On 3/2/2003 8:16:13 PM mwa wrote:
No - the problem is pricing. At today's fares the break even load factor is greater than 100%. The infrastructure will collapse and resemble AmTrak if changes are not made.
Here's my sample round trip fares for DFW-LAX:
Unrestricted coach (fully refundable) - $620 - 21.53 cents per mile
7 day advance purchase - $500 17.36 cents per mile
14 Day Advance Purchase - $400 13.8 cents per mile
21 Day Advance Purchase - $331 11.5 cents per mile
IMHO, you'd greatly increase the number of people who would find it affordable to travel at the last minute. You wouldn't sell the entire coach cabin a loss leader fare and hope to make it up on the backs of a few who have to pay full coach. If you book a fare 23 days in advance, and plans change when there are 8 days remaining, just charge the difference between what they paid and what's the effective rate for those days - drop the stupid "change penalty" - you want customers to return, remember? Piss them off by screwing them with change fees and they'll fly someone else.
Another idea (which will go over with 'elites' about as well as fare reductions go over with airline employees) is eliminating the first class upgrades from any fare class tickets. Charge a decent rate for first class and CHARGE them to fly there. Putting a butt that paid $100 round trip into a first class seat because he has a bunch of miles in his AAdvantage account is doing nothing for your bottom line. Any complementary upgrades ought to come from full Y class at the very least.
Yeah, Northwest most likely would run a fare sale and sell tickets below cost...let them. Yes, you'll most likely lose a few passengers who are willing to fly north to go west. That's cool. NWA would be losing money on them. Better to have the competition lose the money than to fill your coach cabin with a bunch of money losing fares and lose the money yourself. Push the fact that you wouldn't charge fees for changes. Appeal to the value inherent in the system. So far, the airlines only seem to feel that increasing demand applies to the leisure traveller. Do something for the business traveller. The "value" prices were a start, but sadly, they are laden with the same penalties and fees that the 21 day advance tickets are saddled with. Let a last minute business meeting run long and you're happy to nickle and dime the primo customer because he or she didn't buy a "flexible" ticket at 10 times the lowest fare.
IMHO, that would have a far bigger postitive impact than raising fares across the board. The alternative is to raise everything, then face the additional layoffs as supply is decreased yet again to meet the lessened demand.