Management Out To Get Senior Agts

[reznc]

They have reports they can print on waivers completed by each agent the reason for the waiver etc. Sounds to me like these agents were being honest, as there is always ways around getting things done without putting waivers in.

 

[sfb]

As some of you say, fare rationalization and simplification may only be revenue neutral, with the benefit realized by reducing costs. I still maintain, however, that the POTENTIAL is there for it to be revenue positive, IF done right.

I agree that it can be revenue positive. Total O&D revenue at PHL was actually up between the 3rd quarters of 2003 and 2004 even though average fares dropped by roughly 25%. Southwest picked up a reasonable piece of the revenue that probably could have been US Airways' alone had they rationalized fares on their own.

Delta found that SimpliFares at CVG were revenue-positive -- or at least that is what has been reported.

I firmly believe that if such a rationalization took place, AVERAGE fares would rise, as more people might pay a bit more for flexibility. I know I would pay $50 more to be able to change, rather than $100 plus fare difference--that's a no brainer.

I'm not sure average fares would rise, but if US were to focus on O&D traffic more than connecting traffic, that would help as well. It is insane to charge $400 walk-up from, say, BUF to PHL while offering a walk-up fare of half that or less between BUF and MCO connecting in PHL.

I drove to the IAD area on Wednesday because the lowest airfare I could get on either UA or US was about $500 for a round trip--I could not justify this expense to see one customer (although multiple locations). At $250-$300 it was a done deal. And these prices were from LGA--ISP was over $900!!

I realize you really, really, really hate Southwest (it's got to be more than the lack of assigned seats or first class, since neither Dash-8's to PHL nor RJ's to IAD offer first class and a middle seat for 60 minutes never killed anyone...), but why wouldn't you take advantage of flyI's cheap fares to go from JFK to IAD (they do offer assigned seating AFAIK)? I've never understood the way you torture yourself by connecting through PHL.

 

[mweiss]

I agree that it can be revenue positive. Total O&D revenue at PHL was actually up between the 3rd quarters of 2003 and 2004 even though average fares dropped by roughly 25%.

Of course it is. But we shouldn't be looking from the perspective of total revenue; we should be looking from the perspective of RASM. Maximizing revenue doesn't necessarily translate into maximizing profits, if one ends up selling at a loss and trying to make it up in volume.

 

[BoeingBoy]

Ah, but maximizing revenue is still a good thing. Even if selling as a loss, it minimizes the loss - which is better than what happens when you don't maximize revenue. It's just that CCY appears to believe that the only way to maximize revenue is by charging high fares where you can while Art and others (including myself) believe there's a better way.

And that's leaving aside our fairly static ASM's (mainline, anyway) - anything that increases revenue almost automatically increases RASM. This is different from the situation at WN, B6, and FL, where they need to add revenue faster than ASM's to increase RASM.

Jim

 

[mweiss]

Ah, but maximizing revenue is still a good thing. Even if selling as a loss, it minimizes the loss

Not necessarily. If your unit costs aren't changing, and you're producing more units, it can actually increase your loss.

It's just that CCY appears to believe that the only way to maximize revenue is by charging high fares where you can while Art and others (including myself) believe there's a better way.

I'm with you there, in part because the better way could also increase unit revenue and decrease unit costs.

And that's leaving aside our fairly static ASM's (mainline, anyway) - anything that increases revenue almost automatically increases RASM.

OK, but what's missing here is the recognition that the increase in revenue is not going to US. SFB looked at total revenue and ignored the change in revenue distribution.

 

[BoeingBoy]

Not necessarily. If your unit costs aren't changing, and you're producing more units, it can actually increase your loss.

[post="252974"][/post]​

At least in theory, increasing unit production should decrease unit cost. Obviously, though, increasing unit production thru the addition of higher cost units (RJ's) can have the opposite effect - which is why I don't like the "fill the skys with RJ's" plan.

OK, but what's missing here is the recognition that the increase in revenue is not going to US. SFB looked at total revenue and ignored the change in revenue distribution.

[post="252974"][/post]​

I'm with you there (and somehow doubt that sfb disagrees). Where US has messed up is in waiting to rationalize fares till a LCC enters a market. The result has been splitting the (increased) revenue, with US revenue generally declining. At this point it's perhaps only wishful thinking to wonder what would have happened if US had implemented GoFares system-wide when they were first announced (ala DAL).

Jim

 

[RedOne]

Why not restrict waivers being done by everyone except supervisors or managers? (If you're not trusted to make decisions...why make them?) If your computer sign will not allow waivers, simply tell the customer, NO CAN DO. If you can't find a supe/mgr...SORRY, TODAY, NO-BODY CAN DO. Then the customer can call reservations/customer relations/whomever, and let them handle. If you know big brother is watching and they are out to nail people, the customer be damned.... (apparently that's what CCY wants)...you gotta look after yourself. Haven't you seen that commercial....."NO...nada...etc" The company is NOT going to listen to agents...they MIGHT listen to a customer.

 

[diogenes]

Red, you crack me up.

Sadly, folks are making that decision.

 

[sfb]

OK, but what's missing here is the recognition that the increase in revenue is not going to US. SFB looked at total revenue and ignored the change in revenue distribution.

BoeingBoy is right here, and you do have a point, in that I ought to have been clearer in what I said (it was late and I was tired). Gross O&D revenue is up at PHL, though it's likely that US's PHL O&D revenue is somewhat lower in that there are more players sharing a pie that is a few percent larger. The numbers show that WN went from no presence in markets like PHL-PVD and PHL-MHT in 1Q04 to over 60% share in 3Q04.

But, as Jim clarified for me (thanks!), much of that O&D revenue could have been kept by US Airways, rather than giving it up to Southwest, by choosing to rationalize fares before Southwest forced them to do so. Their model for opening new cities relies on stimulating lots and lots of new traffic by dramatically lowering fares. Traffic increased ten-fold on PVD-PHL and MHT-PHL after WN entered these markets. The increase in traffic led to 90% higher revenue on PVD-PHL and 102% higher revenue on MHT-PHL even in spite of fares dropping by over 80% in both markets. Even so, the volume of traffic in both markets is lower than the capacity US was offering before Southwest's entry AND the average yields are still around 20 cents per mile. As it turns out, US's revenue on PHL-PVD post-WN is down about 10% because they took only 36% of the market.

My guess is that US's revenue at PHL is down somewhat, but again, this is largely because the bigger revenue pie is being split among more competitors. If US had chosen to rationalize pricing on its own, the picture might well be different. That's why I gave a brief mention of Delta's experience with SimpliFares at CVG. Even if it resulted in a slight reduction in revenue, their fare simplification/reduction has the added side benefit of making CVG a less attractive target for LCC's.

 

[mweiss]

much of that O&D revenue could have been kept by US Airways, rather than giving it up to Southwest, by choosing to rationalize fares before Southwest forced them to do so.

They could have kept it all. However, in order to do so, they would have had to throw more seats on the route, too. If they have to throw more seats on the route, they're not throwing the seats on there at 7 cents, either. That's why I made the "lose on every seat, make it up in volume" comment.

Even if it resulted in a slight reduction in revenue, their fare simplification/reduction has the added side benefit of making CVG a less attractive target for LCC's.

[post="253040"][/post]​

This is a good reason for such actions, provided you can expect to bring unit costs down below unit revenue.

 

[RedOne]

Red One,

The company has a very difficult time listening! The customer as the enemy permeates the industry.......FFOCUS continues to pound away at CCY on a few basic themes, one of which is you can't have true customer satisfaction without employee satisfaction.

[post="253041"][/post]​

PineyBob,
On a serious note I think everyone, (customers, vendors, sub-contractors, aircraft makers, airports, empoyees....EVERYONE) thinks they are CCY's enemy... or at least they are treated as such. I don't think CCY really listens to you the customer. I know they don't listen to employees...there is no communicatiion line (with the exception of usa320). Until there is new leadership, especially in key positions, there will be no real communications. I don't think labor will ever trust and work with some of the "top dogs" who are there now.

 

[Art at ISP]

II realize you really, really, really hate Southwest (it's got to be more than the lack of assigned seats or first class, since neither Dash-8's to PHL nor RJ's to IAD offer first class and a middle seat for 60 minutes never killed anyone...), but why wouldn't you take advantage of flyI's cheap fares to go from JFK to IAD (they do offer assigned seating AFAIK)?  I've never understood the way you torture yourself by connecting through PHL.

[post="252945"][/post]​

SFB, just because I refuse to fly Southwest, doesn't mean I hate them. For the leisure traveler and non frequent business traveler I would assume they are fine. But to me and many of my fellow frequent travelers, they are no better than getting on a bus. There are many reasons why I won't fly Southwest and other LCC's-a main one being the lack of interline capability when something goes wrong. I will not fly airlines which I consider to be third rate, as is my right to do so, and I do not owe you an explanation of why. And Independence Air is a joke--reliability rating non existent.

The closest I have come to flying an LCC was a trip on Jet Blue--which was okay, and met my lowered expectations.

Most importantly, I choose to stay loyal to US because of the excellence of their employees. Although price is important, the knowledge that the service is there when needed is important as well--and very rarely do US people let me down. That would definitely not be the case elsewhere--and FFOCUS is dedicated to making CCY see this.

My best to you all.....

 

[usairways_vote_NO]

Most importantly, I choose to stay loyal to US because of the excellence of their employees. Although price is important, the knowledge that the service is there when needed is important as well--and very rarely do US people let me down. That would definitely not be the case elsewhere--and FFOCUS is dedicated to making CCY see this.

My best to you all.....

[post="253129"][/post]​

Think of how much better it could be if the employer treated the employees better. What is sad is better service without a better business model and lower fuel costs is not going to pay the bills.

 

[Art at ISP]

UVN,

As unbelievable as it seems, you and I agree completely on this one. We have always tried to make mgmt. aware of how great the employees are--we keep saying you can't have happy customers without happy employees....maybe one day they will get it.

My best to you all....

 

[Finish or Ignore]

PineyBob,
I don't think CCY really listens to you the customer. I know they don't listen to employees...there is no communicatiion line (with the exception of usa320). Until there is new leadership, especially in key positions, there will be no real communications. I don't think labor will ever trust and work with some of the "top dogs" who are there now.

[post="253056"][/post]​

Sadly, this is EXACTLY correct.