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On 12/29/2002 6:36:37 AM ITRADE wrote:
Unless the airline can successfully push through a price hike, there is very little US can do about direct revenue generation. US did away with many of the "waiver and favor" programs and instituted standby fees. However, these only add incremental revenues. Unless all the other airlines agree that they want to raise prices, a fare increase is never going to stick.
And, applying the general economic principal of supply v. demand, increasing price in a depressed market is not the recommended strategy.
OTOH, US has done some long-term revenue builders that will take time to yield results. The code shares are examples of this.
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How about something different than raising fares? How about something like value pricing? By that I don't mean lowering prices on the super cheap restricted buy in advance leisure fares but lowering the unrestricted fares. As it stands now, there is generally about a 10-fold price difference between the cheapest economy fare and the unrestricted economy ($120 vs. $1200).
What does US Airways have to loose by trying something like value pricing anyways? The company is operating in chpt. 11, what does it have to loose if it does not work out?