the direct TV would keep the kids occupied on the plane,

Of course you would "choose" an airline with PTV's to occupy the kids, but...

I would not pay alot more per person,

There's the problem.... The majority are not willing to spend more for the PTV's. People may say they are willing to on here, but the reality is much different.....

The only flights I ever use IFE, is a transcon. And I don't fly NW on transcons for that reason.

How much more are you willing to pay to fly another airline with PTV's, if NW has the lowest fare?

 

[SS255]

I think we all get that. JB has an amazing product. I am allllll for PTV's: they rock.

The question that nobody can seem to answer:

Do the PTV's alone create a revenue premium? Is JB wildly profitable, as opposed to WN or AA, because they have spent millions on pax entertainment? Are they able to price their product significantly higher in markets where they compete with US or NW or WN because of PTV's? Are people willing to pay $50/$100/$200 more to fly on JB, over US, because of the PTV's?

The PTV's themselves do not necessarily create a revenue premium. The programming costs money, and unless B6 is pulling in enough money from PPV (which I doubt they are) the PTV's are probably an "L" in B6's "P&L" ledger.

However, the PTV's drive customers to B6. While I may not have the numbers to back up this statement, I don't think you could successfully argue that -- everything else being equal -- anybody would choose any of the legacies over B6 unless they were an elite customer.

I think that B6 can get away with pricing their product slightly higher than the competition, but I do agree that if US undercuts B6 significantly in price, they would win out....except perhaps on a transcon if IFE (and extra legroom) is important enough to the customer that they would pay $30 or $50 more.

IFE may not be the most important factor in choosing what airline to fly, but there is no denying that it does play a role for a certain percentage of the flying public.

Somebody on my staff (originally from NY) lives close to LAX, yet when she goes home she ALWAYS flies B6 BUR-JFK. She refuses to fly AA, UA or DL, and will not even look at fares on other airlines. She loves B6, and will battle hideous rush hour traffic to get from Culver City to Burbank so she can fly them. I tried once to talk her into flying VX. No dice.

 

[BoeingBoy]

Ok, but is the "yield" JB is receiving on these competitive routes significantly higher than WN? US? Healthier yields systemwide, due to the PTV's, should lead to higher profits for JB as opposed to US and WN, no?

Strawman - JB directly competes relatively little with US. WN directly competes a lot more with US and they do have a systemwide yield premium to US.

There's the problem.... The majority are not willing to spend more for the PTV's. People may say they are willing to on here, but the reality is much different.....

Where's the proof? Otherwise it's just your opinion, no more or less valid than anyone elses. Nothing wrong with having an opinion, unless you consider your opinion fact and demand proof before acknowledging that other opinions may be valid (which none of us have when you start talking about specific routes).

Jim

 

[az_wild727]

I think it comes down to this- when say US or B6 have the same price/routing here is what you have to think about. TV or miles and perks? I mean, some people live their whole lives without TV's their whole lives. I don't think a 4 hour flight (or even a 20 hour EWR-SIN flight) necessarily has to have IFE in order for the passenger to "survive" the duration of the flight.

I think most frequent fliers (which many of us here call bread & butter for the airlines) really pick their airlines/flights based on the miles (after schedules and pricing, of course) they can earn for future Star Aliance flights. I doubt any FFs here would give up 2,153 miles one way + bonuses on a JFK-PHX just so they can have a small TV screen in front of them for 4 hours. Also, please keep in mind there's a chance that everything that will be played on that flight may be of no interest to you. To pitch that against miles and benefits is not a smart gamble.

As a couple of you have said before, yes IFE and personal TV's are awesome, cool, hip and rad. However for the savvy frequent flier (which many of you are saying is leaving US, because IFE was pulled) miles and perks are what is #1, not IFE! In the end it comes down to this, if you are a frequent flier you should know how occupy yourself and "survive" the flight even if it were bare bones in terms of amenities. If you can't, maybe you shouldn't be that frequent of a flier.

-Kinglobjaw

 

[aredeeyou22]

Where's the proof? Otherwise it's just your opinion, no more or less valid than anyone elses. Nothing wrong with having an opinion, unless you consider your opinion fact and demand proof before acknowledging that other opinions may be valid (which none of us have when you start talking about specific routes).

Jim

If PTV's generated a revenue premium for JB over WN, and people paid a lot more to fly JB over WN or US because of the PTV's, wouldn't it affect things such as RASM? Is JB generating a revenue premium over its competitiors? What about comparing fares on certain competing routes: Wouldn't JB's fares be significantly higher than a competitor, if people are indeed willing to pay a healthy premium for the PTV's? I have no idea, just wondering, wish someone could answer....

 

[computer guy]

I think most frequent fliers (which many of us here call bread & butter for the airlines) really pick their airlines/flights based on the miles (after schedules and pricing, of course) they can earn for future Star Aliance flights. I doubt any FFs here would give up 2,153 miles one way + bonuses on a JFK-PHX just so they can have a small TV screen in front of them for 4 hours. Also, please keep in mind there's a chance that everything that will be played on that flight may be of no interest to you. To pitch that against miles and benefits is not a smart gamble.

Many FF will also pick a flight based on the value of the entire flight. For me if I am flying for work, the value of the entire flight is put into the entire equation. If you are including in seat power in the entire IFE debate, that can definately swing a FF towards any one carrier or flight.

Any flight that I take that is expected to last longer then the battery in my laptop, that has seat power is more valuable to me then a compariable flight without it, solely because I can do work during the entire flight and in turn am billable to my employer.

That piece is part of the overall value that we look at when we are booking something. Sometime it means I get the miles on US, othertimes it means I don't. More often lately, it means I don't since the value piece of the equation isn't holding up to it's competitors.

 

[BoeingBoy]

I have no idea, just wondering, wish someone could answer....

Anyone with definitive numbers isn't going to answer and everyone else doesn't have the numbers to give a definitive answer.

Using any publicly available data is largely trying compare apples and oranges. How many WN flights are there that operate in/out of JFK or BOS - zero. That means you can't compare the two. US has a few flights from JFK to compare with B6, and more from BOS, but one F/C ticket per day would hide any yield advantage that B6 might otherwise have. Throw in the other advantages a network carrier has over B6 - interline passengers and baggage, Alliance connections, rerouting in irregular ops, etc - and it's surprising that US doesn't enjoy a significant yield premium over B6 on competing routes.

So perhaps the better questions are why B6 puts IFE on all their planes if it doesn't give them an advantage? Is it bad management wasting money or shrewd management looking for an edge? Why is US testing new IFE systems if they don't expect it to produce additional revenue?

Jim

 

[aredeeyou22]

Throw in the other advantages a network carrier has over B6 - interline passengers and baggage, Alliance connections, rerouting in irregular ops, etc - and it's surprising that US doesn't enjoy a significant yield premium over B6 on competing routes.

But but... people never talk about alliances, or interlining, or rerouting abilities; they talk consistently about the IFE and how much it means to them. Then, they say they are not willing to pay extra for it.......Hmm....

So perhaps the better questions are why B6 puts IFE on all their planes if it doesn't give them an advantage? Is it bad management wasting money or shrewd management looking for an edge?

I believe it is, and when the day comes that I see JB turn a significantly larger profit over WN or US or AA or NW, I will believe that people pay extra for PTV's. You know, as well as I do, they will not. Period.

Why is US testing new IFE systems if they don't expect it to produce additional revenue?

Easy. Because they will find someone else to pay for it. And then they will put a delicious card swiper in it, as they should.......

 

[N965VJ]

<SNIP> I doubt any FFs here would give up 2,153 miles one way + bonuses on a JFK-PHX just so they can have a small TV screen in front of them for 4 hours.

But Tempe doesn’t care about FFs. Wouldn’t the Kettles want their kids entertained on the way to Gramma’s house? Those are the target customers now.

IFE and personal TV's are awesome, cool, hip and rad.

 

[aredeeyou22]

if the ticket is $198.00R/T on US or B6 and B6 has IFE and US doesn't it becomes one of many possible differentiators that may affect the purchase decision

Oh, I agree, all things being equal (198.00 RT), people would absolutely choose the IFE over no IFE. My whole point is, if US was 198.00 RT, and JB was 325.00 RT, same routing, same days, would the majority of the traveling public pay the JB price because of the IFE? Are most travelers willing to pay a premium to use the IFE, or are they searching for lowest price?

 

[SS255]

Oh, I agree, all things being equal (198.00 RT), people would absolutely choose the IFE over no IFE. My whole point is, if US was 198.00 RT, and JB was 325.00 RT, same routing, same days, would the majority of the traveling public pay the JB price because of the IFE? Are most travelers willing to pay a premium to use the IFE, or are they searching for lowest price?

Not in most cases -- certainly not for the IFE alone with that price differential. But not everybody buys on price alone. If someone who is familiar with both brands were flying on a transcon, they might pay $325 for 34" of pitch on B6 instead of $198 for 31" of pitch on US. And (correct me if I am wrong on the pricing) for another $50 or $60 or so each way they could have 38" of pitch. Those extra inches are very valuable on a transcon to someone who is not so price sensitive & is looking for a good value. Oh....and the IFE is an added bonus.....as is the water and Terra Blue chips (or whatever they're called). Not everybody finds value in extra seat pitch, so US definitely would have an advantage over B6 with many (but not all) customers at those price points.

I have stated many times on this board that US is entitled to provide and price their product in any manner which they see fit to maximize revenue. By the same token, customers are just as entitled to choose what airline to fly with based upon factors which are important to them. I personally think that IFE is a value-added service which enhances an airline's brand. By US not offering it right now in any form on transcons I believe that they are losing market share to their competitors.