Cheap Seats

[BoeingBoy]

2-Day Florida Sale

Anyone know if this is a response to another carrier's sale (I haven't seen any) or just trying to get revenue in the slow period between Thanksgiving and Christmas?

Jim

 

[Harry Callahan]

Jim:
Another reason we are loosing our "you know whats"
Makes zero sense to me

 

[BoeingBoy]

Looks like Airtran is having a 1-day sale that's a lot more extensive....

Airtran Press Release

Jim

 

[sfb]

AirTran's one-day sale is only on non-stop routes, though, and the pricing is generally less aggressive. They're charging $69 for MCO-PHL (each way) while US is charging $39 each way for the same route. Note, however, that AirTran's sale fares run through the beginning of February while US's only run through mid-December.

It does (to me, at least) look like an attempt to pump up revenue during the slow weeks between Thanksgiving and Christmas. I can only imagine that advance bookings to Florida have been somewhat weak.

 

[Dea Certe]

Could it be sorta like a "rent party"? Anyone ever go to one back in their school days? The rent was due shortly and there wasn't enough money to make it, so the tenants would throw a party, with a small admission fee. Free beer and a few wine boxes along with a bunch of friends willing to donate $5 to make sure no one got evicted. Well, at least not for non-payment of rent!

Might be a way to grub up some money to keep the doors open a while longer. 😛h34r:

Dea

 

[BoeingBoy]

Dea,

My guess is that you've figured out the secret. Right now we're surviving on cash flow, and doing anything to keep the cash flowing in and to keep it from flowing out.

Jim

 

[genejockey]

I just bought 2 tickets for my parents to fly from West Palm Beach to Philly = $97 each including all fees. Southwest was $156 each for a more inconvenient flight schedule.

 

[USA320Pilot]

The sale is likely to boost revenue and put passengers in the seats due to people "booking away" from the airline due to bankruptcy concerns. This will help obtain passengers, but revenue is still too low.

Regards,

USA320Pilot

 

[BoeingBoy]

FWIW, the yields are between 3.8 and 4.9 cents on these fares. That's assuming either nonstop or most direct 1-stop (connecting). That puts the yield at or below the direct operating cost, assuming the more efficient aircraft of the fleet.

Jim

 

[sfb]

I'll add that no one else seems to be in a real big hurry just yet to match US Airways' sale fares. Some of these fares are even lower than the September fire sale. Of course, no one seems to be matching FL's one-day sale yet, either, so it may be just a matter of time before the fares get loaded.

It's amazing how quickly they can load fares for a fire sale, but how long it takes to roll out GoFares...

 

[JS]

FWIW, the yields are between 3.8 and 4.9 cents on these fares. That's assuming either nonstop or most direct 1-stop (connecting). That puts the yield at or below the direct operating cost, assuming the more efficient aircraft of the fleet.

Jim

[post="199258"][/post]​

Yield is revenue per revenue seat mile. Assuming US Airways is limiting the number of seats that can be sold at these fares, the revenue for one flight divided by the airplane's revenue seat miles is not going to be below 5 cents.

 

[BoeingBoy]

JS,

True, the RASM is total revenue for the flight divided by total seat miles. If enough people pay high enough fares, the flight can still be profitable (or less unprofitable). In other words, are we talking about average yield for the flight, or specific yield for a passenger that pays this specific fare - and I was talking about specific yield.

My only point is that these fares are FAR below the cost of transporting the passenger that buys at this fare and below the cost of actually moving the seat not counting all the other costs. These fares are about 50% below GoFares.

Jim

[Edit that first sentence to say Revenue per revenue passenger mile is total revenue divided by revenue passenger miles - I jumped off the track for a second there!!]

 

[FLYUSAIRWAYS]

I justed priced a buddy pass for a good friend for ROC-TPA Round Trip. Price was $170. Then went online to check the price of a confirmed seat for the days she wanted to travel, Dec1 and Dec 10th. The price for a confirmed seat round trip ROC-TPA was $98 plus tax. Total was $138.40. Lets see, pay $170 and hope and pray you get there, while you wear your Sunday best, or pay $25 per flight, dress like a slob, be rude to the agents, and have confirmed seat assignments, and earn miles. And they say buddy passes are a BENEFIT????? How can we make a profit charging passengers $24.50 a flight??????

 

[JS]

JS,

True, the RASM is total revenue for the flight divided by total seat miles. If enough people pay high enough fares, the flight can still be profitable (or less unprofitable). In other words, are we talking about average yield for the flight, or specific yield for a passenger that pays this specific fare - and I was talking about specific yield.

I've never heard of the term "specific yield". One ticket's revenue divided by that ticket's revenue seat miles is just not a useful figure in isolation.

My only point is that these fares are FAR below the cost of transporting the passenger that buys at this fare and below the cost of actually moving the seat not counting all the other costs. These fares are about 50% below GoFares.

Jim

This is false. The cost of transporting exactly one passenger does not exist in isolation. A 150 seat plane is going to carry all 150 seats from one airport to another at the same time. It is meaningless to allocate the cost of operating one flight down the level of one seat.

One thing to consider is the marginal cost of fuel for transporting the additional weight of another passenger, but that's only around $25 for the average systemwide round trip. Only mistake fares or super-promotional fares (e.g., $1 on September 11 the year after 9/11) provide revenue that is less than the marginal cost of transporting an additional passenger.

In normal times, one could argue that some of the people who were prepared to pay $100 will instead pay $39 (the ones lucky enough to buy the tickets before the seat inventory runs out). However, these days, people are booking away from US. The people paying $39 one way are people who were prepared to pay $100 on another airline.

 

[BoeingBoy]

Ok, let me just start over again cause I didn't intend to start a fight about semantics and airline economics......

At most, the passengers buying these tickets are paying between 3.8 and 4.9 cents per mile for their journey. This may or may not cover the incremental cost of transporting each of these passengers.

For comparison purposes only, our average total cost to move one seat one mile is over 11 cents and our average cost to just fly each seat on an airplane one mile is at least 5 cents (the cost on express will be higher).

Better?

Jim