Ideas on what we can do to cut costs at US airways …or generate revenue 2

[gaucho99]

Do you even know what the load factors are for the majors?

The load factor is very high but that is not a key indicator when experts say there is too much supply out there.

Suppose for example you open a lemonade stand on your block and you do quite well for a time. It costs you 10 cents to produce a glass of lemonade and you can sell it for 25 cents. You have a steady supply of about 50 customers per day and turn a nice profit. Soon, your neighbors see your nice little business going and before you know it, there are 10 of you out there selling lemonade to the same 50 customers. So now instead of 50 customers using your product per day, you only have 5.

You decide to try and lure some of the customers you lost back and so you lower your price to 20 cents. But all of your competitors follow suit. Because the price went down, you now have 60 customers to divide between the 10 lemonade stands but your profit per customer has decreased. One of your competitor's lowers his price to 15 cents per glass and gains all the customers for one day until you and the others follow suit and divide the customers up again. Now, at 15 cents per glass, you get more customers....90 people per day are buying lemonade on your block but you are only making a nickel per glass. Now, one of your competitors found a cheaper way to make lemonade and is selling it for 8 cents per glass. At that price you have 500 customers a day buying lemonade. You have no choice but to lower your price to 8 cents to gain market share. So, you still have all the customers you can handle ( a high load factor)....about 50 per day but you are losing money on each one.

Now you have to think of ways to increase revenue without losing market share. So you start charging 2 cents for the glass and another 2 cents if they want it cold and another 2 cents if they want to drink it on your property. This infuriates your customers so now you sart talking with some of the other lemonade stands that are losing money and try to work out a merger deal. Perhaps if you merge, you can cut some of the production costs and be more competitive with the low cost lemonade stand that is making a profit at 8 cents. Maybe, if you consolidate from 10 stands down to 4, you can get back to the 25 cent cost per glass. You won't have 500 total customers anymore...some of them will go back to drinking water but the ones thatt are left...that really need the lemonade will pay the price you need to get.

Only problem is...the guys hired to make your lemonade have a union and are dead set against consolidation..they want you to continue to employ them at a reasonable wage even though you are losing money....so the merger talks drag on for a while.

 

[john john]

The load factor is very high but that is not a key indicator when experts say there is too much supply out there.

So the demand for lemonade still exists? How bad do the people want the lemonade? Lets outsource with little tiny cups and use a shoebox instead of a cash register maybe we can get a kiosk (machine) we can’t really make some money. And get the hell out. Nobody wants lemonade a lot people want to travel.There is a thing call demand

 

[tadjr]

There’s waste out there in this company , lets find it and cut it off …

A station that currently has 23 flights (going to 19 in Aug) with a Station Manager/CSRamp Manager/and 4 Shift Managers. Do you think we could get another manager just for luck? Should it really take 6 managers to work a station this size? Overkill big time. We shouldnt be paying a manager to force D:-10 on originators and do what the rest of their shift? 3 Shift Managers at most and even less if the 2 other managers worked am/pm shifts a day or two a week. We have to save money everywhere dont we?
And we cant even get ours to agree to 4 day 5 hour shifts for the part timers so they at least get a break 1 day a week on gas.

 

[Harry Callahan]

And on the gas thing I was working last night with a full timer who is still on the bottom end of the pay scale. With the miles he drives to work one 8 hour shift is what he said it takes to fill up his car. What I don't understand & I sugguested to him ,was why he doesn't just swap off one day & work a 4 day week.

 

[phlrez]

Did this ever dawn on anyone. Look at who's making money, i.e. Southwest and copy them.
The current US model is f'd up and charging nonrev will just take morale down another notch if that's possible.

 

[tadjr]

Generate revenue.
Picked a day in August.
US TPA-DCA flight time a little over 2 hours. Fare $54. plus tax/fee
Amtrak TPA-DCA travel time 21 hr 57 mins $102
Greyhound TPA-DCA travel time 21 hr 45 mins $126 nonref/$150 ref.

Whats wrong with this picture?

 

[InternationalShannon]

Since we all know the only people Doug Parker cares about are the Shareholders then perhaps this novel idea will be the best value for shareholders

1. Cease Operations Immediately - Put the employees and customers out of their collective misery.
2. File Chapter 7 the next business day
3. Auction off all of the assets and leases where applicable. I'm sure the Computer system will net a small fortune!!!!! (note sarcasm)
4. Distribute the monies accordingly.

That makes me sad, I think that is a terrible idea - - I dont think anyone would be put out of their misery.

 

[sharktooth]

That makes me sad, I think that is a terrible idea - - I dont think anyone would be put out of their misery.

He was being sarcastic.

 

[fr8tmastr]

Generate revenue.
Picked a day in August.
US TPA-DCA flight time a little over 2 hours. Fare $54. plus tax/fee
Amtrak TPA-DCA travel time 21 hr 57 mins $102
Greyhound TPA-DCA travel time 21 hr 45 mins $126 nonref/$150 ref.

Whats wrong with this picture?

I'll tell you, The employees would not have to pay to run the airline if they used your logic. The only thing management does is line their pockets and blame labor. You take that away, they would be lost.
The public thinks they have the constitutional right to fly for less than any other mode of transport. Just tonight on the local news, the were talking about the "outrage" of a 260ish round trip fare from New York to Chicago. $130 each way half way across the country?... in an hour and a half?... Oh the humanity

 

[SolidCactus]

This person is out of touch with America … they must be upper middle class or wealthy …

Paul R. La Monica
“I figured consumers would be willing to pay higher ticket prices if it helped keep more airlines in business and also led to a better flying experience.â€￾


This is the type of person who most likely has never been to a wal-mart and wonders what all the fuss is about wal-mart shutting down the small businesses ..I hope paul goes down to one of the small town main streets and tries giving THAT speech there .. LoL..

Hi Freedom,

I don't agree with you on this one. Wal-Mart, as much as I dislike this company, doesnt have one cashier scheduled to wait on 50 customers, and then closes at 9 PM telling their customers that if they want their order, they're going to have to sleep by the checkouts until tomorrow morning. Unfortunately, this is what air travel has become.

I for one will pay more, and do pay more for better things. We are the customers that the airlines should be targeting.

But I know it is a lot easier said than done...

 

[SolidCactus]

I'll tell you, The employees would not have to pay to run the airline if they used your logic. The only thing management does is line their pockets and blame labor. You take that away, they would be lost.
The public thinks they have the constitutional right to fly for less than any other mode of transport. Just tonight on the local news, the were talking about the "outrage" of a 260ish round trip fare from New York to Chicago. $130 each way half way across the country?... in an hour and a half?... Oh the humanity

Well, if the airlines charged what they had to in order to make money, and the public still believed that flying is a constitutional right, then the public would go to their lawmakers, and ask for the government to subsidize the cost of air travel. And if it were determined that flying is a constitutional right, then the government would subsidize the airlines.

The sad truth is, you cannot sell something for less than the cost. It will always result in failure.

 

[CynicalResAgent]

If they sold a decent neck roll pillow on long haul domestic flights that might make some money. If they could get and stock a decent pillow maybe for 10-12 dollars I think people would buy that. I always take my own but I have forgotten it a couple of times and hated not having it. Of course there is not much room to store them, maybe they could sell them by the gate and have a limited number on the aircraft. Get rid of those ebola pillows they're gross.

 

[cactusflyer]

Non Rev travel is part of our "salary" per say..... charge me for that and that would be a pay cut.....

That is EXACTLY why I don't and won't support paying to non-rev. The east had already taken concessions pre-merger and a lot of us on the west (FA's) haven't had a raise in at least the last 5 years....it's been 7 for me. No, I won't pay to non-rev.

If they even try to implement that, then things are getting really bad.

 

[tadjr]

Wal-Mart, as much as I dislike this company, doesnt have one cashier scheduled to wait on 50 customers, and then closes at 9 PM telling their customers that if they want their order, they're going to have to sleep by the checkouts until tomorrow morning. Unfortunately, this is what air travel has become.

Obviously you dont shop at the Walmart I do (try it during the week at about 1150pm :blink: ) They dont quite make you wait til the next day, oh wait, they do, but its just 10 mins until they reopen the register.
Anyway, I dont quite get your point above. I have never left the counter for the night with people waiting in line from a canx flight. Is this what you are saying is happening or that they might have to spend the night in the airport until the next flight which is tomorrow? If thats the case, then you're comparing apples to oranges. There ARE nights that I've shopped where they've been out of something I wanted so I did have to come back the next day or later in the week or just do without for the week.
As far as keeping the counter open all night long, this is a foolish waste of resources. You "might" get a shopper who has insomnia at 2am or someone who gets dropped off that early catching a 6am flight, but when the last flight is gone, why stay open? You can call rez 24/7 to take care of business or have 10-16 hours in most big cities to take care of ticketing issues in person.

 

[rvolkcpa]

Maybe Economy Plus would be good for US. Even if there is never a merger with United, both carriers are Star Alliance members so consistency on seating choices would be good. Eliminating a row or two of seats but charging a revenue premium for plus seats would save weight and should generate some additional revenue.

We recently paid $89 each to upgrade from ORD-HNL on United and it was worth the cost. We would have upgraded on a SEA-IAD flight if 2 adjacent seats had been available.