It's The Fares, Stupid

[KCFlyer]

Couldn't help but notice that when someone mentions Southwest to ISP as an alternative to a higher fare out of JFK or LGA, they are immediately told that it's too much hassle to get from ISP to NYC...but if US won't match fares out of ISP to JetBlue's fares out of JFK, US will lose passengers who will drive to JFK to catch the JetBlue flight. What price should be placed on the "convenience factor" of having a US flight from an area that is "inconvenient" to the competitors airport?

 

[Flying Titan]

Stupid Route? Define a stupid route.

In my mind, a stupid route would be one where there are no passengers. In this case - NYC-SYR, like all of the NYC-upstate NY routes, there has been strong demand for years. These are heavily traveled biz routes. If they're so stupid - how is JetBlue successfully running three flights a day on an A320? It's my understanding that in July and August, they ran with loads upwards of 90%. Doesn't sound too stupid to me. Meanwhile, CO runs four daily flights w/ EMB 145s to EWR and U runs eight flights a day on Dash-8s. The numbers are the same or higher for BUF and ROC. These are real routes with real business traffic. All pax like Art are looking for is real value - a fair price for the service rendered.

In the case of LGA-SYR, a $426 RT ticket prices out at roughly $1/mile. With U claiming its costs are about 10 cents/mile that seems a bit high to me. Even factoring in the higher costs associated with the shorter stage length, you can still see why a pax would question this fare - and why the JetBlue fare (about 40-50 cents/mile) still seems more reasonable and is likely still quite profitable.

As I've mentioned before, I consider myself a loyal U pax, having flown with U for many years (US2). Frequently, I go out of my way to fly U - sometimes even taking a connecting flight when the competition offers a non-stop. However, in this case, the choice is clear. Why would anyone pay double to fly a Dash-8 over an A320?

 

[JS]

Stupid Route? Define a stupid route.

In my mind, a stupid route would be one where there are no passengers. In this case - NYC-SYR, like all of the NYC-upstate NY routes, there has been strong demand for years. These are heavily traveled biz routes. If they're so stupid - how is JetBlue successfully running three flights a day on an A320? It's my understanding that in July and August, they ran with loads upwards of 90%. Doesn't sound too stupid to me. Meanwhile, CO runs four daily flights w/ EMB 145s to EWR and U runs eight flights a day on Dash-8s. The numbers are the same or higher for BUF and ROC. These are real routes with real business traffic. All pax like Art are looking for is real value - a fair price for the service rendered.

In the case of LGA-SYR, a $426 RT ticket prices out at roughly $1/mile. With U claiming its costs are about 10 cents/mile that seems a bit high to me. Even factoring in the higher costs associated with the shorter stage length, you can still see why a pax would question this fare - and why the JetBlue fare (about 40-50 cents/mile) still seems more reasonable and is likely still quite profitable.

As I've mentioned before, I consider myself a loyal U pax, having flown with U for many years (US2). Frequently, I go out of my way to fly U - sometimes even taking a connecting flight when the competition offers a non-stop. However, in this case, the choice is clear. Why would anyone pay double to fly a Dash-8 over an A320?

If the demand is so strong, then why was supply so limited in the past? Why was JetBlue cajoled into serving SYR before SLC, et al?

As to why one would choose US over B6 on this route, I can think of a few:

1) matching price or pretty close (I know, it doesn't always happen)

2) convenience of LGA over JFK (irrelevant if you're coming from Islip, but quite relevant for parts of NYC)

3) frequency -- nine daily US flights to SYR (only 8 back, which is weird), versus JetBlue's three. For a day trip or even just one night, triple the frequency could be quite useful.


Why a Dash-8 is so much worse than an A320 is beyond me. Is an hour of TV really that important? Has Scary Mary brainwashed you into the evils of turboprops?

Block time for the A320 from JFK is only 15 minutes less. All the time savings is lost in the hassle of using JFK, boarding a big plane, and deplaning a big plane on the other end.

Like many people, I also have a preferred airline. One time I needed to fly to MSP without a Saturday night stay, and UA was having a sale, so I flew them. Another time I needed to fly to MSP without a Saturday night stay, and AA was having a sale, so I flew them.

I see nothing wrong with flying the competition when there is a large price differential. Usually the fares are the same, so I usually get to choose my preferred carrier.

 

[JS]

I decided to see just how outrageous US fares are, so I did the following fare research:

LGA to SYR December 4-9

The cheapest on US is $119.50 total roundtrip

Cheapest on JetBlue is $106.50 total roundtrip

US premium is 12%, or a whopping $13. Is $13 worth the convenience of LGA over JFK, triple frequency and US miles?

If you choose the afternoon JetBlue JFK departure, the fare is $5 higher. US is the same, reducing the premium to only 7%, or six bucks.

At a six dollar differential (or $13 on the other flights), US is giving away the farm. And you want US to flood the market and start a blood-curdling fare war?

 

[KCFlyer]

JS - you're missing the point. It's not about LGA-anywhere...it's from ISP to SYR. Those dates have a fare of $323.50 from ISP. Is the savings in driving from ISP-JFK worth it? Bear in mind, when it's Southwest we're talking about, the answer is usually a resounding NO. Just want to see how it goes when it's someone wanting to leave from ISP and having to drive into JFK for the lower fare.

 

[JS]

JS - you're missing the point. It's not about LGA-anywhere...it's from ISP to SYR. Those dates have a fare of $323.50 from ISP. Is the savings in driving from ISP-JFK worth it? Bear in mind, when it's Southwest we're talking about, the answer is usually a resounding NO. Just want to see how it goes when it's someone wanting to leave from ISP and having to drive into JFK for the lower fare.

Art started this thread precisely because JetBlue is charging much less than US for his particular trip arranged as JFK-SYR (since JetBlue doesn't fly ISP to anywhere, including SYR). There is no low-fare competition from ISP to SYR, so it's no surprise that US charges more than from NYC.

 

[flyin2low]

"If the demand is so strong, then why was supply so limited in the past? Why was JetBlue cajoled into serving SYR before SLC, et al?"

Charles Schummer?

 

[Flying Titan]

JS -
You're kidding, right??? Why is a Dash-8 worse than an A320? If you asked 10 people on the street - especially FFs, which they would rather fly, I would bet my house (and yours too) that all ten would choose the full-sized jet over the much smaller, noisier and less comfortable turbo-prop.

Sure the little tv sets are nice, but for a half-hour you can't watch much of anything anyway. That's not the issue. The issue is a much, much more comfortable flight on a jet. The ability to walk on and off of the aircraft via a jetway not a walk of 100 yards to the terminal (and sometimes that's not an exaggeration). Have you ever walked to/from a turboprop in upstate NY on a January morning? How about sitting in row 1 or 2 on these aircraft when the door is open for 20 minutes while the plane is waiting for the last two pax to show up?

Everyone I know (U supporter or not) agrees that a big part of the reason that U is in the financial mess it's in today it that it stuck to these very unpopular aircraft when the rest of the industry realized that people would jump at the chance to fly on a jet. So please, lets not try to sing the praises of the turboprop vs. a new full-sized jet. That's a losing battle.

As to your other points - yes, the frequencies are a huge advantage for U. The FF pgm (IMHO the best in the industry) and, at times, very competitive fares all work in U's favor on this route. You are also correct that, for most people, LGA is preferable to JFK when it comes to traveling to/from NYC. When the fares are roughly equal, I often choose U over JetBlue for traveling upstate -- partly because of the reasons mentioned above -- partly because I genuinely like the airline. Still, when faced with the situation that Art has laid out, I choose JetBlue every time.

This brings be back to the original point of this thread. When you have pax who are as loyal to a carrier as Art and they choose to take another carrier, you need to take a good look at what's happening and why you're losing these dollars. I also raise the question again - What is a reasonable fare for a route like this? Should an advance-purchase fare of more than a week really work out to a dollar a mile? Just wonder what people consider a "reasonable fare?"

 

[Flying Titan]

"If the demand is so strong, then why was supply so limited in the past? Why was JetBlue cajoled into serving SYR before SLC, et al?"

Charles Schummer?

Flyin -
Perhaps you missed my and some of the other posts earlier. NYC to BUF, ROC and SYR have traditionally been very strong routes. Sure, LCCs have usually leaned toward larger markets, but if they're such poor routes, then why has JetBlue added frequencies from JFK to all three cities? Certainly Schumer hasn't forced JetBlue to do that, too. Of course, it's my guess that the remarkably high load factors have had something to do with this decision. Has Schumer forced the eight- or nine-a-day frequency that U has now to these cities from LGA? The simple fact is that these markets stand on their own and the number of enplanements bears this out.

 

[US2]

I decided to see just how outrageous US fares are, so I did the following fare research:

LGA to SYR December 4-9

The cheapest on US is $119.50 total roundtrip

Cheapest on JetBlue is $106.50 total roundtrip

US premium is 12%, or a whopping $13. Is $13 worth the convenience of LGA over JFK, triple frequency and US miles?

If you choose the afternoon JetBlue JFK departure, the fare is $5 higher. US is the same, reducing the premium to only 7%, or six bucks.

At a six dollar differential (or $13 on the other flights), US is giving away the farm. And you want US to flood the market and start a blood-curdling fare war?

True enough on a restricted and non-refundable ticket. However, its the walk-up fares that are the problem and the subject of the original post. US is charging more than double the fare that Jet Blue is to each of BUF, ROC and SYR and running the routes with RJs and turboprops rather than new Airbii. Maybe the new Embraers will help to even out the competitive disadvantage on some of these routes, but until the underlying fare structure is changed, US will continue to lose business travelers to the Jet Blues and Southwests of the world because the fares are too high and the advantages of flying US less apparent with every round of cuts in inflight services.

 

[USFlyer]

Folks -

Let's remember U cannot simply add a bunch of A319/A320 flights from LGA to upstate NY without using slots from other existing flights. So, we're stuck with turboprops. In some ways it's not even a fair comparison, as operating a turboprop will obviously have higher seat mile costs than a larger aircraft.

 

[Art at ISP]

Art started this thread precisely because JetBlue is charging much less than US for his particular trip arranged as JFK-SYR (since JetBlue doesn't fly ISP to anywhere, including SYR). There is no low-fare competition from ISP to SYR, so it's no surprise that US charges more than from NYC.

JS,

You are mistaken as to the original intent of this topic. I was not comparing ISP-SYR to JFK-SYR. I was comparing LGA-SYR on a buzz bucket (my nickname for the Dash8) to JFK-SYR on an A320 for LESS than half the price.

This is about value--both perceived and real, and what is considered a fair price. This is the only business I know of where the pricing has no relationship whatsoever to cost.

My point is that those of us who have to make last minute arrangements are tired of being gouged. All we're doing is subsidizing the low end. I challenge US to do something about it--and I know they can. I know you're sick of hearing this but I was told by a senior executive about a month ago that if they could raise the bottom of the fare bucket by $20, they could lower the top by $300. My point? SO DO IT ALREADY. The company has focused on competing with the LCC's on a dollar for dollar match, and they are trying to get the LCC once a year passenger, who I call Joe Priceline. We know they can't compete on cost, so why not be innovative--offer a superior product for a MODEST premium--NOT more than double.

There is plenty of demand on routes like this which would justify a larger aircraft. Just because US fills 8 Dash 8's a day doesn't justify charging more than double "just because they can". As I recall the NYC-upstate routes used to be on 737's and A319's which were mostly full.

While I have to agree that costs have to be addressed (and NOT by taking from the employees), the primary problem is revenue. However the company seems more intent on busting the unions and hosing the employees than offering a superior product at a fair price. What needs to be realized is that the employees ARE the airline. Why do I stay? Because of you fine folks who man the front lines.

One can only hope that the rolling hub concept will increase efficiency, aircraft utlization, etc., and thereby allow for increased frequencies and lower costs. However, I remain convinced that the main problem remains.......

 

[JS]

Folks -

Let's remember U cannot simply add a bunch of A319/A320 flights from LGA to upstate NY without using slots from other existing flights. So, we're stuck with turboprops. In some ways it's not even a fair comparison, as operating a turboprop will obviously have higher seat mile costs than a larger aircraft.

Not to mention lower frequency. Sure, a survey that says "Would you prefer a Dash-8 or an A320?" will say "A320", but if you ask people to choose between:

Three daily A320 flights
8 Dash-8 flights

You'll get a lot more "Dash-8" answers. Cheap travelers might not mind three daily flights -- they'll just suit their schedule to fit the airlines'. A business traveler might prefer to take the Dash-8 back home 60 minutes after a meeting concludes rather than sitting in the airport for three hours, waiting for that third and last daily flight.

 

[JS]

Originally posted by Art at ISP:

JS,

You are mistaken as to the original intent of this topic. I was not comparing ISP-SYR to JFK-SYR. I was comparing LGA-SYR on a buzz bucket (my nickname for the Dash8) to JFK-SYR on an A320 for LESS than half the price.

Well, then, take JetBlue! I don't understand why you're complaining so much. You have a choice -- make use of it!

This is about value--both perceived and real, and what is considered a fair price. This is the only business I know of where the pricing has no relationship whatsoever to cost.

Banks

Cable TV

Telephone

OPEC oil

My point is that those of us who have to make last minute arrangements are tired of being gouged. All we're doing is subsidizing the low end. I challenge US to do something about it--and I know they can. I know you're sick of hearing this but I was told by a senior executive about a month ago that if they could raise the bottom of the fare bucket by $20, they could lower the top by $300. My point? SO DO IT ALREADY. The company has focused on competing with the LCC's on a dollar for dollar match, and they are trying to get the LCC once a year passenger, who I call Joe Priceline. We know they can't compete on cost, so why not be innovative--offer a superior product for a MODEST premium--NOT more than double.

I agree; it is because of expensive last-minute trips that discount carriers thrive. The market is working pretty well -- higher prices lead to higher supply.

Once again, the senior executive said (emphasis added) that "IF they could raise the bottom of the fare bucket by $20, ...", which they CAN'T DO. You might be willing to pay $20 more just to fly US, but few others will. You simply cannot change other people's preferences.

There is plenty of demand on routes like this which would justify a larger aircraft. Just because US fills 8 Dash 8's a day doesn't justify charging more than double "just because they can". As I recall the NYC-upstate routes used to be on 737's and A319's which were mostly full.

A lot has changed over the years. I also recall the good old days, when dinky little LYH (Lynchburg, VA) was served by 737's to CLT. There was even a F28 flight to CHO. Delta flew mainline from SHV to DFW. Delta flew DC-8's between SFO and LAX.

Well, that was then, and this is now. Sure, I would prefer the past over today, no question about that, but since I don't have a time machine, my only choice is to live with the present and quit whining and moaning about the good old days.

While I have to agree that costs have to be addressed (and NOT by taking from the employees), the primary problem is revenue. However the company seems more intent on busting the unions and hosing the employees than offering a superior product at a fair price. What needs to be realized is that the employees ARE the airline. Why do I stay? Because of you fine folks who man the front lines.

One can only hope that the rolling hub concept will increase efficiency, aircraft utlization, etc., and thereby allow for increased frequencies and lower costs. However, I remain convinced that the main problem remains.......

All else being equal, a rolling hub will require SMALLER planes, not bigger. Do you want to fly on a Dash-8 or a B1900?

 

[Art at ISP]

JS,

You have a point regarding the schedule vs. waiting around. However, for $200 round trip, vs. the current price (within 3 days) of over $530.00 for the Dash 8, I think you will find that people can wait.

Regardless of what anyone says, there is no justifiable reason to gouge someone $500 for such a trip. I think you will find that most people will just refuse to pay.
I cannot justify the cost differential.

Even if I fly up Thursday night (which I am considering) on B6, it's still much less expensive, considering the hotel cost.

The problem is that they are just about forcing people away with fares like this. And people who are less loyal than I am may not come back.

That is my point. Nothing more nothing less.

As for me I will probably drive. B6 schedules are not convenient for me this time. So you make one point but I think I made a bigger one.