Effect of JetBlue's enterence to the PIT market

[insp89]

As always, it depends on the other half of the equation.....RASM.

The whole point of my much earlier discussion of our cost vs WN/B6 was because of the comment someone made about "el cheapo" fares that B6 was offering in PIT, the point being that for them those fares weren't money-losing.

Obviously, all we need is revenue greater than expenses to produce a profit. Obtaining, and keeping, that relationship positive is just harder the more places we have truly low cost competition. And we can call ourself "LCC" all we want to but a CASM north of 15 cents (including fuel) isn't anywhere close.

I guess what I'm really saying is that anyone who thinks this carriers fuel hedges running out or that carriers maintenance honeymoon ending will "level the playing field" is in for a long wait. But the playing field doesn't necessarily have to be level for US (or any other legacy carrier) to be "competitive".

Jim

Jim,
I think the contract employees of Usairways have done more than just wait around for fuel hedges running out and maintenance honeymoons ending.[HUGE concessions].

What I see is the primary difference between WN/B6 and Usairways is obviously that U is a International carrier, while WN/B6 is for the most part only domestic.

Anyone who thinks that U will be able to match WN/B6 CASM numbers, [due mostly to fleet types] is also in for a long wait.

I agree that the playing field does not have to be equal for U to be profitable.

Due to the recent loss at B6, It looks like the maintenance honeymoon IS over. And those cheapo fares offered in PIT by B6 WERE money losing.

 

[ClueByFour]

I guess the next question is,
Does Usairways have to get their non-labor, non-fuel cost down to Southwest's level to be a profitable airline ?

No, but it's going to be an interest situation.

US management is doing it's best to reduce VFF benefits, reduce the inflight comfort and perks of the product. That makes it really difficult (particularly in Y) to differentiate from the traditional low cost carriers.

It makes it even more interesting when going head to head with UA, who has determined to chase revenue first (witness E+, new international premium cabins, and the like).