LOOKS LIKE THE LIQUIDATE THREAT IS BACK

[ClueByFour]

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On 5/26/2003 301 PM N305AS wrote:

Tom, you''ve missed the point. For many price-sensitive customers, those added costs represented the difference between flying and staying home.


So when customers called on that advertised $198.00 roundtrip which suddenly became $225.00 when all the taxes are added, many of them suddenly lost interest and didn''t book.


Of course, each of those lost customers directly translates into lost revenue for the airlines. The fees being reduced or eliminated will therefore benefit all carriers.
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I think Tom''s point was this:

The airlines whined about the security fees and taxes combining to push many of the aforementioned price-sensitive pax into the "Staying home category."

However, let''s take the mythical $198 ticket that becomes $225--the feds just gave the airlines back enough security fee to make it a $205 ticket--and the airlines promptly made the base fare $210, in effect pocketing that difference and _keeping the total cost above the very threshold they (the airlines) were complaining about_.

It''s such a line of BS, it''s almost funny. They (the feds) cut 10 bucks out of the security fee, and the big six promptly raise R/T fares by $10. Certainly, that''s not going to do anything for our price-sensitive consumer, now is it?

 

[TomBascom]

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On 5/26/2003 6:53:42 PM N305AS wrote:
If you think about it though, the problem wasn''t the price per se, but the "gotcha!" of the extra costs tacked on.

In other words, the customer who saw "$198.00" advertised and said to themselves, "Hmm. Sounds like a good deal!" were pretty ticked off when they called to find the extra charges they hadn''t counted on, pushing it to $225.00.

Now, fast forward to now, where the government rolls back the taxes. The airline advertises a $225.00 fare, the customer says, "Hmm. Sounds like a good deal!" and lo and behold....it''s still $225.00 when the customer is giving their credit card information for the purchase!

THAT is the major difference, IMHO. When people know you''ve advertised a product for X number of dollars, they do not perceive any value when told they must actually pay X plus Y. By eliminating the extra taxes, the customers calling in about the special fare advertised (X), they don''t expect to pay more than X when all is said and done. It doesn''t matter that today''s "X" is slightly higher than the "X" from several weeks or months ago, as people know fares fluctuate.
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Good recovery but that isn''t what they were saying.

Furthermore almost all of that "gotcha" is still there and isn''t going away.

Nor is it unique to airfare -- have you paid for a hotel room or rented a car lately? Taken out a mortgage? Bought groceries?

People who know fares fluctuate also know about the gotcha.

 

[N305AS]

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On 5/26/2003 6:01:55 PM ClueByFour wrote:


I think Tom''s point was this:

The airlines whined about the security fees and taxes combining to push many of the aforementioned price-sensitive pax into the "Staying home category."

However, let''s take the mythical $198 ticket that becomes $225--the feds just gave the airlines back enough security fee to make it a $205 ticket--and the airlines promptly made the base fare $210, in effect pocketing that difference and _keeping the total cost above the very threshold they (the airlines) were complaining about_.

It''s such a line of BS, it''s almost funny. They (the feds) cut 10 bucks out of the security fee, and the big six promptly raise R/T fares by $10. Certainly, that''s not going to do anything for our price-sensitive consumer, now is it?


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If you think about it though, the problem wasn''t the price per se, but the "gotcha!" of the extra costs tacked on.

In other words, the customer who saw "$198.00" advertised and said to themselves, "Hmm. Sounds like a good deal!" were pretty ticked off when they called to find the extra charges they hadn''t counted on, pushing it to $225.00.

Now, fast forward to now, where the government rolls back the taxes. The airline advertises a $225.00 fare, the customer says, "Hmm. Sounds like a good deal!" and lo and behold....it''s still $225.00 when the customer is giving their credit card information for the purchase!

THAT is the major difference, IMHO. When people know you''ve advertised a product for X number of dollars, they do not perceive any value when told they must actually pay X plus Y. By eliminating the extra taxes, the customers calling in about the special fare advertised (X), they don''t expect to pay more than X when all is said and done. It doesn''t matter that today''s "X" is slightly higher than the "X" from several weeks or months ago, as people know fares fluctuate.

 

[PITbull]

Well, If U wants more than what we gave them to succeed (twice, mind you in less than a year) then start eliminating VPs. 33 is just too many for a work force that got reduced by 19,000 and an operation that got reduced by 30%. What this company is worried about, is since they went first, they don't want any of the other major carriers getting a better deal than they got from their labor groups. I believe they want to keep the threats and door open to take more and use any excuse they can.

With all the cost savings from EVERYONE IN THE WORLD had given to this management, short of coming to work as a volunteer, they should be in OK waters. If not, change the business plan focusing on simplifying fares and one or two types of fleet, and market the airline.

The recent "bail out" tax payor monies of $216 million given to the company should help preserve jobs and give the company substantial relief for the next few months. Plus, the 5% they stole from us should be an unbelievable god send. U's burn rate should have subsided substantially. If it hasn't, then someone or group is stealing.

Mostly everyone I know in this business is ready for the doors to shut. I sold my house, downsized substantially and I am more ready now than ever... "let it rip".

PS. the article in June 2 issue of Business Week talks about the Industry. It states that U has only lost 6,700 jobs or 19% since 2002.. We lost 5,200 in flight attendant jobs alone where we presently sit today. We are close to a 50% reduction in total at U. They cite that the cost savings from the employees at U is at $1.2 Billion as of 2002. In Jan. of 2003 we added another 600 Million in cost saving (NOT COUNTING THE PILOTS TERMINATED PENSION SAVINGS) bringing the total to 1.8 Billion...get this... as much as American and they are 2/3 BIGGER than U. So, you can imagine what they've taken from the U employees, being we are much samller work force. ...yup, we aren't surviving either. I am sure if the economy was better, I believe, many of the hard working skilled employees would be out looking for jobs that support their familes. Many of U employees would be gone. U would have mostlyt high school kids looking for "play" money or folks that basically like volunteer work or just want some place to go in the morning.

 

[Tim Nelson]

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On 5/26/2003 5:37:51 PM usjacket wrote:

Enough of the threats! If your going to pull the plug on some of the best airline employees in the world Dave, just do it ! This is the most anti-employees CEO and management since Lorenzo! Hats off to the great job everyone has been doing in the face of such intimidation! Yes I am pissed!

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Our company most certianly has parallels to Lorenzo[ism].

Tim Nelson

 

[USA320Pilot]

Hi Dfw79:

Dfw79 said; "When did the CRJ-700 Series 705 suddently become the CRJ-705? That would mean there isn''t a CRJ-700 anymore, according to ALPA, since the 70-seater is the Series 701 or CRJ-701 by their standards."

Chip answers: Dfw, Letter of Agreement #83, Accelerated Small Jets, states US Airways can operate "up to 25 "Large SJs", specificially limited to the CRJ-700, may be placed into revenue operation at a Participating Wholly-Owned Carrier, other than MDA."

According to Aviation Daily, US Airways, launch customer for Embraer 170, is also slated as the first customer of Bombardier’s CRJ-700 variant - the -705. The 75-seat -705 is a variant of the -700 that is dimensionally "the same as the CRJ-900," a Bombardier spokesman said. The -900 is Bombardier’s largest regional jet, seating 86 passengers in a single class configuration. The spokesman stressed the -705 has its own type certification and manuals. The 82,500-pound maximum takeoff weight of the -705 meets the weight limits in the US Airways pilot scope clause of just under 86,000 pounds.

Chip’s OpEd Comment: The ALPA Restructuring Agreement states "Large SJs" are defined as jet aircraft having a certificated capacity of 51-70 seats and a certificated maximum gross takeoff weight not greater than 75,000 pounds, except the EMB-170/175, and the airline is specifically limited to the CRJ-700, not the CRJ-705, which exceeds the size authorized in the regional jet agreement. The ALPA Supplemental Restructuring Agreement states up to 25 "Large SJs", specifically limited to the CRJ-700, may be placed into revenue operation at a Participating Wholly-Owned Carrier, other than MDA. US Airways’ order for 25 CRJ-705 aircraft violates the ALPA contract and if the Arlington-based airline attempts to take delivery of these aircraft, this move could be a major violation of the CBA.

Dfw, this issue has the potential to become a major dispute that could go directly to the NMB within 60 days. If the NMB agrees with ALPA''s grievance, then ALPA would be free to seek self-help and strike, which very easily could occur over this egregious contract violation.

ALPA will not permit the company to disregard our contract now that US Airways is out of bankruptcy. Dave Siegel wants to place an RJ into service that could be re-configured for 86-seats, which will be a threat to the 120-seat mainline aircraft and clearly violates our CBA.

Best regards,

Chip

 

[FM2436]

"If SWA is the business model that we should have been striving for,then this would have been the opportunity to impliment it.Unfortunately,Dave and co. let the chance slip away."

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If your going to adopt the Southwest model the first thing that needs to be done is do away with the entire Express system. Its no secret that in 2001 (latest FAA figures) the largest 67 airports in the US enplaned 89% of all airline passengers (the remaining 335 airports enplaned on 11%). Quit trying to connect a few passengers from small markets into many markets and focus on flying a larger number of passengers into a few of the largest markets in the US.

 

[N305AS]

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On 5/26/2003 7:37:05 PM TomBascom wrote:

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On 5/26/2003 6:53:42 PM N305AS wrote:
If you think about it though, the problem wasn''t the price per se, but the "gotcha!" of the extra costs tacked on.

In other words, the customer who saw "$198.00" advertised and said to themselves, "Hmm. Sounds like a good deal!" were pretty ticked off when they called to find the extra charges they hadn''t counted on, pushing it to $225.00.

Now, fast forward to now, where the government rolls back the taxes. The airline advertises a $225.00 fare, the customer says, "Hmm. Sounds like a good deal!" and lo and behold....it''s still $225.00 when the customer is giving their credit card information for the purchase!

THAT is the major difference, IMHO. When people know you''ve advertised a product for X number of dollars, they do not perceive any value when told they must actually pay X plus Y. By eliminating the extra taxes, the customers calling in about the special fare advertised (X), they don''t expect to pay more than X when all is said and done. It doesn''t matter that today''s "X" is slightly higher than the "X" from several weeks or months ago, as people know fares fluctuate.
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Good recovery but that isn''t what they were saying.

Furthermore almost all of that "gotcha" is still there and isn''t going away.

Nor is it unique to airfare -- have you paid for a hotel room or rented a car lately? Taken out a mortgage? Bought groceries?

People who know fares fluctuate also know about the gotcha.

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With all due respect, Tom...that IS what they were saying.

Do you honestly begrudge the airlines a modest fare increase, though? I''m starting to think that with you, they''re damned if they do and damned if they don''t and either way, they''re still wrong.

 

[diogenes]

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On 5/26/2003 11:18:53 AM PineyBob wrote:


So the question then becomes "How much of the differential is related to antiquated work rules and how much is related to the hub and spoke business model?" All six major hub & spoke carriers are saddled with arcane and antiquated work rules! The one that gets smart and negotiates them away in exchange for a substantial profit sharing arrangement wil be a winner



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Hi, PB, let me take a swing at that one.

I know for a fact that fleet and customer service''s wages at U were LOWER than WN''s, PRIOR to concessions - 21.33 at U; 25 at WN. Fleet and customer service''s wages were generally lower than the big 4''s all during the 1990''s, when the big 4 were making money.

Fleet and customer service did not unionize until 1999. Prior to that, management had 100% discretion in the direction (work rules) of and compensation to these work forces. During the 1999 ratifications, we ratified, with few minor, and NO major changes to, the corporate policy guide. So for the past however far back you want to go, we have been at management''s discretion.

More to the point, management does not take advantage of what they have. In all Class II locations, cross utilization is allowed by contract between customer and fleet service. IT NEVER HAPPENS! Rather than fully utilize existing staff, our management sonsab*tches would rather cut our pay some more. That''s why we don''t trust them. They don''t use the tools they have - they just keep hitting us in the back pocket.

This was going on all thru the 90''s, which is why we unionized. In retrospect, it would have been smarter to find another job.

I posted in 1999, if the only thing standing between US and profits is the WN contract, BRING IT ON! That''s even more true, today.

Meanwhile, back at the ranch, one of our honcho''s just started house construction in SXM.

You know, I used to be able to afford to vacation there. Wonder if he''ll loan me the housekeys?

 

[TomBascom]

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On 5/27/2003 1:41:45 PM N305AS wrote:
With all due respect, Tom...that IS what they were saying.

Do you honestly begrudge the airlines a modest fare increase, though? I''m starting to think that with you, they''re damned if they do and damned if they don''t and either way, they''re still wrong.
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0) Trying to pass this fare increase off as "savings from reduced security fees" is fundamentally dishonest.

1) They''ve been saying that $10 (or less) in the total ticket price is depressing travel and hurting profitability.

2) Airlines have been steadily increasing fares since deregulation. Say all you want about how low the lowest fares have become but the "business" fares have gone up far faster than the "leisure" fares have dropped.

3) I strongly support an increase in the average fare if it is coupled with dramatic decrease in "business" fares and the elimination of 99.44% of the rules and restrictions that most tickets currently carry. And I put my money where my mouth is -- when I can find tickets that fit the bill I buy them. Even though it costs me substantial time, effort and frustration to hunt them down.

 

[delldude]

i tell you...my patience over this issue is and has come to an end.....if we need more givebacks,well my friend.....this is the end for me.i''ve had enough.
i will find another alternative,i will not give in to a never ending collage of boosheet of give backs.
the dude has spoken