$1,000 R/t Lga-clt In Economy!

[ClueByFour]

To get this slightly back on topic, many companies should start to look at average per-seat costs of chartering for trips requiring a few people. A King Air or Navajo is perfect for those trips around 500-700 miles.

Many already do.

Our (fortune 500 diversified industrial manufacturer) has a half-dozen Lear 45s, and is considering both something with longer legs (for transatlantic hops) and something with shorter legs (the breakeven point for nonexecutive travel is 5.5 individuals traveling--we'd like to lower that).

Why? Somebody ran the numbers, and midweek travel for 2-4 people could be accomplished for less with a private airframe something like 40-50% of the time--and that's with airfares relatively low and a large percentage of advance purchase fares.

I regularly fly the family Cirrus SR22 from HPN to 8G7 (or BTP in bad weather) when I need to do 1-2 days trips to PIT in the middle of the week--it's far cheaper (including all the 100LL, fees, and tiedown/hanger fees) than taking US (or anyone else) most of the time.

 

[geo1004]

US employees are the lowest paid in the industry, WN is the highest and they make money!

I always love this one. This is only true if you look at the piece of paper with the payscales written on it. US has veeeeery few junior employees left so no one is getting payed at those entry level scales. Just about everyone at US has years and years of seniority so when it comes time to pay the paychecks US's labor costs are non-competetive.

A simple example (hypothetical) why the "WN employees make more than US's" theory is moot:


Company #1: LUV?

Everyone starts at $25,000 a year and gets an additional $1,000 for every year of service. Company #1 has one employee with less than one year seniority (earning 25k/yr), one employee with five years (30k/yr), one more with 10 years (35k/yr), and one more with 20 years (45k/yr). The total labor cost for the company's 4 employees is $135,000.

Company #2: US?

Everyone starts at $23,000 a year and gets an additional $1,000 for every year of service. Company #2 has zero employees with less than one year seniority (earning 23k/yr), one employee with five years (28k/yr), one more with 10 years (33k/yr), and two more with 20 years (43k/yr). The total labor cost for the company's 4 employees is $147,000.


EVERY employee at Company #2 can point his or her finger at their exact counterpart at Company #1 and say that Company #1 employees make more. That's true. But come payday, the seniority of the employees at Company #2 COST more. Company #1 retains the advantage and an can afford to charge less for the same product and still make a profit.

And about those productivity rules...

 

[youngblood]

Hey man, somebody has GOT to pay the salaries of folks like 700UW, PitBull, and OldGUYPA so they can b*tch and moan, treat you with some of that "cool northern hospitality", and raise high their communist banners.

"What's that? You don't LIKE paying $994.20 for a measly 1:30 hr plane ride? Oh, but I think you better go fly Southwest or JetBlue.....why we don't WANT folks like you on our "carrier of choice" service! Yes, go and sit with all the great unwashed masses there! We are too GOOD for you, we are too VALUABLE for such a lowly soul as yourself!"

They won't be happy until they have killed US Airways, and start to try to take the unionista attitude to other airlines to kill them as well.


/sarcasm extreme/

El Gato,

Since when has labor decided what the prices of tickets would be? We have met and exceeded the labor costs of WN. As far as Jetblue is concerned, come see me in 20 yrs. and discuss what their labor costs are. They are only going on 4 yrs! Any moron can see their labor costs are lower because they are a baby! WN didn't lay off half their work force after 9/11 leaving only senior employees! Perhaps you should do a little research before you start focusing on labor costs. Perhaps ypu should use some of the intelligence you claim to have to research what the labor costs are compared to non labor costs and post figures instead of opinions. Let me see it in black and white.

My northern hospitality and that of my father and grandfather are what set the standard for livable wages amongst blue collar workers in this country. Why? Because they had the testicals to do it!!!!!!!!!!!!! I would rather have a northerner tell me to shove it and know where I stand than have some of that "sweet southern comfort" stab me in the back.

Tom,

I'm sure you work your fingers to the bone every day of your life. No, actually I think you have a few free lunches and trips at the expense of your company. Meanwhile, while you have me tied up on the phone - you're planning your company trip around the vacation of the rest of your family. What? That Non Stop on Friday will Be $300 more? Oh - who cares - the company is payng for it!!!!!!!!!!!!!! Sound familiar? My thumb is hitting the space key 8 hrs of the day to make your trip as painless as possible. You may have a white collar job but you certainly are not more dedicated nor more intelligent than me. I would dare say you do not work harder than me. As a matter of fact, I would bet my last dollar that you have your thumb you know where more than I do.

 

[TomBascom]

Tom,

I'm sure you work your fingers to the bone every day of your life. No, actually I think you have a few free lunches and trips at the expense of your company. Meanwhile, while you have me tied up on the phone - you're planning your company trip around the vacation of the rest of your family. What? That Non Stop on Friday will Be $300 more? Oh - who cares - the company is payng for it!!!!!!!!!!!!!! Sound familiar? My thumb is hitting the space key 8 hrs of the day to make your trip as painless as possible. You may have a white collar job but you certainly are not more dedicated nor more intelligent than me. I would dare say you do not work harder than me. As a matter of fact, I would bet my last dollar that you have your thumb you know where more than I do.

You're putting words in my mouth.

I didn't say one word about who is more or less dedicated.

I said that that is one way to look at the numbers. It's what some people mean when they say "labor costs are too high". They aren't referring to your paycheck or the rate of pay applied to the hours clocked. They may be implying that you're a lazy SOB. IMHO your most effective counter to that, if you're not a lazy SOB, should be something along the lines of "no, I'm doing it this way because management requires it to be done this way -- I'd be happy to do it a more efficient way..."

 

[TomBascom]

UAL06 I totally agree with your post.....

I am not trying to be rude, but I am curious about something!!! Have any of you have every taken an Economics course? Or do any of you understand the concepts of Elasticity? You may want to read up on these concepts before commenting on why the fares are so high in a market that has only one non-stop carrier servicing it. Believe it or not there is allot of sound reasoning to airline pricing. Why should an airline be any different then any other form of businesses, i.e they are in it to maximize their profits while minimizing their costs. Like any business they are not a charitable organization.

That works when supply and demand are fixed.

But as SWA has shown over and over again when you increase supply and lower prices demand increases dramatically and more money can be made at a lower price point.

The cartel airline model is based on an artifical scarcity that is a house of cards -- one puff from an LCC and it comes tumbling down. That's why it has failed.

 

[El Gato]

That works when supply and demand are fixed.

But as SWA has shown over and over again when you increase supply and lower prices demand increases dramatically and more money can be made at a lower price point.

The cartel airline model is based on an artifical scarcity that is a house of cards -- one puff from an LCC and it comes tumbling down. That's why it has failed.

"Bingo!"

The scarcity exists in many workers minds at the legacy carriers as being based upon a mysterious concept called "class". As in, "Those Southwest flight attendants are SOOOOO unprofessional" or "Why, they don't even have first class! And no in flight entertainment!". Never mind that for almost all respects a seat is a seat. Never mind that US f/a's resemble the old Aeroflot ones, while Southwest is something reminiscent of the 1970's PSA. Never mind the fact that NO customer is expecting "first class service" on a lousy 2 hour flight. And lest we forget, never mind that gouging the customer and playing a shell game with the fares is no way to conduct a good business.


House of cards, indeed.

 

[El Gato]

El Gato,

Since when has labor decided what the prices of tickets would be? We have met and exceeded the labor costs of WN. As far as Jetblue is concerned, come see me in 20 yrs. and discuss what their labor costs are. They are only going on 4 yrs! Any moron can see their labor costs are lower because they are a baby! WN didn't lay off half their work force after 9/11 leaving only senior employees! Perhaps you should do a little research before you start focusing on labor costs. Perhaps ypu should use some of the intelligence you claim to have to research what the labor costs are compared to non labor costs and post figures instead of opinions. Let me see it in black and white.

My northern hospitality and that of my father and grandfather are what set the standard for livable wages amongst blue collar workers in this country. Why? Because they had the testicals to do it!!!!!!!!!!!!! I would rather have a northerner tell me to shove it and know where I stand than have some of that "sweet southern comfort" stab me in the back.

Labor INDIRECTLY influences the cost of the tickets by the amount that the unions demand and win in wages and benefits. Don't believe me? Watch Delta over the next few weeks. Chapter 11 is going to have to be done, because the pilots are literally strangling the profits out of the company, while Airtran and Jetblue are bleeding them to death. Delta can not charge high ticket prices anymore and gouge the customer to support the pilot's huge wages, simply because their competition will not allow them to do so. Match your competitors price or die trying. Well, Delta is matching it, and they are dying in the process, as surely as US Airwys will once Southwest starts in PHL in a few weeks. You have to get the costs down SOMEHOW, because the money coming in will be less and will not cover the expenses for labor.

Do something. Work more for the same pay, and that will go a LONG way towards saving US. Wage concessions may be necessary, but if enough is done on the productivity side, it may not be.

By thw way, you seem to like to say that Jetblue is not going to last..."Come back in 20 years". Well, Jetblue will likely be around in 20 years. They are non union, single fleet type, and WAY more productive and efficient than you. They have the fire in them, what do you got? A whine and sad sack story? A plea for "gimme, gimme, gimme but I don't want to work too hard"? The Jetblue folks are the exact opposite of you. they are working hard and loving it.

 

[JS]

This is a perfect example of what I have been saying all along--there is no reason for such gouging. It is ridiculous.

For the record, I probably have not helped the situation because I have paid this fare before, but I had to be there at a certain time with no time to pre plan. I have also taken the connections because they are 1/3 the price. This is what makes no sense.

From a cost perspective--it's about 530 miles LGA-CLT. at 10 cents a seat mile CASM it costs $53.00 to transport one passenger that distance. I am sure there are or will be $99 fares in the market (or not since there's no competition per se).
If you start at $99 each way (for maybe 10 seats), you have a gross profit of about 50% (doubled your money). If you capped it at let's say $199 or even $249 for a walkup, your margins would still be outstanding. What's more you would see more fares sold in the higher range, meaning the AVERAGE comes up. If you do this systemwide, you will see that the AVERAGE RASM will grow, therefore you make MORE money.

AS did it and they make money. Airtran did it and they make money. HP did it and they make money (or close to it).

Ironically, the UA code share in the same class of service is $200 less!!!!

It has been admitted previously that if the bottom of the fare bucket could be raised by $20 the top could be lowered by $300. So why has it not been done?

I sound like a broken record, but US has the best employees in the business. While the leisure travelers are bargain hunting, I truly believe that MOST (not all but MOST) business travelers would be willing to pay a REASONABLE premium to fly US. The key is you have to offer more--you can't shrink to profitability.

My best to you all............

If USAirways' yield were 20 cents, I would agree with you. However, it's not, which means the high fares on the midweek CLT-LGA itineraries are offsetting the cheapies somewhere else, resulting in an average that can barely keep the company in business.

Should a low cost carrier start flying CLT-LGA, US will have to match and will need more unit cost reductions (on top of PHL).

 

[javaboy]

Requested Flight
Itinerary Total - US$ 994.20 Flight Fare Rules 1 adult at US$ 994.20
5:45am Depart New York, NY (LGA)
7:30am Arrive Charlotte, NC (CLT) Jul. 12

US Airways flight 805 View rules
8:15am Depart Charlotte, NC (CLT)
10:06am Arrive New York, NY (LGA) Jul. 15
US Airways flight 766


of course you could simply drive out to ISP instead of LGA and ride SWA to BWI then connect and go to CLT right i mean GSO no I mean the closest you can get probably RDU then rent a car and drive the remaining 3 hrs.

prime time, nonstop always going to be the most expesnive is there a point to that? is it high? maybe whats the cost of driving the entire trip? food hotels? or is time more the consideration. Air travel pricing is commodity based. you can not create it and the store it on the shelf and then discount it later. the moment you create the product it is consumed so you must accurately guage your pricing vs demand months ahead of time even though weather and other events could effect it.

just an observation not so much a comment

just did same search

the price was has posted just about 995.00 with this immediately under it

Alternate flights for these dates as low as: US$ 353.40

Itinerary Total - US$ 353.40 Flight Fare Rules
1 adult at US$ 353.40

8:59am Depart New York, NY (LGA)
12:57pm Arrive Charlotte, NC (CLT) Jul. 12
US Airways flight 3043 operated by US AIRWAYS EXPRESS-CHAUTAUQUA AIRLINES/ 897 Connection in Greensboro/Highpoint, NC View rules

9:20am Depart Charlotte, NC (CLT)
12:59pm Arrive New York, NY (LGA) Jul. 15
US Airways flight 2524 operated by US AIRWAYS EXPRESS-PSA AIRLINES/ 3165 operated by US AIRWAYS EXPRESS-CHAUTAUQUA AIRLINES Connection in Greensboro/Highpoint, NC

 

[Art at ISP]

JS,

Although in theory you have a point, its still no excuse. I think most business travelers who pay those fares resent having to subsidize the once a year or once a lifetime flyers who pay those ridiculous fares.

Also, if the fares were rationalized across the system, the AVERAGE fare paid would increase, thereby increasing OVERALL revenue. This has been proven to work at other carriers--ie. AS, HP, and some of the LCC's.

I also do NOT advocate matching all of the lowest fares. I think it would be okay to be $10-$30 more each way, assuming that the service provided is better (but that's another issue).

The thought of connecting on 2 jungle jets and adding time to the trip is ludicrous--what if there's a misconnect? The cost to the company is certainly more to board the same passenger on two flights, and the actual CASM For the jungle jets is more than for a large airplane.

There certainly are pros and cons, but it appears that the system favors the vacation flyer. The fare system is broken and it needs to be fixed...PERIOD..