It's The Fares, Stupid

[Art at ISP]

I have just learned of a meeting in SYR next Friday that I need to attend. I priced the trip on US, using a Dash 8 from LGA at $426, vs. Jet Blue from JFK at $200 with no restrictions. After considering driving time, waiting at the airport, time to get rental cars, etc., it almost makes sense to drive (remember I did drive to ROC last summer).

Now it can't be that I am the only customer in a position to make such a decision, can it???? How many more people just refuse to pay $400 for a trip which should be no more than $250?????? It's as if US was providing me with a free bus ride to JFK and handing me a ticket on B6!!!! WAKE UP PEOPLE.

Despite all of you wonderful people at US, I actually have to consider B6 this time, as much as I hate to admit it. Your management is just about forcing the situation.

Frankly, if I can line up another appointment nearby I will likely drive, but I think you all get the picture here. Before they can even think about more cuts, they have to fix the revenue situation. I stick by my slogan, folks..................

 

[PITbull]

Art,

You are just so correct. IT IS THE FARES!

We are losing our Passengers/customers and they are flying other carriers. Our management still believes its Labor costs. How can anyone convince this "mind set" to change?

 

[flyin2low]

JetBlue does provide a better product for the fare. I would go with them. If you choose to drive just remember the orange cones along the way, ughhhh.....

 

[ngneer]

Art,

I had a similar experience last week. Three of us had to go upstate, near Binghamton, for a one-day meeting. It turned out that it was cheaper for us to rent a limo for the day and have them drive us up and back. So that's what we did.

It didn't really take any longer either. Whether you fly or drive, it takes at least 4 hours to get to Binghamton from Long Island!

 

[Flying Titan]

Art -
How right you are. I, too, consider myself a loyal U pax, but in this particular instance, you have no choice but to fly JetBlue. They're offering lower fares and a superior product on this route. The NYC-SYR flight on an A320 takes about 35-40 minutes vs. 1 hour on the Dash-8. You receive better service and are more comfortable. In this instance U is offering an inferior product and charging more for it. I fly this route from time to time and the only advantage that U has is scheduling, with eight daily flights vs. three. I've been told that the nyc-upstate flights will be switched over to RJs - but no one seems to be sure when. That should level the playing field somewhat, but still won't justify double the fare. For what it's worth, frequently I've found that the fares on the NYC-upstate routes are roughly equal between U and JetBlue, but occasionally this kind of disparity pops up. When the fares are close, I usually fly U and put up with the Dash-8; when there's this kind of a difference I take JetBlue. Easy call.

 

[usfliboi]

Art, Im not sure I follow and frankly never have. To a point i understand "its the fares stupid" but its all about supply and demand. Our load rates are above 70% and in some even higher. Theres no doubt it can be restructured but i dont think you will ever ever see those types of fares across the board I really dont! h34r:

 

[USFlyer]

I also priced that ticket out and came out about $100 less. If a market has a high percentage of travelers using corporate discounts, then that actually might result in a higher price for those folks without such negotiated rates. Besides, I really don't think $200 each way for LGA to SYR is all that bad. It sure beats the hell of driving on highways, wear and tear on one's car, etc. Plus, jetBlue out of JFK is a pain in the neck depending on where you are living/working in NY.

 

[PITbull]

Art, Im not sure I follow and frankly never have. To a point i understand "its the fares stupid" but its all about supply and demand. Our load rates are above 70% and in some even higher. Theres no doubt it can be restructured but i dont think you will ever ever see those types of fares across the board I really dont! h34r:

Because of the "mind set" above, we will continue to lose passengers!


If our loads are 70% AND above, how come NO profit?????????? If you CCY folks think that the fares are reasonable, and it all about supply and demand, take a look, the customer is leaving U to go to the competitor. Because the DEMAND is over there, inspite of U cutting capacity!

 

[AAviator]

B6 has a CASM below .06$. U's is well above 12 cents. The turboprop comes in above U's casm.
Any corelation here?

 

[JS]

I have just learned of a meeting in SYR next Friday that I need to attend. I priced the trip on US, using a Dash 8 from LGA at $426, vs. Jet Blue from JFK at $200 with no restrictions. After considering driving time, waiting at the airport, time to get rental cars, etc., it almost makes sense to drive (remember I did drive to ROC last summer).

Now it can't be that I am the only customer in a position to make such a decision, can it???? How many more people just refuse to pay $400 for a trip which should be no more than $250?????? It's as if US was providing me with a free bus ride to JFK and handing me a ticket on B6!!!! WAKE UP PEOPLE.

Despite all of you wonderful people at US, I actually have to consider B6 this time, as much as I hate to admit it. Your management is just about forcing the situation.

Frankly, if I can line up another appointment nearby I will likely drive, but I think you all get the picture here. Before they can even think about more cuts, they have to fix the revenue situation. I stick by my slogan, folks..................

Bad example. JetBlue serves SYR in order to get JFK slot exemptions. It's the ghost of the CAB hanging around.

US is more competitive with JetBlue to destinations free of government intervention, like ... hmmm, I can't think of any. LGB also has government intervention.

Anyway, how much was the trip out of ISP? It doesn't make any sense to drive to LGA or JFK just to fly to SYR.

 

[Art at ISP]

usfliboi--You are right. You DON'T get it. You're answer is basically that US is charging the exhorbitant fares "because they can". Well these same people can go to JFK and fly B6- a superior product for less than half the price. Are you management or something? So it isn't that "demand" is so great.

And for what its worth, I have always maintained that rationalization is what's needed-not a drop in fares to artifically low levels. I say that business travelers would pay a MODEST premium for superior service--but we won't pay double for inferior service.

JS--ISP was almost $100 MORE than LGA. And most flights are sold out from ISP--they cut ISP-PHL back to 4 r/t a day.

PIT--I am glad YOU get it.

By the way, increased frequencies on larger aircraft would decrease overall costs.

I still say....

 

[JS]

JS--ISP was almost $100 MORE than LGA. And most flights are sold out from ISP--they cut ISP-PHL back to 4 r/t a day.

Art, what do you want US to do? They can't go around and upgauge every station to 8 mainline flights a day. There just aren't that many people that want to fly ISP-SYR.

US matches the discount carriers most of the time (e.g., RDU-LAX). It doesn't make any sense to start attacking JetBlue on stupid routes like JFK-SYR.

 

[ClueByFour]

US matches the discount carriers most of the time (e.g., RDU-LAX). It doesn't make any sense to start attacking JetBlue on stupid routes like JFK-SYR.

By that logic, eventually US won't have any routes left to gouge folks on.

Wait until LUV starts PHL-BUF and PHL-ROC and such, and US sees their loads and/or yield erode in PHL. Of course, in the "non stupid" route wars, PHL to the outerlying Boston airports should be a crushing blow.

And, if B6 has any luck with their own RJ strategy, they (LCCs) can start encroaching on what I'll call "really stupid routes."

 

[Art at ISP]

Art, what do you want US to do? They can't go around and upgauge every station to 8 mainline flights a day. There just aren't that many people that want to fly ISP-SYR.

US matches the discount carriers most of the time (e.g., RDU-LAX). It doesn't make any sense to start attacking JetBlue on stupid routes like JFK-SYR.

JS,

There is certainly more demand for ISP-PHL than 4 r/t a day. There used to be 7 and they were mostly full. With the rolling hub coming to PHL, it would allow for greater aircraft utlization, therefore greater frequencies. I am not unrealistic--but there is a greater demand from ISP than US is currently addressing. One can also hope that when (if?) MDA ever gets going we might see an alternative to PHL. So I am not addressing ISP-SYR, I am addressing ISP-anywhere.

JFK-SYR or NYC-SYR for that matter are not stupid routes. There is plenty of demand, but this is just a case where US offers an inferior product for twice the price. JFK and LGA are only a few miles apart, so if I have to drive to one or the other, its the same traffic.

I am not looking for miracles here, just effective competition. It appears, however, I may be asking for too much.

 

[JS]

JS,

There is certainly more demand for ISP-PHL than 4 r/t a day. There used to be 7 and they were mostly full. With the rolling hub coming to PHL, it would allow for greater aircraft utlization, therefore greater frequencies. I am not unrealistic--but there is a greater demand from ISP than US is currently addressing. One can also hope that when (if?) MDA ever gets going we might see an alternative to PHL. So I am not addressing ISP-SYR, I am addressing ISP-anywhere.

JFK-SYR or NYC-SYR for that matter are not stupid routes. There is plenty of demand, but this is just a case where US offers an inferior product for twice the price. JFK and LGA are only a few miles apart, so if I have to drive to one or the other, its the same traffic.

I am not looking for miracles here, just effective competition. It appears, however, I may be asking for too much.

JFK-SYR is a stupid route in that JetBlue never would have flown it were it not for the needed JFK slot exemptions.

It is pointless for US to compete against JetBlue on this type of route. Is it fair that JetBlue got JFK slot exemptions and US didn't? No. Is it fair that US has lots of LGA slots and JetBlue has none? Also no.

The competitive market cannot work very well when government gets in the way. JFK and LGA must have slots to prevent massive delays, but when the slots are hogged by legacy carriers and doled out to new carriers in exchange for serving so-called "underserved routes" (i.e., anything in upstate New York ), the result is a weird mixture of CAB rules and oligopolies of entrenched carriers.

Competition is working in that JetBlue is not charging $500 roundtrip for a JFK-SYR flight. If US chooses not to match JetBlue's price, they don't have to. You have a choice -- US or JetBlue. That's one more choice than what you had before JetBlue arrived.