Please Open Your Books To Chapter 7,class

[KCFlyer]

Think I'll change my screen name to CLUE YOU IN, because I am going to Clue You In.

If you think that after the airline industry’s shake down there will remain $49 tickets to anywhere on the planet you are dreaming. It's a dog eat dog world out there and the LCC giving tickets away for ridiculously low prices is unsustainable long term, trust me this too will end and the LCC will become the Legacies and the story will replay with different names.

[post="170609"][/post]​

The problem with that is this...the LCC's offer a $60 fare and the legacies offer the $49 fare to "protect market share". Happens all the time.

And, I believe you're wrong in that assumption...LUV is the only choice between MCI and STL. Price of a fully refundable one way ticket, bought a half hour before flight time? $74. No competition from anybody. I remember when TWA was the only game on that route and charged $250 for a one way ticket.

 

[BoeingBoy]

FWAAA,

I've seen that sentiment express numerous times by several different people. Unfortunately, that doesn't make it so.

If the consumer set fares, you'd see them saying something like "I'll only pay $49 for a F/C seat from PHL to LAX" and the airline would say "Ok, if that's all you'll pay then here's your ticket". That's the consumer setting the fares.

Instead, what you see is a tendency for consumers to gravitate to the low cost providers, paying the fare set by that provider (not the consumer).

What this produces is competitive fares (at least on the bottom end) being offered by the higher cost providers. But again, those fares are set by the providers, not by the consumer.

The consumers' role is merely to decide whether to pay whatever fare is set by the various producers that offer the service that consumer wants.

Jim

 

[cavalier]

The problem with that is this...the LCC's offer a $60 fare and the legacies offer the $49 fare to "protect market share". Happens all the time.

And, I believe you're wrong in that assumption...LUV is the only choice between MCI and STL. Price of a fully refundable one way ticket, bought a half hour before flight time? $74. No competition from anybody. I remember when TWA was the only game on that route and charged $250 for a one way ticket.

[post="170620"][/post]​

They "LUV" are heavy union and in fact the mechanics in the next few years will be making $40 an hour, just the mechanics, so how long before the party is over and they too become overly burdened with costs?

It can’t go on forever, and it won’t.

The mighty soon fall, they always do.

 

[sdavis29]

I am dead wrong?

just not 100% correct.

only the iam was on strike....the others honored the picket line...

EA was Lorenzo, look up your airline history and all unions ALPA, IAM and TWU went on strike at EA.

Flight attendants who were members of Transport Workers Union Local 553, headed by Mary Jane Barry, joined with members of the Air Line Pilots Association in refusing to cross picket lines of the International Association of Machinists and Aerospace Workers. The IAM maintenance and ground crew members were on strike against Eastern Airlines and its notorious owner, Frank Lorenzo.------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
But I love how you non-IAM members can speak for 5,000 Mechanic and Related and 6,000 Fleet service members, you must be aweful busy talking to 11,000 IAM Members.




WOW,

roughly 28,000 employees.......and 11,000 of them iam...go figure.

39%.....hummmmmm


no wonder they have there sights pointed that way.

 

[Phantom Fixer]

Why does everyone use the figures of 28,000 employee's at U ???

Those figures may have been true in 2003....but after the numerous retirements , terminations , deaths and the eagerness of others to move on with life , those figures are heavily slanted for arguement sake.

My guesstimation would be that we are in the 25 to 26k range at best. Many vacancies are being filled from within.and then the vacancy created by doing so is not being backfilled at all. You aren't seeing people coming back from furlough in any of the areas that I deal with.

I look to see U at a level of around 20,000 when all the smoke clears...and that is is if we survive at all????????

 

[Bluestreak]

Cav writes: They "LUV" are heavy union and in fact the mechanics in the next few years will be making $40 an hour, just the mechanics, so how long before the party is over and they too become overly burdened with costs?

You forgot to mention LUV mechanics allow the heavy maintence work to be out sourced. Maybe some of those costs savings are being passed on to the workers via higher wages?

 

[700UW]

Luv moneywise outsources 46% of maintenance dollars, they perform C-checks in-house, have a wheel and brake shop and some others, they accomplish 1/4 D-checks in-house and they are bringing in more work.

And at US the company does outsource, engines, instruments, some flight controls and things we cannot do in-house. What our contract does not permit is outsourcing heavy mtc checks.

 

[cavalier]

Cav writes: They "LUV" are heavy union and in fact the mechanics in the next few years will be making $40 an hour, just the mechanics, so how long before the party is over and they too become overly burdened with costs?

You forgot to mention LUV mechanics allow the heavy maintence work to be out sourced. Maybe some of those costs savings are being passed on to the workers via higher wages?

[post="170647"][/post]​

Wrong.

They do what are called "D" checks which are even heavier check then we do. They only farm out "12%â€￾ of their work.

I was there in Dallas and talked to management and the mechanics, was all thru the hangers. I was thinking of working there, so I know what I am talking about.

They are already are spooling down a little with a hiring freeze.

It will come full circle some day, it's the nature of the best.

 

[KCFlyer]

They "LUV" are heavy union and in fact the mechanics in the next few years will be making $40 an hour, just the mechanics, so how long before the party is over and they too become overly burdened with costs?

It can’t go on forever, and it won’t.

The mighty soon fall, they always do.

[post="170625"][/post]​

You're right...their costs will go up. But they are making .30 cents per mile for that MCI-STL one way ticket. The lowest fare I can get on them on an advance purchase round trip is $91...still almost .18 cents per mile. Their costs are around 8 cents per mile, so they still have a LOT of room to accomodate their costs going up.

The problem with U and others is that in many cases, they feel a need to "out LCC the LCC's", so THEY offer a plane full of $49 fares while the LCC's have filled their alloted seats at that fare level and bumped their prices up. But market share is too valuable in management's eyes to give up that easy, so the legacies keep filling seats with far more $49 fares than Southwest, Airtran or JetBlue. So they are number 1 in market share, and can't turn a dollar in profit.

 

[funguy2]

Think I'll change my screen name to CLUE YOU IN, because I am going to Clue You In.

If you think that after the airline industry’s shake down there will remain $49 tickets to anywhere on the planet you are dreaming. It's a dog eat dog world out there and the LCC giving tickets away for ridiculously low prices is unsustainable long term, trust me this too will end and the LCC will become the Legacies and the story will replay with different names.

[post="170609"][/post]​

Unless the LCC's learn something from the Legacy failures. In which case, the cycle could end or at least be less dramatic.

$49 fares will go away because of the cost of fuel... Not because of the LCC's becoming legacies... $49 fares in the face of $49/bbl oil is unsustainable.