Stipidity Again!

[youngblood]

UA does outsell us on our own flights in select markets, but we do the same to them. I have yet to discover why. Fares are an unsolved mystery and quite frankly I have given up on trying to understand the whole concept.

By the way FF are becoming useless for one reason. Everybody under the sun has credit cards that earn miles. Every airline literally has millions of FFs. The ratio of passengers vs. seats available is so out of wack that if we opened up availability to accomodate people using award tickets plus those using RTFCs, we wouldn't have a revenue seat on the plane. I sympathize for those who actually earn their miles by traveling.

 

[BoeingBoy]

Art said this...

"The problem is that the overall revenue model is broken, and no one wants to fix it. I have posted before the comments of one of the VPs of the company who I spoke with not long ago. He acknowledged that there is a problem, but that there was no way they could fix it without reducing costs more."

I think we all know that America West simplified their fare structure last year and said that it enhanced revenue.

Now Air Canada is jumping on the band wagon...

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Airline Outlook
Air Canada to Include U.S. Cities in Simplified Low-Fare Structure
Aviation Week & Space Technology
02/02/2004, page 15

Edited by Frances Fiorino

WIN-WIN

Air Canada is expanding its new, simplified low-fare structure to include 80 U.S. destinations. The carrier's plan, introduced in May 2003, reduced the number of fare categories to six from 24 and was initially dedicated to travel within Canada. The carrier claims to have tripled bookings since the plan's inception. By late January, 10 U.S. destinations will be available, and by spring 2004, all 80 U.S. cities now served by Air Canada will be added. Meanwhile, Air Canada is supporting current U.S.-Canadian efforts to liberalize the countries' 1995 open skies arrangement. CEO Robert Milton said an expanded agreement would be a "win-win solution" that would strengthen economic ties between the countries as well as boost business and tourism.
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Maybe we need some VP's that will "think outside the box" instead of spending their time coming up with reasons why doing something different will not work.

Jim

 

[TomBascom]

By the way FF are becoming useless for one reason. Everybody under the sun has credit cards that earn miles. Every airline literally has millions of FFs. The ratio of passengers vs. seats available is so out of wack that if we opened up availability to accomodate people using award tickets plus those using RTFCs, we wouldn't have a revenue seat on the plane. I sympathize for those who actually earn their miles by traveling.

This is not accurate.

First of all people generally earn miles on a credit card on a one to one basis -- you'll have to spend $25,000 to earn a free trip. That's not exactly passing out free trips like candy. It's also a serious revenue source for the company -- you make something like $0.02 per mile for CC miles but, according to your 10-k the trip costs you $16. Net profit on the "free trip" = $484. You'd do well to stop selling tickets and only carry DM rewards obtained through credit cards... B)

Second -- the outstanding balance of miles is equivalent to approximately 7 million trips. About 1.3 million are taken per year. That sounds like a lot until you see that 47 million revenue passengers were carried last year. IOW "free trips" are about 2% of customer traffic.

 

[usfliboi]

Actually Tom Its not too far from the truth. Id LLC s continue FF programs are in for some major changes. The old saying of freebies for those who pay more and nothing for those who pay close to cost comes to mind. I understand that these changes are ready to hapen across the board in all airlines.

 

[ClueByFour]

Actually Tom Its not too far from the truth. Id LLC s continue FF programs are in for some major changes. The old saying of freebies for those who pay more and nothing for those who pay close to cost comes to mind. I understand that these changes are ready to hapen across the board in all airlines.

Gee, wilbur.

US tried it, and backed down before they implemented it.

DL tried it, and lost so much revenue over the course of a year that they rescinded many of their changes.

And, in the biggest irony, the biggest LCC has a program that considers a ticket to be a ticket for the purposes of their FF program.

People who are truly price insensitive don't need to be motivated to fly one carrier or the other. You don't need to promote loyalty. People who are price sensitive require some coddling.

US, as a direct result of BBB's hubris, has lost almost $50k in very high yeild bookings from me (mostly short notice transatlantic bookings, some without a weekend stay) due to BBB's little attempt last year. US continues to get my cheaper business.

Much of my expensive (meaning fares that give BBB wood just thinking about them) business has gone to AA (who rewards me for such business but does not punish me when I buy a cheap ticket). And I still fax a receipt over to consumer affairs every now and again to prove the point.

 

[blueoceans]

Fliboy does have a point. Coupons don't grow on trees. It's all in the price, and some sort of mild-to-serious changes are coming to fare structure. We can do without the sexual innuendos, thanks.