Allowing Bk Carriers To Destroy The Industry

[mweiss]

You contend that Airline travel (specifically leisure) demand is elastic in all ranges.

It is...

Saying that the price elasticity of demand for leisure travel is elastic is by definition saying that an X percent decrease in fares would result in a LARGER increase in demand, thus raising revenue.

Oy. And you claim that Nicholson would be shaking his head at me? A decrease in fares would result in a larger quantity demanded. It may or may not result in increased revenue, depending on how elastic (i.e., the specific value of the coefficient of elasticity) the demand is. I went over this in great and gory detail on a lengthy thread in the AA board.

you statement that that is true for ALL ticket price ranges would imply that it is your belief that if fares were $2.00 for a transcon flight, lowering the price to $1.00 would double demand.

Um...no. Where did I provide the value for the coefficient of elasticity? I must have been posting in my sleep again.

 

[Red Tail Bear]

Like we haven't give and done what we need to do....34% paycut 8% aycut, 18% paycut, no pension, 1900 furloughs, reduced health benefits, revamped the schedule....your right we haven't done anything.....wait, your in round one!!!!

You'll soon see how your "Brothers" there at DAL will do...I hope you wish your codeshare buds the best to~~~~~I know you'll be pulling for them!

[post="257354"][/post]​

And yet your still in BK with no end in sight. What seems to be the problem? What steps will you take next to avoid going under?

 

[Busdrvr]

It is...

Oy. And you claim that Nicholson would be shaking his head at me? A decrease in fares would result in a larger quantity demanded. It may or may not result in increased revenue, depending on how elastic (i.e., the specific value of the coefficient of elasticity) the demand is. I went over this in great and gory detail on a lengthy thread in the AA board.

Um...no. Where did I provide the value for the coefficient of elasticity? I must have been posting in my sleep again.

[post="257486"][/post]​

Sorry for the hijack, BUT......

No offense, but I hope you didn't waste an entire string on the AMR board looking foolish. In the future, you might want to look up your terms. You are apparently confusing PERFECT elasticity with relative elasticity. The widely used economic convention is to term anything with an e > 1 as elastic and e < 1 as inelastic

I consider this stuff econ 101, but here's a reference from an econ 202 course. note on, I think, page 67 or 68 of the text were it clearly states that when PED is INELASTIC, revenue moves in the SAME direction as price. When PED is ELASTIC (e > 1), revenue moves in the OPPOSITE direction as price. You're not supposed to forget this stuff so soon after graduation


http://www.econ.ilstu.edu/lcarlson/105webp...xt/Chapter5.PDF

"When the elasticity coefficient is between zero and one, demand is inelastic. Consumers are relatively insensitive to price changes. Examples of goods and services for which demand is inelastic include electricity, clothing, and medical care. When the elasticity coefficient is greater than one, demand is elastic. Consumers are relatively sensitive to price changes. Examples of goods and services for which demand is elastic include china and glassware and restaurant meals.


Referring to the definition of the price elasticity of demand, when demand is inelastic, i.e., when ed < 1, the percentage change in quantity demanded is smaller than the percentage change in price. This means that the change in price has the greater effect on total revenue. Consequently, when demand is price inelastic, total revenue moves in the same direction as price and in the opposite direction of quantity demanded. This result is illustrated by reference to Figure 5.3. Between points A and B, and C and D, demand is price inelastic. As such, when price decreases from $19 (point A) to $18 (point B), total revenue declines from $79,040 ($19 x 4160) to $76,680 ($18 x 4260). In a similar fashion, when price decreases from $6 (point C) to $5 (point D), total revenue decreases from $30,960 to $26,300.
On the other hand, when demand is elastic, i.e., when ed > 1, the percentage change in quantity demanded is larger than the percentage change in price. This means that the change in quantity demanded has a greater effect on total revenue than the change in price. Consequently, when demand is price elastic total revenue moves in the opposite direction of price, and the same direction as quantity demanded. "

 

[Flufdriver]

Maybe there is some thruth in the "Northworst" nickname.....

Posted on Tue, Mar. 15, 2005





Northwest ranked last in customer satisfaction

Associated Press


ROMULUS, Mich. - Northwest Airlines ranked last in overall airline customer satisfaction among major U.S. air carriers, according to an annual study by J.D. Power and Associates.

JetBlue Airways came in first in the study, based on responses from about 2,600 passengers who flew on a major U.S. airline between May and October 2004. J.D. Power released the results Monday.

We're in BK and still did better then last...sin doctor we need your spin here~~~~lI'm impressed!

 

[North by Northwest]

Boy, you sure are a bright one. You just stay focused on being around to be ranked. Keep trying...you might learn where the U.S. is located on the map. That little ranking sure is gonna get you some life or death financing...Come back when you are on an RJ layover and we'll talk. (noticed you left Us ranking out) snicker. Jetblue-783, U-639 , NWA-618. WoW! Looks like U is really moving up in the biz. For an airline on life support one would think they would be neck and neck with the top. But then again U Fluffy is a prime ecample of why it will never happen.

 

[mweiss]

The widely used economic convention is to term anything with an e > 1 as elastic and e < 1 as inelastic

Apologies for the quibble on definition. I didn't expect you to be using the e=1 dividing line, though it is, indeed, commonly used among economists.

That being the case, your argument is one of semantics, and we agree on the principle. The coefficient of elasticity is most certainly less than 1 at many price points for all demand modes.

 

[North by Northwest]

Hey now Mr. Weiss and Bus...you two cannot have a serious adult discussion about economics, while a highly important rant regarding the location of DTW and MSP is ongoing. There is NO room on here for that kind of mature behavior!

 

[NWA/AMT]

Looks like things are going great there by the way...a little piece from a recent article...[/color]

[post="257443"][/post]​

I find it interesting that so soon after complaining about people from other airlines wishing those in bankruptcy ill, you are gloating about others, people who have done you no wrong, being in a similar situation.

I have long been on record here as supporting the employees of the bankrupt carriers, but from this point on you can consider that to exclude you.

 

[North by Northwest]

"A Delta spokeswoman said the carrier made the about-face because "We're trying to remain competitive with the rest of the industry." She declined to elaborate.

But Jamie Baker, a J.P. Morgan analyst, said in a research note Monday that Delta may have made a mistake, leaving hope the latest increase would hold. Baker contends that Delta saw Northwest Airlines (NWAC:Nasdaq - news - research) cancel an overnight stay requirement and incorrectly interpreted it as a cancellation of the fare increase.

"As such, we maintain a high level of confidence that this increase will eventually stick by week's end," Baker wrote. His company, J.P. Morgan, does business and seeks to do business with companies covered in its research reports.

A Northwest representative declined to comment on Delta's move but said Northwest had kept the fare increase in place even after Delta and Continental opted out.

round four.

 

[Flufdriver]

Your absolutey correct, U should go out of business, we are a terrible carrier, have NOTHING to offer the flying public, employees SHOULD all lose the jobs because of management and there pathetic business plan. Gee N by NW, Im really starting to see the light. I apologize for my stupidity, what was I thinking. Man, I'm glad you snapped my into reality. We all can't fly for NW. Cal has no right doing business, Kmart, shame on you. Thank you NW for making me see the light. (how am I doing, I haven't used the = sign by mistake yet, that was important). When we go out of business, and no fault by not one of 40,000 employess here at U, I'm sure you will be happy and feel good about the situation....If it does, I'll accept it and hopefully go out and get a real job with a real company....gee, maybe someday I'll have the pleasue of maybe being the wing walker for your pushback. I would consider that a great honor! Right now, at NO fault to me the situation we are in, I'm simply trying to pay my mortgage and car notes.

Unlike you, I hope we ALL get through this spiral and get the industry back on track. Stop giving the product away. You and I both been in the industry long enough to know why things are the way they are.

Good luck to all, we know you can't make money with fuel that way it is and LCC's overlapping route systems with $39 fares.

Again, I apologize for mis-spelled words and any use of the = sign by mistake noted by a very keen NW employee. It's really hard to be perfect! I guess that's why I initally wasn't hired by NW. I figured landing at the correct airport was far more important then the correct use of the = by mistake. That's why I wasn't hired years ago. Afer all, we all have landed at the wrong airport..well, maybe not. Only kidding ya know!! Don't take it serious! Only kidding...don't go off on a long tangent, OK!!

Hey, now that we're ol' buds, when U goes out of business, and we deserve to..maybe you can put in a good word for me at NW. 22 years experiece, 25,000 hrs, DC-9, MD-80, B-767/757 A319, B737.

Drop me a PM when that happens and I'll be more then happy to forward you an updated resume!


Again, soon we will be out of your hair, you'll be happy and all will be good!

Flufdriver...

 

[North by Northwest]

"I figured landing at the correct airport was far more important then the correct use of the = by mistake. That's why I wasn't hired years ago. Afer all, we all have landed at the wrong airport..well, maybe not." Forget about landing at the right airport...just stay out of the water. Planes were ment to fly not swim. At lest NWA pax don't have to travel with life vests when landing at LGA. NWA runs rings around you sparky. Just so you don't let that little JD Power quip go to your head. #1 for on time Dept. '04=NWA, #1 for most(around the world) self service ck-in Kiosk= NWA, #3 for on time Arr 04=NWA. What is important to MOST business flyers is to leave ON TIME and arrive ON TIME. Someting Northwest does and has done with EXCELLENCE for DECADES. "40,000 employess here at U," It's 26,000 max., stop exaggerating. U nor Ual "deserve" to go out of business when it is doing the right thing for it's employees and retirees. They DO deserve to go out of business when both companies operate in a manner that suck the rest of the industry down a black hole. Neither have exited BK and operated on a fair playing field. They continue to contribute to the depression in wages for the industry( along with LCC's, oil, over cap). Well, lets see. I'll take back what I said. Let U/ Ual stay in BK for as long as they want. Let them continue to return again and again to the employees for pay cuts (we'll just have to match them wage for wage) that will be the only way to stay out of BK and pay our bills. Yeah, that sounds real fair. I love facing BK wages when we've sacrificed to stay out of BK. Gotta love those dumb-a$$ "me too clauses".Maybe there is some thruth in the "Northworst" nickname...far less than in "US Scareways"

 

[Red Tail Bear]

Your absolutey correct, U should go out of business, we are a terrible carrier, have NOTHING to offer the flying public, employees SHOULD all lose the jobs because of management and there pathetic business plan. Gee N by NW, Im really starting to see the light. I apologize for my stupidity, what was I thinking. Man, I'm glad you snapped my into reality. We all can't fly for NW. Cal has no right doing business, Kmart, shame on you. Thank you NW for making me see the light. (how am I doing, I haven't used the = sign by mistake yet, that was important). When we go out of business, and no fault by not one of 40,000 employess here at U, I'm sure you will be happy and feel good about the situation....If it does, I'll accept it and hopefully go out and get a real job with a real company....gee, maybe someday I'll have the pleasue of maybe being the wing walker for your pushback. I would consider that a great honor! Right now, at NO fault to me the situation we are in, I'm simply trying to pay my mortgage and car notes.

Unlike you, I hope we ALL get through this spiral and get the industry back on track. Stop giving the product away. You and I both been in the industry long enough to know why things are the way they are.

Good luck to all, we know you can't make money with fuel that way it is and LCC's overlapping route systems with $39 fares.

Again, I apologize for mis-spelled words and any use of the = sign by mistake noted by a very keen NW employee. It's really hard to be perfect! I guess that's why I initally wasn't hired by NW. I figured landing at the correct airport was far more important then the correct use of the = by mistake. That's why I wasn't hired years ago. Afer all, we all have landed at the wrong airport..well, maybe not. Only kidding ya know!! Don't take it serious! Only kidding...don't go off on a long tangent, OK!!

Hey, now that we're ol' buds, when U goes out of business, and we deserve to..maybe you can put in a good word for me at NW. 22 years experiece, 25,000 hrs, DC-9, MD-80, B-767/757 A319, B737.

Drop me a PM when that happens and I'll be more then happy to forward you an updated resume!
Again, soon we will be out of your hair, you'll be happy and all will be good!

Flufdriver...

[post="257755"][/post]​

Whats wrong Fluf are things to dismal over on the US board.

 

[Red Tail Bear]

"I figured landing at the correct airport was far more important then the correct use of the = by mistake. That's why I wasn't hired years ago. Afer all, we all have landed at the wrong airport..well, maybe not." Forget about landing at the right airport...just stay out of the water. Planes were ment to fly not swim. At lest NWA pax don't have to travel with life vests when landing at LGA. NWA runs rings around you sparky. Just so you don't let that little JD Power quip go to your head. #1 for on time Dept. '04=NWA, #1 for most(around the world) self service ck-in Kiosk= NWA, #3 for on time Arr 04=NWA. What is important to MOST business flyers is to leave ON TIME and arrive ON TIME. Someting Northwest does and has done with EXCELLENCE for DECADES. "40,000 employess here at U," It's 26,000 max., stop exaggerating. U nor Ual "deserve" to go out of business when it is doing the right thing for it's employees and retirees. They DO deserve to go out of business when both companies operate in a manner that suck the rest of the industry down a black hole. Neither have exited BK and operated on a fair playing field. They continue to contribute to the depression in wages for the industry( along with LCC's, oil, over cap). Well, lets see. I'll take back what I said. Let U/ Ual stay in BK for as long as they want. Let them continue to return again and again to the employees for pay cuts (we'll just have to match them wage for wage) that will be the only way to stay out of BK and pay our bills. Yeah, that sounds real fair. I love facing BK wages when we've sacrificed to stay out of BK. Gotta love those dumb-a$$ "me too clauses".Maybe there is some thruth in the "Northworst" nickname...far less than in "US Scareways"

[post="257776"][/post]​

Now thats funny

 

[Dizel8]

I suppose boys will be boys, but man it is getting ugly in here!

 

[North by Northwest]

Dizel 8...I'm sorry. I will shut up on this subject. h34r: