Art,
If US raised its lowest fare, of course the average would go up. It has to, by the definition of "average". The problem is that US would sell fewer tickets. A higher average fare times fewer tickets would probably result in lower total revenue.
Now, US could downgauge aircraft or reduce frequency in order to keep the load factor up, but that's not such a great idea, especially for a market such as ISP-LAX. Would you really want to have just one flight a day between ISP and LAX via PHL along with paying $100 more? That's what would happen if US stopped competing with WN on the fares.
What's worse is that after cutting the schedule and raising the fare, US becomes an even worse choice, and fewer people buy tickets. US then has to put up with low and unprofitable load factors, or, more likely, drop the route entirely.
If US raised its lowest fare, of course the average would go up. It has to, by the definition of "average". The problem is that US would sell fewer tickets. A higher average fare times fewer tickets would probably result in lower total revenue.
Now, US could downgauge aircraft or reduce frequency in order to keep the load factor up, but that's not such a great idea, especially for a market such as ISP-LAX. Would you really want to have just one flight a day between ISP and LAX via PHL along with paying $100 more? That's what would happen if US stopped competing with WN on the fares.
What's worse is that after cutting the schedule and raising the fare, US becomes an even worse choice, and fewer people buy tickets. US then has to put up with low and unprofitable load factors, or, more likely, drop the route entirely.
