Why Should We Stay?

[avek00]

"Cost plus margin---it's not rocket science..."

You think airlines *HAVEN'T* been trying to do that? I challenge you to have FFOCUS members compute the RASM that US receives from their business, and see if many FFOCUS members have ticket buying habits that cover the costs to transport them. I know that such analyses have been done on FT with CO and UA FFers (albeit on a very small scale), and many so-called "loyal customers" were surprised to realize that their airline of choice is rewarding them with Elite status for loss-making travel habits.

 

[Art at ISP]

Avek,

I agree with you in principle that there are elite flyers who are not profitable..however I know for a fact that I am not one of them, nor are the core members of FFOCUS. I cannot say that we never take advantage of fare sales, but more often than not we are not able to due to schedule or other requirements.

I do not pretend to be an expert but I am confident that overall US is making a pretty good profit on me...I for one don't confuse CHEAP with FAIR. My AVERAGE weekly spend on airfares is around $800..sometimes less, often more. It's one thing to pay $50-$100 more for a ticket which gives you a better schedule or is less restrictive, but it's another to be asked to pay 10 times more for the same thing.

What's happening here is that there is no longer VALUE if you cannot provide a RELIABLE service. I am not saying it is definitely better elsewhere, but my bet is that it is..time will tell.

 

[JS]

"Cost plus margin---it's not rocket science..."

You think airlines *HAVEN'T* been trying to do that? I challenge you to have FFOCUS members compute the RASM that US receives from their business, and see if many FFOCUS members have ticket buying habits that cover the costs to transport them. I know that such analyses have been done on FT with CO and UA FFers (albeit on a very small scale), and many so-called "loyal customers" were surprised to realize that their airline of choice is rewarding them with Elite status for loss-making travel habits.

[post="259741"][/post]​

You and KCFlyer need to go back to school and take a class in economics.

Let us know when you understand the concepts of:

sunk costs
marginal (or variable) costs
competition
marketing
yield management

 

[Art at ISP]

JS,

In all honesty, it appears that the airlines themselves no longer understand the concept of yield management.

Then again, like I always say, PERCEPTION is REALITY to most people....

 

[whlinder]

They understand the concept of yield management, but they don't have (IMHO) the proper data and information to make smart pricing decisions. Plus they use yield management for short term gains instead of long-term sustainability.

 

[pitflyer]

Pitflyer, it has nothing to do with miles, or status or any of that anymore...I have been a loyal customer to US because their people were the best...was I treated well? Of course, but you would expect any company to treat a regular customer better than an occasional one....

That is a fair request of anyone to ask any corporation, however whether or not it gets answered is a totally different animal. I spent months at one particular hotel, but because that hotel was always oversold I never received any perks. On the other side, I spent a couple of weeks at a smaller hotel and was treated like royalty. I voted with my dollars, as should you.

It is about the people and a RELIABLE operation--what part of that don't you get?? And I have gained NOTHING personally from my participation in FFOCUS or any other such group...My aim was to help the company improve itself, survive and grow--nothing more nothing less...and that would have resulted in a better customer experience and perhaps better value...

Still, making the company better was in your self-interest. USAirways served your needs and you wanted to make them better so they could serve YOU better. FFOCUS or other efforts are not charity work, they were done in hope of a win-win situation, make USAirways better for everyone, including those in FFOCUS.

PS, I think you know the super duper secret handshake that the rest of us can't learn without signing the super duper secret confidentiality agreement about the proceeds from the FFOCUS meetings. So you gained that, while us peons know not what we miss..

it's only now that I am beginning to realize that is not likely to happen. Where Bob and I differ is in the way we express that disappointment.....

Fair enough. I will not compare you to PineyBob. And please note I think your original question was a fair one to ask anyway, I just laugh when I see certain people attach higher aspirations to their special interest groups.

 

[mweiss]

...they use yield management for short term gains instead of long-term sustainability.

[post="259764"][/post]​

This sums up in one succinct sentence the motivation behind "BlowFares." Once upon a time, that approach was sustainable due to a combination of several factors. One by one, those factors have changed. The new model of yield management requires a long-term sustainable model.

 

[Art at ISP]

That is a fair request of anyone to ask any corporation, however whether or not it gets answered is a totally different animal. I spent months at one particular hotel, but because that hotel was always oversold I never received any perks. On the other side, I spent a couple of weeks at a smaller hotel and was treated like royalty. I voted with my dollars, as should you.

Agreed--and so it may happen..

Still, making the company better was in your self-interest. USAirways served your needs and you wanted to make them better so they could serve YOU better. FFOCUS or other efforts are not charity work, they were done in hope of a win-win situation, make USAirways better for everyone, including those in FFOCUS.

Making the company better would be in the interest of ALL customers not just FFOCUS members. It would have benefited the entire flying public. Of course we would have benefited as well, but why not?

PS, I think you know the super duper secret handshake that the rest of us can't learn without signing the super duper secret confidentiality agreement about the proceeds from the FFOCUS meetings. So you gained that, while us peons know not what we miss..

Sorry, there's no super secret handshake. All you had to do to find out what happened at the meeting was register as a member of FFOCUS--it's free and we don't bother you with drivel--you can read what you want--no big secrets at all..if you want more, PM me.


Fair enough. I will not compare you to PineyBob. And please note I think your original question was a fair one to ask anyway, I just laugh when I see certain people attach higher aspirations to their special interest groups.

Let me tell you something about Piney Bob. He cares more about US Airways and its employees than some of the people supposedly running the place. Is he upset, yes. Is he passionate, yes....but is he self serving to the degree you think he is? Absolutely not.....I know him well, and although we don't always agree on how and when to say things, I assure you his heart is in the right place...

[post="259772"][/post]​

Thank you all for keeping this thread somewhat civil and FFOCUSed....unfortunately, we are apparently no closer to getting some answers to the original questions...

 

[JS]

Thank you all for keeping this thread somewhat civil and FFOCUSed....unfortunately, we are apparently no closer to getting some answers to the original questions...

[post="259779"][/post]​

Do you seriously expect CCY to reply here? I thought this was just a discussion we were having amongst ourselves.

If I were you, I would send the letter again, minus the emotional phrases and words, and about half as long.

 

[Art at ISP]

JS,

Absolutely not--it was a generic call for answers--but they know how to reach me and my colleagues and haven't.

I don't think they HAVE the answers to be honest....

 

[pitflyer]

Sorry, there's no super secret handshake. All you had to do to find out what happened at the meeting was register as a member of FFOCUS--it's free and we don't bother you with drivel--you can read what you want--no big secrets at all..if you want more, PM me.

Not to drag this off topic, but that is just not true. I've been offered the proceeds of the FFOCUS meeting but I have to agree with not disclosing those results to others. As a believer in full disclosure (the servers I operate are secure because of such policies) I refuse to agree to such a policy. Hence my real primary disagreement with FFOCUS and the source of the super duper secret handshake comment.

I don't think its appropriate to single people out on forums, so I will just say there is a thin line between passion and insanity.

 

[avek00]

IMHO, management has answers, but is not in a financial position to tell you what you want to hear -therefore, the company has wisely decided to stay silent and let the chips fall wherever they may.

 

[KCFlyer]

You and KCFlyer need to go back to school and take a class in economics.

Let us know when you understand the concepts of:

sunk costs
marginal (or variable) costs
competition
marketing
yield management

[post="259761"][/post]​

JS, there are classes in economics. Unfortunately, there are no classes in "common sense". And when the "overall revenues" brought in by a vocal minority (yes there are "hundreds" of FFUCOS members, but thousands of FF members and just regular old customers who don't belong to a frequent flyer program but just needed to get somewhere) do not cover the costs associated with providing that service, then they are NOT they type of folks the FF programs were designed to attract and retain.

Right now, US's game plan appears to be attracting that all important "leisure" segment of the market. And in order to maintain the vaunted "market share", they are pretty much giving away the farm. The problem with that strategy is that it ain't just the leisure travellers who are taking advantage of "what the company is selling"...it's the supposedly "high yield" passengers who becoming "low to no" yield passengers. And because they used to be higher yielding passengers a few years ago, they are now bringing in less, and demanding just as much (plastic cups in first excepted). Something's gotta give.

 

[JS]

JS, there are classes in economics.  Unfortunately, there are no classes in "common sense".  And when the "overall revenues" brought in by a vocal minority (yes there are "hundreds" of FFUCOS members, but thousands of FF members and just regular old customers who don't belong to a frequent flyer program but just needed to get somewhere) do not cover the costs associated with providing that service, then they are NOT they type of folks the FF programs were designed to attract and retain.

What's your solution? Terminate the frequent flyer account of every FFOCUS member?

Right now, US's game plan appears to be attracting that all important "leisure" segment of the market.  And in order to maintain the vaunted "market share", they are pretty much giving away the farm.  The problem with that strategy is that it ain't just the leisure travellers who are taking advantage of "what the company is selling"...it's the supposedly "high yield" passengers who becoming "low to no" yield passengers.  And because they used to be higher yielding passengers a few years ago, they are now bringing in less, and demanding just as much (plastic cups in first excepted).  Something's gotta give.

[post="259920"][/post]​

Like what? Please suggest some kind of solution. Your trite statements such as "Something's gotta give" and "It's the miles, stupid" sound cute but have no substance.

 

[KCFlyer]

What's your solution? Terminate the frequent flyer account of every FFOCUS member?
Like what? Please suggest some kind of solution. Your trite statements such as "Something's gotta give" and "It's the miles, stupid" sound cute but have no substance.

[post="259950"][/post]​

No...if they feel they must have a FF program to remain competitive, keep it. If it means that their CP members are taking full advantage of benefits while flying on a fare designed to attact the leisure traveller, then perhaps modifying the DM plan to reflect that...if that means that they accrue status miles based on the fare paid for each ticket, so be it. But it seems when that was tried, the cockroach club was formed.

For fares - I can pretty much tell you that what they are doing isn't going to provide for long term viability...witness the 90+% load factors and $119M loss for February. My signature teases Art, but he and Tom are right - it IS the fares stupid. Yes, US is having to compete against Southwest. But when Southwest allocates 15 seats on a plane to Florida for the $100 round trips, US should perhaps consider something besides keeping 50 seats available at that fare to "out SWA-SWA". All that strategy gets them is that they have to maintain "blo-fares" on non competing routes. If Southwest sends out a half full flight that is profitable while US is sending out a flight that is 90% full and making a loss - then something DOES have to give.

IMHO, what hurts US (and others going up against LCC competition) is that they are viewed as reactionary...I think that had US had a "fair fare" system in place prior to SWA entering PHL or PIT, then the impact of SWA coming in wouldn't have been as severe as it was. But when you piss off a populace by holding their feet to the fire because "we're the only game in town" on certain routes, the populace can be more inclined to say "F you" when somebody else moves into town and offers more reasonable (read that as "low but not money losing") fares. Then US ends up offering more seats in their cabins at fares lower than SWA to keep people from defecting.

Yep, I don't have any scientific or economic studies to back up my "gut" feeling, but when I look at the price of oil in the mid 50's, and it' projected to stay there (heck, isn't fuel a bigger cost for US these days than labor?) then something has to change. Not just for US, but for every other airline out there. And the change is going to have to come from the traveling public - frequent flyers or leisure travellers. When it costs them twice as much to fill up the gas tank in their cars, they can't expect to see airfares that are priced as if oil costs half as much as it does. And since airlines have little control over the price of oil (short of hedging - which US really can't do even if they wanted to), they are going to have to cut costs somewhere. When your labor costs have been cut to the bone, what else do you cut?. The cuts over the past couple of years have impacted mainly airline employees...the day is coming in the not too distant future (IMHO) that the pain is going to be felt more by the customer. Airlines can't stay in business any other way.