What’s causing the lack of network airline pricing power?

[trvlr64]

40% is quite excessive and somehow I think that is probably wrong. I know what my company's "discount" is with US and often I can find a cheaper fare by using the airline website. I have pointed this out to my boss and several other management people in my company. And on certain fares (V & Q) we get no discount at all.

I just think whoever posted that their company is getting up to a 40% discount in another forum (FT perhaps?), might not truely know that their company gets. With all that's happened in the airlines today, they are not as generous as they used to be to corporations. But hey I could be wrong.

 

[TomBascom]

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On 8/1/2003 6:39:39 AM trvlr64 wrote:

40% is quite excessive and somehow I think that is probably wrong.
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Don't dismiss it so lightly -- it's oddly similar to the sort of cut that one would need to see in Y & B fares to get to a somewhat "rational" fare structure. With discounts in that range US' walk-up Y & B fares start to look competitive with HP's and, to some extent, WN's.

The more interesting question, IMHO, is: Does it work? Are these discounts resulting in a "better" grade of business for US? IOW does offering the discount result in a larger percentage of more profitable tickets being sold to the group that it is offered too?

IMHO it would be a mistake to worry that money is being left on the table by "excessive" discounting -- customers do have choices and they have clearly shown that they aren't going to be gouged. If a discount of 40% is resulting in more Y fares than the control population buys it's a big win -- not a loss.