A Viable Approach To Concessions...

[RWerksman]

ELP_WN suggested copying Southwest's fare structure. That means changing US Airways into a LCC.

You can't have a hub-and-spoke carrier with international service, service to small cities, and a decent frequent flier program (e.g., complimentary upgrades) with nothing but Southwest fares. It won't work unless the employees become volunteers.

You can match LCC fares (after all, it is post-1978), subject to availability, but it is not necessary to shoot yourself in the foot and sell every seat in every market for $99 or so.

Who said anything about just "copying" Southwest's fare structure? I believe the quote was "making it more rational." $49 this flight, $99 that flight just wont work, BUT when you modify it accordingly taking into consideration the additional services that U offers, you have something that I would call quite rational.

In addition, a rational fare structure alone does not make a legacy, hub-and-spoke, full service airline a LCC. With that in mind, I didn’t see anything about eliminating the "hub-and-spoke" or "full service" part of U.

With that in mind, I ask again, how again did he suggest making U a LCC?

 

[C54Capt]

WN,
I didn't mean to imply that U should convert it's model to that of WN, F-9 or B-6, rather emphasize its attributes as a World Class Carrier. All airlines can not be all things to all people, yet U and UA namely continue to try to emulate the LCC model while taking their eye off the ball of their true strengths. That is to say they are playing the game without the right cost structure. The domestic market is going to be a low margin dog fight for the foreseeable future, so why fight a fight that is not worth winning, especially when you can't win it. Align with the LCCs and regionals to do your dirty work and concentrate on doing what you can do well, which is long-haul and international. The days of "loss leader" routes are too expensive to maintain and silly to defend.

 

[RWerksman]

My suggestion that you do that was not to generate revenue or to be punitive. However, if management is bumping a fare paying passenger out of any cabin it's a bad thing. No, my recommendation that you stick the bigwigs in Y is TO LET THEM KNOW WHAT GOES ON IN THE REAL WORLD. Far too often people get isolated in their own little world, and they forget what things are like where the little people live. And it is the little people that will make or break any service-oriented industry. There are not enough people out there willing to pay F fares and buy club memberships to keep your company afloat. If your company is to survive, it will survive based solely on the patronage of the regular folks in the main cabin.

Sticking management with cheapie per diems and cheap hotels when they are on the road amounts to a drop in the bucket. US Airways needs substance, not fluff.

There is no substitute for leaders setting the example, regardless of what business you are in. The amount saved is inconsequential....the fact that employees could see that their leaders (as opposed to managers) care enough about salvaging their ailing company to make a few personal sacrifices would speak volumes. Perhaps this is a genetic thing....... In places where the per diem cap is $99 for lodging I am quite content to sleep in a $60 room at LaQuinta......when I could get an intermediate car I opt for the ever-popular Dodge neon for $25 if it will do what I need it to. Whether its a drop in the bucket or not, money I don;t spend when i don't need to is money I will have to spend on something perhaps more worthwhile later.

Okay, I will let this set for a while and watch people debate/deride my commentary (not to mention character flaws). I do have to leave you with one cogent idea, one that for whatever reason airline management just cannot seem to get through their thick skulls: FEED THE RICH AND GROW POOR, FEED THE POOR AND GROW RICH.

If I could be so bold to add something in here:

Why not book all managment in coach, and then have them all earn FF miles like the rest of America? When they have enough miles or segments to qualify for perferred status they can request to be put in the queue to be upgraded.

 

[Light Years]

Hope you can change and be YOURSELF and not someone else. That is what makes a good identity and what makes people remember! But who knows. This world of gotta have it now, silicone implants and plastic surgery USAirways may be the next candidate on SWAN!

Actually, its funny you bring that up as the girl who lost on The Swans first episode was a US Airways F/A. Like they do to everyone, they made her look like an old drag queen in a tacky 80s gown.

She didnt win because they said she had zero self-confidence in herself. Go figure! In other words, she's Jerry Glass's ideal airline employee.

 

[PITbull]

Okay, so your topped out 14 yr flight attendant drops to 9.1 yrs of seniority and is no longer topped out.......

We need an "early out" in order to save the junior work force. It is in the best interst of the company and the f/as.

Folks want out. Mangement needs to offer an "early out" sooner rather than later.

That's what it will take.

The reserve system MUST go back to seniority order. ASAP. That will start the ball rolling. Short of that, we will all be in the unemployment line including USA320.

Management hired a legal consultant form "FORD AND HARRISON" to be at the bargaining table. Union busters dejore. This will cost them votes.

Bad, bad move on mangement's part.

 

[Light Years]

Management hired a legal consultant form "FORD AND HARRISON" to be at the bargaining table. Union busters dejore. This will cost them votes.

Bad, bad move on mangement's part.

Aint that the truth... talk about cutting off your own nose. This just shows that the whole "working together" stuff is the same old crap. They just lost any vote they had from people on the borderline, if there was any.

 

[deltawatch]

FORD AND HARRISON LINK

 

[ELP_WN_Psgr]

mweiss, if you're out there...that Ford & Harrison nonsense ought to tell you everything you need to know about what i think about the managers (they cannot be called leaders) of USAirways.


Instead of spending money retaining people to assist you in screwing your employees, they would be much better served to try and figure out how to take the airline they have, and with the employees' help, restore it to profitability.

Obviously, that isn't the goal. Duh.

And to those who will argue that the management is well within their rights to retain Ford & Harrison....that they need thislegal advice to assist them in doing things right.....I would tell you that if management would do the right thing, they would not need to worry at all about whether or not they were doing things right.

Some management wanted to paint the planes and sell/merge the airline.

Looks to this casual observer that the current folks-in-charge want to break the backs of employees and sell/merge the airline.

Ever notice how pretty much everything in life turns into a self fulfilling prophecy? You treat your employees as valued members of an organization, and they bust their tails for you. Treat employees as assets, they become assets. You treat your employees as liabilities, they turn into liabilities.

 

[700UW]

ELP WN for CEO!

 

[ual777fan]

I second that

 

[JS]

Originally posted by ELP_WN_Psgr:

You can't have a hub-and-spoke carrier with international service, service to small cities, and a decent frequent flier program (e.g., complimentary upgrades) with nothing but Southwest fares. It won't work unless the employees become volunteers.

I don't believe that. However, I will agree wholeheartedly that you cannot be all things to all people. Rather than a network carrier, capable of hauling people from Zanesville, OH to Rutland, VT.....U might do very well to focus themselves on flying to and from places where there are adequate volumes of people to generate traffic at the prices the market will bear. See, that's where the real balancing act is. Going places where there are enough passengers to pay a price which, when multiplied by the number of pasengers, exceeds the cost of generating the passenger revenue.

In other words, be just like Southwest. Sorry, that is just not going to work.

You can match LCC fares (after all, it is post-1978), subject to availability, but it is not necessary to shoot yourself in the foot and sell every seat in every market for $99 or so.

This is where everyone got silly. In fact, I would be the first to suggest that USAirways ought not sell every seat for $99. WN sure as heck doesn't. If you read airliners.net....they are constantly derided for being deceptive in that CO, UA, AA (fill in name of favorite legacy carrier) has lower fares. Where WN makes their money is by selling a lot of walkup tickets at prices that don't cause passengers to come down with a case of the vapors (or worse). But $954 RT between Buffalo and Philadelphia is not going to cause passengers to say "to heck with the car, let's fly up there this weekend." That's the real deal - the walk up fare ought to be higher than your el cheapo fare. The walk up fare ought to be at a level that puts some money towards the bottom line. But setting sky high prices does nothing for you if it scares passengers away from the airplane and in to the automobile.

What is your point? Let's say $200 should be the walkup fare for PHL-BUF. How many idiots out there would pay $800 for a spur-of-the-moment weekend for two? It can't be that much less than the number of people who pay $954 roundtrip for one person. $800 is an absurd amount of money to spend on a weekend getaway like that.

If you want US Airways to charge a walkup fare of $76 (the same as WN BWI-BUF), once again that means you want US Airways to be just like Southwest, and that will not happen.

By the way, even at $76 walkup, a weekend trip for two will cost around $340 for two people including tax. $340 just for travel is a lot of money considering that Niagara Falls will still be flowing long enough for one to plan a little better than that.

By the way, ELP, the suggestion that management ride space available only in economy is ridiculous. It's SPACE AVAILABLE. That means it costs the same to sit in First or Coach -- nothing.

My suggestion that you do that was not to generate revenue or to be punitive. However, if management is bumping a fare paying passenger out of any cabin it's a bad thing. No, my recommendation that you stick the bigwigs in Y is TO LET THEM KNOW WHAT GOES ON IN THE REAL WORLD. Far too often people get isolated in their own little world, and they forget what things are like where the little people live. And it is the little people that will make or break any service-oriented industry. There are not enough people out there willing to pay F fares and buy club memberships to keep your company afloat. If your company is to survive, it will survive based solely on the patronage of the regular folks in the main cabin.

Space available means they will not bump a fare paying passenger.

I would recommend coach travel for someone whose job is to observe the coach experience on US Airways, for obvious reasons. If management is flying somewhere for some other reason, what good does it do for him to fly in coach if there is an empty seat in F?

What about employees? Shouldn't they be required to fly space available only in coach as well? It seems silly to have an hourly worker in F when the boss is in coach.

What if coach is full but F is not? Your idea is just not as simple as it sounds, and I don't think it would do any good.

I say that if the employees were to agree to concessions because management flies only in coach, they are stupid. You don't agree to concessions unless you NEED to. Right now they NEED to, and it has absolutely nothing to do with which cabin management sits in when riding space available.

 

[ktflyhome]

ELP WN for CEO!

I second that. ElP WN is SMART.

 

[RWerksman]

Let's say $200 should be the walkup fare for PHL-BUF. How many idiots out there would pay $800 for a spur-of-the-moment weekend for two? It can't be that much less than the number of people who pay $954 roundtrip for one person. $800 is an absurd amount of money to spend on a weekend getaway like that.

If you want US Airways to charge a walkup fare of $76 (the same as WN BWI-BUF), once again that means you want US Airways to be just like Southwest, and that will not happen.

I think his example could have been better. How about this one:

I needed to go last second from PIT to PHL. The fare was nearly $1000. I drove -- 5 hours. If the fare was $400 R/T, I would have flown. When someone looks at your expense report, there is a big different between $400 and $1000(ish). U lost my $400 -- if you want to look at it that way.

A rationalized fare structure, with and emphasis on the mid-range fare would be a good thing -- for everyone.

 

[mweiss]

ELP,

Nice post. Overall, I'm in agreement with you. Just one thing:

Concessions do not start until not less than 30 days after management has done everything on their list.

Serious question: do you think there's enough runway left to wait until 30 days after the whole list has been completed? Moving HQ alone would take many months and eat up precious short-term revenue. I think it's the right thing to do, but I think you may be asking for too many dollars to be spent before the concessions.

As a counterproposal, what if the terms were put into the contracts, along with snapbacks if deadlines aren't met? It'd still show how serious they were, and buy time at the same time. Yes, they could violate the contract, and yes that could screw the employees, but it beats trying to initiate all of those changes (which do cost money up front to implement) without a corresponding short-term cost reduction.

 

[mweiss]

By the way, ELP, the suggestion that management ride space available only in economy is ridiculous. It's SPACE AVAILABLE. That means it costs the same to sit in First or Coach -- nothing.

Depends. When they fly in First SA, do they get the seat before or after the CPs get their upgrades? If it's before, then the cost, while zero in short-term dollars, is greater than zero in the long run.

Sticking management with cheapie per diems and cheap hotels when they are on the road amounts to a drop in the bucket. US Airways needs substance, not fluff.

That's precisely the argument management uses to not give anything up. Sometimes it's about giving something to spread the unwealth around.