Simple Fair Structure

[PITbull]

I meant first of the so-called "Big Six". HP and AS are ahead of the curve. US for the first time in recent memory is at least on the curve.

[post="197087"][/post]​

Bob,

Please explain in rational terms how U is "on the curve", when they went from a $34 million 2 quarter profit, to 3 months later reporting a staggering $232 million loss? Gofares took off in and around June.

Way I see it, the company needed to "rationalize the fares" in PHL, improve the product without adding cost, vs lowering the fares to match SW,

What we have proven with those losses is decreasing our ability to stay in business.

 

[whlinder]

US talks like they are "on the curve" but have yet to act like it. They tell us all that Go-Fares will be system wide... but when will that be? When there is a LCC fare match on 100% of their city pairs? Save for a few select cities, Go-Fares are still marketing. Delta's CVG Simpli-fares are true rationalization, and thus ahead of the curve and US Airways.

The sad reality is that eventually most domestic fares will have a LCC presence in the market, and thus all airlines will either have to be able to make money at LCC fares or offer incremental value which attracts additional revenue. Aer Lingus is seeing the benefits of simplified fares, but few airlines have matched their fares. If you are lower than everyone else, you are going to get traffic. But if US made every market a Go-Fare, the legacies would be out in force matching. Would US be able to increase total revenue? I'm very skeptical.

Right now it looks like AS has found the best model for the legacies, where they still require a RT purchase on some of their lower fares. I think a fare structure composed of only one-way fares is too simple and leaves potential revenue on the table. Interestingly, AS has led the industry in unit revenue improvement this year.