Fuel Surcharge Fizzles

[BoeingBoy]

US Airways retreats on ticket fuel surcharge
Discount carriers refuse to add fee to cost
Christopher Davis

US Airways and its industry peers were rebuffed this week in a short-lived attempt to recoup some of the costs related to soaring jet fuel prices.

Article

[The last paragraph has some interesting speculation]

Jim

 

[Flying Titan]

Jim -
You're right. That is an interesting paragraph. I would be surprised, though, if that's the case. Seems like they'll have to make a decision on PIT before the end of the summer and I don't think that will give them enough time to declare victory or defeat in PHL. On this one, I agree with CCY - U will win or lose the whole ballgame in PHL. There is no running from this battle.

 

[mweiss]

Unfortunately, based on how they're warming up in the bullpen, I don't give US a very good chance.

 

[BoeingBoy]

Flying Titan & mweiss,

FWIW, ditto twice.

Jim

 

[orville]

Unfortunately waiting to see how bad a beating they take in PHL might be too late for PIT also. You never know who is lurking in the shadows ready to pull the carpet out from under them there 😛h34r:

 

[USA320Pilot]

This article illustrates that legacy carriers have no pricing power. Therefore, the only way to compete with LCCs is to lower the cost gap whether we like it or not.

America West made the transformation from a medium cost network carrier and although its path will be easier than US Airways, it's clear to compete that US Airways must become a LCC/network airline or it will simply disappear.

During his recent webcast Dave Siegel indicated the company would be more like America West and yesterday the Phoenix-based airline reported record traffic for the month of March.

See Story

In regard to the last paragraph of the fuel surcharge article, the company will reduce its Pittsburgh operation to 10 mainline and 10 express gates this fall. There will be an announcement on this one way or another in the summer.

Regards,

USA320Pilot

 

[mweiss]

This article illustrates that legacy carriers have no pricing power.

I wouldn't go that far. I'm pretty sure there's room for legacy carriers to have pricing power. It's just that they're not going to get it by cutting services and pretending they still offer much more than the LCCs.

 

[ITRADE]

I gotta agree with 320 here - the majors are not price leaders and do not set the prices in most markets. They can't.

 

[mweiss]

That they aren't does not equate to being unable.

 

[kate]

Maybe I'm not seeing the big picture -- what makes it so difficult to change our fare structure to be competitive? I had a US1 redeeming a fly 3 get one free and explaining to me why she was taking AirTran for $600 less than us on a walk up fare. She was apolgetic and really wants to keep flying us but we aren't making it easy. Why after all this time we still don't we have a plan in place?????

 

[JS]

I'm reading conflicting messages here. Which is it?

-- US has no pricing power; they are forced to match low cost carriers' fares.

-- US is still gouging the customer; why don't they match low cost carriers' fares?

 

[BoeingBoy]

JS,

Actually, both.

In competitive markets, we must match the LCC fare, but not necessarily for all seats and without restrictions. Even in these markets, we still have some high fares.

In non-competitive markets, we have high fares.

Jim