Here We Go Again

[KCFlyer]

My further point is that if US would implement a similar policy,
The employees of almost all the majors have felt their fair share of "pain". In due time, the frequent flyer members are going to have to share a little of that pain. .

What does that last statement have to do with anything?

We (FFer's) haven't been hung out to dry because of ONE simple reason - COMPETITION!

The simple fact is we are highly profitable business. According to something I read (Interview with Carty) the top 10% of the Frequent Flyers generate 25% of AMR's revenue. So please enlighten me as to how exactly a person like me "Costs" US Airways money?

The rock bottom cheapest ticket I bought this year for business travel was $363.00 which is not all that cheap. PHL-ORD. PHL-ORD cheapest posted price is $158.00 so I have already paid a revenue premium to fly when I want versus when it's cheapest. You could argue that I already paid for my F/C upgrade.

Or consider the industry darlings SWA and JB. Try going to Dubois, PA or Greenville, NC on either! Aw shucks, the Greyhound bus with wings (and TV's) don't go there? Now US's $439.00 fare to to PVG is looking pretty good. So why shouldn't I get the upgrade when it's available?

If you took the price gap between US and the LCC's on the 112 segments I flew last year you could argue that I already bought the seat in F/C.

Bob...sorry my words sting. But I am just looking at reality. The airlines created this mess in the name of "competition" years ago. The airlines have cut just about everything that they can cut. Except the FF programs. IMHO - those will eventually find their way to the chopping block. That's just a reality. What's the average U worker given up so far? And Siegle says they need to give up another 25%. At that rate, pretty soon employees will be working for free. So they gotta cut somewhere. If you're flying from Philly now, and US starts cutting costs with their FF program, are you going to quit your job because of it? Doubtful. Are you going to start flying AA via ORD when you need to go to New Orleans when US gets you there on a nonstop? Doubtful. If that isn't doubtful, I'd love to meet the boss who would approve a stop at a hub versus a nonstop flight.

Bob, you're all for value pricing (I think). I'll use Alaska's move as an example..They just lowered fares to the following for SEA-LAX:

Round trip fares:

First Class - $698
Full Coach - $598
3 day advance - $458
7 day - $370
14 day - $298
21 day - $250

So let's say US used the same fares PHL-ORD. And you bought your ticket 4 days in advance for $458. Right now, US wants $1500 for a first class seat. Think someone might pop for $698 for the same seat? I do. And when they do, that's fewer seats available for upgrades. That's good for the airline. But some would still want to play the "upgrade game". Fine...limit FC upgrades to 48 hours prior to flight time. Odds are that somebody might pay the difference between what their company paid and FC to get the seat. Or...if 10% of the frequent flyers are responsible for that much revenue, perhaps limit advance upgrades to just those 10%. That's tampering with the FF program, but IMHO, it's something that they are going to have to do.

Remeber back in the day that LCC's were called "no frills". Know why they were called that? Because they didn't offer any frills. Upgrading to F class is a "frill". But I've seen posts from you discussing how out of line the fares are. You're right, they are...but to get those fares, you have to give up some other "frills". Taking steps to insure that as many first class seats as possible are pulling in revenues is a good way to do that. But you seem to want it all...low fares and full frills. How do you propose they do that, without asking the employees to give even MORE pay and benefits back to "cut costs"?

 

[mga707]

Or consider the industry darlings SWA and JB. Try going to Dubois, PA or Greenville, NC on either! Aw shucks, the Greyhound bus with wings (and TV's) don't go there? Now US's $439.00 fare to to PVG is looking pretty good.

You could do what most people would do--fly to the nearest major airport (PIT and RDU, in these particular examples), rent a car and DRIVE there!
Where isit written that a tiny town like Dubois, PA (of all places) simply MUST have scheduled air service? This isn't the 1950s anymore--there are fast highways to practically everywhere.

 

[N628AU]

As for inter-lining -- IMHO it's an almost worthless feature. Trying to get a legacy airline to actually put you on another airline these days is nothing but an exercise in futility.

Not true at all. Last week a friend of mine was booked CLT-ORD-PDX on UA. The UA ORD flight was late. Did they send him to DEN or IAD on UA? No. Did they send him to LAX, SFO, SEA, DEN, ORD, or IAD on alliance partner US? No. Although he wanted to stay on UA despite the delay, primarily due to Economy Plus, they involuntarily rerouted him to DL through CVG and he was only an hour late into PDX.

 

[BoeingBoy]

Here's a look at how the PHL media is reporting on WN's upcoming arrival. From the PHL ABC affiliate:

WPVI Website

Jim

 

[BoeingBoy]

And a Washington Post article:

Southwest to Undercut Competition in Philadelphia

By Keith L. Alexander
Washington Post Staff Writer
Friday, February 13, 2004; Page E02

Southwest Airlines, in a shot across the bow of financially ailing US Airways, will offer fares as low as $29 each way when it begins flying into Philadelphia on May 9.

Article

Jim

 

[TomBascom]

As for inter-lining -- IMHO it's an almost worthless feature. Trying to get a legacy airline to actually put you on another airline these days is nothing but an exercise in futility.

Not true at all. Last week a friend of mine was booked CLT-ORD-PDX on UA. The UA ORD flight was late. Did they send him to DEN or IAD on UA? No. Did they send him to LAX, SFO, SEA, DEN, ORD, or IAD on alliance partner US? No. Although he wanted to stay on UA despite the delay, primarily due to Economy Plus, they involuntarily rerouted him to DL through CVG and he was only an hour late into PDX.

You've got one "success" annecdote. I've got dozens of "failures". It has been years since I've been re-routed on another airline. And it isn't for lack of opportunity. It used to be fairly routine in irregular ops -- these days it's not even worth asking about. Curiously though the last time it happened I was put on DL thru CVG :unsure:

 

[TomBascom]

I'd love to meet the boss who would approve a stop at a hub versus a nonstop flight.

What boss would care?

If the fare is the same (or better yet less) the boss doesn't give two hoots how you get there.

I'd love to meet the boss who want's me to make sure I always take a direct flight... and who's willing to pay for it.

 

[BoeingBoy]

Tom,

As flight crew, we usually don't know what happens to passengers from our late or canceled flight. We see the interlining from the opposite direction - when other carriers send passengers to our flight. While a specific crew doesn't see it on a daily basis, it is not rare - a few times a month.

Also, code sharing is interlining (and a lot more). For example, how many people arriving in CLT on LH will make an "interline" connection to a US flight.

Jim

 

[KCFlyer]

Or consider the industry darlings SWA and JB. Try going to Dubois, PA or Greenville, NC on either! Aw shucks, the Greyhound bus with wings (and TV's) don't go there? Now US's $439.00 fare to to PVG is looking pretty good.

You could do what most people would do--fly to the nearest major airport (PIT and RDU, in these particular examples), rent a car and DRIVE there!
Where isit written that a tiny town like Dubois, PA (of all places) simply MUST have scheduled air service? This isn't the 1950s anymore--there are fast highways to practically everywhere.

Maybe because I think the 2 plus hours spent driving could be better spent in front of prospects GENERATING SALES for my company instead of viewing the PA or NC countryside beautiful as it is.

Time is money, and windsheild time is WASTED time.

OH, and I'll just plan my selling day/week/year around the 8 seats SWA has in inventory for the PHL-PVD route at $29.00. That's another smart move too I suppose.

Some people know the price of everything and the value of nothing.

Bob...Now that LUV is in PHL, and if they compete on a US route, you'll get the honest fare you're screaming for. In fact, if LUV is sold out of the $29 fare, it's only $50 more to fly on a FULLY REFUNDABLE ticket. No need to plan your week around a $29 fare when a $79 fare is available at the drop of a hat. How much more do you think US has been selling similar flights for prior to LUV entering the market? ANd...you'll most likely still be able to get the perks you want on those routes...the low fares...the upgrade opportunities...in other words....you'll have reached travel nirvana. In return, I would suggest that you begin booking full Y class on US at the very least. OTherwise, you might find your US gates staffed by a kiosk and much other human contact cut, since the only way to pay for it (since the FF programs are off limits) is to cut employee pay so much more that employees decide to walk. Because the only place your leaving the company to save money is the employees pocketbook.

 

[TomBascom]

In return, I would suggest that you begin booking full Y class on US at the very least. OTherwise, you might find your US gates staffed by a kiosk and much other human contact cut, since the only way to pay for it (since the FF programs are off limits) is to cut employee pay so much more that employees decide to walk.  Because the only place your leaving the company to save money is the employees pocketbook.

KC you're as bad as CCY -- this is such crap. There is a perfectly viable alternative to cutting costs and benefits. It's called pricing the product properly.

US isn't doing that today.

Today there are, effectively, two prices:

1) Cheaper than SWA. If US is going to fill the plane with those fares then, yup, you're right -- they'll have to cut, slash and burn everything in sight. And eventually they'll lose anyway because a) their pockets aren't as deep as SWA and b ) the deck is stacked against them anyway.

2) Really ridiculous legacy fares that hardly anyone actually buys because they're completely unaffordable and totally disconnected from the costs. These fares are a bad value all around -- you certainly don't get a $1,500 seat when you buy one. The only reason that they are ever sold is because the airline occasionally has a customer over a barrel.

Your proposition that full Y fares, priced at the level they currently are, are necessary to support "perks" is pure, unadultered bullspit. The Y fare is priced the way it is because, as Gordo put it, they think they can get away with it not because the product costs anything even close to that figure.

Not everyone has to be just like SWA. SWA is a great airline with lots of good ideas but there is plenty of room for differentiation -- and US had better differentiate themselves or they are well and truly screwed.

 

[BoeingBoy]

KCFlyer,

You said "Because the only place your leaving the company to save money is the employees pocketbook."

As you phrased that sentence, you are absolutely correct. However, saving money (or lowering costs) is not the answer for our survival. Our "costs" are already lower than WN's, primarily because we are smaller. What matters is unit cost (CASM in the airline business), not total cost. It is in unit cost that management has dropped the ball. A majority of the cost savings were produced by shrinking the airline, hence producing less "units". By producing a larger percentage of those units with RJ's which have a higher unit cost than bigger airplanes, management has acted to offset "cost savings" achieved elsewhere. The result is that unit costs (CASM) has remained more or less the same.

Many of the ways to reduce unit costs have been mentioned on this forum.

Jim

 

[KCFlyer]

Tom - here's my point...If US decides to value price all cabins, and takes ANY kind of steps to encourage one to pay the small difference to guarantee themselves a seat in F class, those steps would most likely involve limiting "upgrade opportunities". The elites don't like that. The statement is made that "the top 10% of frequent flyers provide 25% of our revenues". Great... be a little more liberal with the upgrade opportunities for those 10% of you FF population. For the rest, set a limit that is up to the full fare time period (2 days before flight, for example). The top 10% can upgrade anytime. But tinkering with the FF program even in that minor way sends up howls from the guy who is "elite", but just barely...the "bottom 90% of the FF program" as it were. They'll still have an upgrade opportunity...just not as "open" as it is for the top 10%.

You are arguing that it doesn't cost the airline anything to bump up an elite to F cabin because the seat was going unsold anyways. All I am saying is that in order for an airline like US to be competitive AND profitable is to find a way to insure that come flight time, there ARE NO unsold F cabin seats. Then, they are getting revenue that might have gone unsold in a F class seat, and a Y cabin seat is still occupied with a Y cabin class fare. But to give an airline the opportunity to actually SELL those seats sends up howls of protest from the "elite" flyers who argue that they are somehow entitled to that seat, even though they didn't pay for it.

 

[TomBascom]

Tom - here's my point...If US decides to value price all cabins, and takes ANY kind of steps to encourage one to pay the small difference to guarantee themselves a seat in F class, those steps would most likely involve limiting "upgrade opportunities". The elites don't like that. The statement is made that "the top 10% of frequent flyers provide 25% of our revenues". Great... be a little more liberal with the upgrade opportunities for those 10% of you FF population. For the rest, set a limit that is up to the full fare time period (2 days before flight, for example). The top 10% can upgrade anytime. But tinkering with the FF program even in that minor way sends up howls from the guy who is "elite", but just barely...the "bottom 90% of the FF program" as it were. They'll still have an upgrade opportunity...just not as "open" as it is for the top 10%.

You are arguing that it doesn't cost the airline anything to bump up an elite to F cabin because the seat was going unsold anyways. All I am saying is that in order for an airline like US to be competitive AND profitable is to find a way to insure that come flight time, there ARE NO unsold F cabin seats. Then, they are getting revenue that might have gone unsold in a F class seat, and a Y cabin seat is still occupied with a Y cabin class fare. But to give an airline the opportunity to actually SELL those seats sends up howls of protest from the "elite" flyers who argue that they are somehow entitled to that seat, even though they didn't pay for it.

They don't need to add any restrictions -- limiting upgrade opportunities will happen automatically as inventory control takes care of the whole thing. The main impact would be that being higher on the elite chain would be more desireable if you're looking for upgrades. Which is what the airline should want since that will encourage people to fly more or concentrate their business (smae effect).

Fiddling with the windows has no significant impact.

As it is there is already an "upgrade anytime" window available to any elite who buys a full fare. This is an excellent incentive to buy full fares -- if only they weren't so outrageously priced.

Imposing additional rules and restrictions (like X upgrade certs per customer or whatever) just increases workload and decreases productiivity.

You're wrong about howls from the elites about the airline actually selling F seats. Here, and on FT, the bulk of posters seem, to me, to be very much in favor of the airline selling the seats at a reasonable fare. I know I'd much rather pay a sensible amount, in advance, than be sweating out the upgrade lottery at the gate.

In any case those seats are in fact, a very powerful marketing tool and eliminating them and the chance of an upgrade would be foolhardy. Adjusting the ratio between sold and upgraded is fine with me -- sending out F seats empty, or pulling F seats out of planes though is just plain stupid.

 

[SVQLBA]

I agree with TomB .. FF's only see upgrades as a right if they've paid an extortionate amount for a Y-class ticket. Price Y-Class fairly, and C-class fairly (or a low upgrade for a reasonable price) and most people would be happy to use their FF miles for somthing like the family vacation in the Carribean, rather than to make their work life more bearable and ease the feeling of getting fleeced on price

 

[KCFlyer]

I agree with TomB .. FF's only see upgrades as a right if they've paid an extortionate amount for a Y-class ticket. Price Y-Class fairly, and C-class fairly (or a low upgrade for a reasonable price) and most people would be happy to use their FF miles for somthing like the family vacation in the Carribean, rather than to make their work life more bearable and ease the feeling of getting fleeced on price

I think I'm a pretty good judge of human nature....when someone is being charged an exhorbitant price for a Y ticket, they want to exercise their "upgrade right" to FC. Perhaps that's understandable. But if the cabin is repriced with a "value price", those same people will figure that they are paying full Y, so they still should be entitled to the upgrade from that fare. Let the non-elite fools actually PAY for the seat.

I really have a hard time figuring out why any airline should provide a perk for a person who is not employed by them. If anything, if a company wants to provide a perk for their road warrior employees, then their company should pop for the upgraded seat. I don't think any of US's suppliers are giving products to the provisioning agents because those agents handle their products all day long. Why are airline seats any different??