Dog Wonder
Veteran
WN plans ten years into the future, US thinks thirty days into the future.
Follow along with the video below to see how to install our site as a web app on your home screen.
Note: This feature may not be available in some browsers.
WN plans ten years into the future, US thinks thirty days into the future.
A whole thirty days? Such generosity in your ad hominem attack.
Care to provide the Parker quote in context for all to see?When Doug Parker's words and deeds speak for themselves why interupt?
Ad Hominem attacks? Is that when Doug Parker made his comments about Customer Service??
Finding the ancillary revenues mostly from bag fees is relatively easy. Compare financials before the fees were instituted versus after. The net increase is quite easy to calculate. As to the lost revenue, when have they ever said how much was attributed to having a bag fee in place?
You might need to take an accounting class yourself. There is no such thing as bottom line in revenue.
When WN increases PAX revenue they have to actually give them a seat and all cost-driven services that go along with it. When you charge for a bag you would handle anyway, there is relatively little increase in costs so those revenues drop to the true bottom line.
The real point here is that if WN begins to charge for bags, where else would PAX go to avoid the fees? Nowhere among the majors so they would not experience the fabled book-away; so every dollar in the $300+ million dollar range would have an immediate impact on their bottom line and shareholder value.
Of course, they wouldn't gain market share due to the lack of fees either - how much is a 1% increase in market share gain worth? How about $800 million a year. Now, about that $300 million they're fools for passing up....
Jim
Care to provide the Parker quote in context for all to see?
Was that how the cabins were configured when the old US Airways was in it's second bankruptcy in three years and was nearing liquidation? Yep it sure must be anti-customer to put a product on the market that actually makes money rather than losing it. Hey why not just put 20 seats on an A320? Would customers prefer that too?If I were so inclined I would have already done it.
From the Hub and other statements from Mr. Parker
I have heard that the reconfigurations of the A321 have stopped. Are they reevaluating that? "I know many elites are extremely upset with this.[/The reconfigurations continue and we have said before that we're willing to take a hit on one front to make strides on another, namely first class flyer perception vs. an increase in revenue."
Wow. $800M/year. I know how you got there but exactly who is claiming to have gained 1% market share or $800M in revenues from a no bag policy?
Of course that $800M still only translates to $16M in net income based on a generous 2% factor for the industry.
I don't believe US has published actual baggage revenue numbers so I'm not sure what besides "financials" your would prefer to use. The first quarter 2008 Other Income was $194M on a total of $2.8B in revenue. In the first quarter of 2009 after the fees were added Other Income was $269M on $2.4B in revenue. That's a 38% increase in Other Revenue on a 14% drop in total revenue. An educated guess would say that most of that 38% increase was from the baggage policy.Article
Remember what you said about those bag fees - added revenue with little cost? WN was already incurring the cost of flying the seats around - the planes, employees, facilities, most of the fuel, landing fees, etc are already paid for. So the increase in RASM from the extra revenue is a lot more than the increase in CASM caused by carrying the extra passengers. That means your 2% margin number is meaningless. Most of that extra revenue from market share gain should drop the the P&L bottom line going forward. If you want to talk about fully allocated cost of carrying extra passengers, we need to also talk about fully allocated cost of carrying bags.
Jim
Was that how the cabins were configured when the old US Airways was in it's second bankruptcy in three years and was nearing liquidation? Yep it sure must be anti-customer to put a product on the market that actually makes money rather than losing it. Hey why not just put 20 seats on an A320? Would customers prefer that too?
Not a very convincing argument to support your claim.
I don't believe US has published actual baggage revenue numbers so I'm not sure what besides "financials" your would prefer to use.
An educated guess would say that most of that 38% increase was from the baggage policy.
Okay I'll give you that WN takes 100% of their $80M increase in PAX revenue to the bottom line (just for grins). That is still less than 25% of what US and the other majors are contributing to their bottom line based on the fees.
s.
The whole airline is based upon a lie. The stock ticker of LCC just proves that those at the top are not to be trusted. As others have dutifully pointed out calling yourself a Low Cost Carrier while having the highest non RJ CASM of all domestic carriers doesn't make you a low cost carrier anymore than you standing in garage makes you a car.