And You Want Bethune?

[CaptBud330]

Gordon Bethune, Continental's chairman and chief executive, said in a news release Tuesday night that the company would have to seek "significant wage and benefit concessions and furloughs" to survive if the fare increases are not successful in buffering fuel costs.

 

[700UW]

Move to CAL thread, nothing do with US

 

[Oneflyer]

Why is this concept hard to understand?

You can not run a business that has costs that excede revenues.

 

[Light Years]

Or just a business that simply cannot make any revenue no matter what. The industry model has to change, theres simply no way this country can expect international and podunk service at LCC fares. It simply cannot be.

 

[traderjake]

Move to CAL thread, nothing do with US

You can't possibly be serious.

If you are there is no need to take serious anything you say.

 

[FlyingHippie]

Move to CAL thread, nothing do with US

700UWvDon't be a board nazi now h34r: Airlines are getting to be like West Virginia..it's all relative. Sorry..

 

[mweiss]

theres simply no way this country can expect international and podunk service at LCC fares. It simply cannot be.

My kneejerk reaction was to agree with this statement, but I'm not so sure it's true. If the rise of the LCCs has taught us nothing else, it has taught us that more than one business model can succeed in that space.

What do HP, WN, FL, F9, TZ, and B6 all have in common, besides being lumped into the category of LCC?

 

[robbedagain]

you also cant have mgmt that lies to the employees and steals more money from the employees just toreward themselves for a job well screwed up either

 

[MrAeroMan]

Move to CAL thread, nothing do with US

Zeig Heil der Furher.

 

[Pragmatic]

robbedagain,

Why do we have to blame everything on Management. Is that the easiest excuse for us to ignore the reality of this industry. We have to realize that the inefficiencies in this Airlines have built over a long time (all aquisitions, stupid decisions such as making PIT a hub, metrojet, UA merger attempt, etc,.). For one managment team to be the cause of all this mayhem is in fact saying that they have all power in the world, which can not be true.

Thanks

 

[ITRADE]

Move to CAL thread, nothing do with US

Reality sucks, doesn't it 700?

 

[LaBradford22]

My kneejerk reaction was to agree with this statement, but I'm not so sure it's true. If the rise of the LCCs has taught us nothing else, it has taught us that more than one business model can succeed in that space.

This is an interesting debate that I've had many times with co-workers and other business associates of mine. The point that I always come back to is that, while the WN model is great for point-to-point domestic service with a low fare, it is not a comprehensive transportation system model. I don't think Americans would be very happy if every airline suddenly adopted the WN model. Service to smaller cities would vanish, because point-to-point scheduled service with a B737 is simply not economically feasible there. International service would vanish, because flying internationally violates the WN model (actually, what would happen is that in order to fly internationally, you would have to get on an international carrier, like BA or LH or QF or KL or CX - come to think of it, that might not be all bad). Still, I don't envision a US air transportation system that consists only of no frills point-to-point domestic only B737 flying. For that reason, LCCs and legacy carriers can coexist. The problem is, right now there is simply too much capacity out there - in particular, there are too many legacy carriers. One or two of them will go away in the next ten years, IMHO.

What do HP, WN, FL, F9, TZ, and B6 all have in common, besides being lumped into the category of LCC?

I don't know. These carriers have some significant operational differences. WN is a single fleet; HP, F9, FL, and TZ are not; B6 is today but won't be in the near future. WN operates primarily point-to-point (although they do connect a fair % of their passengers), so does B6 (their model today is JFK point-to-point, although JFK could evolve into a sort of mini-hub); on the other hand, HP, FL, F9, and TZ all operate what amounts to connecting hubs (in fact, FL and F9 in particular are very directly taking on a legacy carrier at one of their own hubs). I give up. What is it that all six have in common, aside from being dubbed LCCs?

 

[mweiss]

LaBradford,

It's not a trick question, really. Just about the only things that they have in common, as far as I can see, are RASM below 9c and CASM below 8. Other than that, none offer transoceanic flights.

It reinforces my point, however, that one doesn't have to have a legacy cost structure to provide legacy-like offerings.

Let's look at it another way. What differentiates all LCCs from all legacy carriers? Here's a list of what doesn't differentiate them:
- First class seating (HP, FL, and TZ offer it)
- Food (HP offers BOB, so do NW and US)
- Assigned seats (only WN doesn't offer that)
- Large number of domestic routes (WN offers far more than US)
- Formed after deregulation (WN predated dereg by the better part of a decade)

 

[javaboy]

maybe things are worse than people are willing to accept?

no other INDUSTRY has been hit harder in this post 9/11 recession than the airlines.

just an observation

it seems to me that the industry players that have "all the problems" seem to be the legacy carriers while the "Lcc" carriers make the money?

well the common thread is the business models. LCCs have one Legacy's have another during this down turn the LCC model wins during other times the Legacy wins. this recession particuarly for the airlines is longer and harder than in anytime an previous history.

LCCs wont take over the world, Ride WN to HNL or LHR not gonna happen, while the traveling public wants the low fares of the LCCs yet the infrastructure that only the Legacy's can offer. there is a medium it will be found. WN started in TX and yet AMR has coexsisted with them for over 30 years.

you can fight over the same pie and the pieces get smaller, or you can increase the size of the pie. go where the LCCs cant go offer things the LCCs can not offer with out increasing their costs. THEN sell those points tell people why you offer more what they are getting for their travelling dollar.

Think about it UAL in BK, DAL threating BK, CAL talking about more cuts, AMR avoided BK 2 times with lawyers on the court steps ready to file last year. UAIR no need you people have lived it. Can you just allow for the fact that maybe things really are that bad cost wise (i dont mean wages) fuel costs soaring and people wanting to squeeze every last travelling dollar means less gross coming in.

the good news is, its a math problem and all math problems are solvable.

 

[mweiss]

no other INDUSTRY has been hit harder in this post 9/11 recession than the airlines.

Spoken like someone outside the technology sector. <_<

the common thread is the business models. LCCs have one Legacy's have another during this down turn the LCC model wins during other times the Legacy wins.

I'll ask again...what is the "LCC business model?" We can't even build a reasonable list of the common features of the LCCs! Furthermore, we don't know whether the legacies will do better than the LCCs in the next boom. FL and F9 were getting their acts together, B6 wasn't even flying yet, and TZ was trying to change their entire business focus during the 1990s. We don't know how well these airlines will do during the next boom. The only thing we can say with reasonable certainty is that WN's business model does less well during booms than the legacies'.

LCCs wont take over the world, Ride WN to HNL or LHR not gonna happen

That's right, nobody would fly a LCC to HNL. Oh, wait, hasn't AQ been doing a fine job taking people to HNL from the west coast? TZ too. Hmmm...maybe we shouldn't write the longer haul LCC flights off just yet.

while the traveling public wants the low fares of the LCCs yet the infrastructure that only the Legacy's can offer.

Who says they're mutually exclusive? And what exactly is this magical infrastructure? Sure, international flying is important to a segment of the population, but what do you think the result will be when one of the smarter LCCs starts flying overseas? As you can see from my earlier list, it's much harder to describe the characteristics of "LCC" than it is "legacy" (no easy term to describe either).

go where the LCCs cant go offer things the LCCs can not offer with out increasing their costs. THEN sell those points tell people why you offer more what they are getting for their travelling dollar.

I agree with you overall, but nothing the legacies are offering right now justifies twice the price, let alone the frequent 5x+ price differential between the two categories.

the good news is, its a math problem and all math problems are solvable.

Sometimes the solution is null, however.