Us Airways Announces 'gofares,'

[Cfm56]

>>>"We have heard our customers loudly and clearly. They have told us that fares are too high, too complicated, and that we need to do something about that -- and we are," <<<


What a joke...as if USAirways is doing this out of the goodness in their hearts. Obviously if not for SWA and other LCCs USAirways would still be financially raping the PHL market. My, what an original and innovative reaction. What hypocrites!!! So spread the philosophy to the whole system. PIT and CLT "rappees" haven't been screaming for lower fares? Sure, but not enbough LCCs in those markets....yet. Unlike U, SWA has had near monopolistic markets such as DAL-HOU for years but always kept the fares low which has kept out competition and a high level of goodwill. You think if SWA pulled out of PHL U wouldn't raise fares?

Now...how U is to make money at the low yields will be very interesting to watch.

 

[BoeingBoy]

Some "quick & dirty" math shows these costs per ASM for the May routes (CASM of 11.68 cents X distance):

PHL-ORD 78.96
PHL-FLL 116.33
PHL-LAS 253.46
PHL-MCO 100.80
PHL-PHX 241.78
PHL-PVD 27.57
PHL-TPA 107.69

Seems to me that the keys to making money are:

1) yield management - not selling too many of the lowest fares, which are at best breakeven on some routes.

2) add capacity - generating more seat miles with rolling hubs/increased aircraft utilization lowers CASM.

Jim

 

[100above;DH]

CFM; I respectfully disagree w/ your "What A Joke" comment. Fares, alike pricing nationwide, are certainly affected by competition and other variables, all ECON 101. As to your rapeing of customers in PIT and CLT, I too disagree. Just yesterday I shopped for an hour for fares for my family of 4 PIT-MCO. No other carrier (LCC or not) can get me there non-stop which is a big deal w/ kids and the U fare was a ridiculously low $148 ROUNDTRIP. Airtran via Atlanta was far more $ w/ no perks associated w/ U. I think ALL the folks associated w/ U should be praising the ever absent marketing at U. This is a very unique and quirky approach which combined w/ traditional radio and tv coverage may be exactly what U needs to take on the "Goliath" of LCC's. U is certainly not rolling over and playing dead, Kudos to marketing; hopefully all other groups will also "Butch Up" in philly!

 

[Non Rev]

But why wait? Do it NOW for CLT and keep JetBlue Out. Be a leader not a follower, but again it is a step in teh right direction. We all have seen what this type of thinking has done for America West, it has saved their company.

I was goofing around yesterday and found 14 day advance purchase ONE WAY fares for $138.00 in several florida markets out of CLT. There was also a 7 day advance purchase tier but i do not remember the amount.

 

[matika]

This is a distant relative of innovation. Let's hope it leads somewhere.

 

[ClueByFour]

I agree it's a good move, but the press release makes a really big deal of stating that they're going to match SW's fares.

Exactly.

This is nothing more than matching LUV. If you are a US customer not from PHL, and you don't feel like someone just kicked you in the teeth, you are not getting it.

This is simply "we matched" hype. Nothing innovative here.

 

[Art at ISP]

This is a very good start, but please remember that this is just the beginning!!

I believe they will roll this out system wide over the next few weeks, and I do believe that it will result in overall improved revenue as AVERAGE fares come up.

All I can say is. it's about time!

For the naysayers, let's give it a chance--it's definitely a positive move.

I am flying through CLT this afternoon--I hope to see some of my friends there.

Thanks and my best to you all.....

 

[AtlanticBeach]

Seems to me that the keys to making money are:

1) yield management - not selling too many of the lowest fares, which are at best breakeven on some routes.

2) add capacity - generating more seat miles with rolling hubs/increased aircraft utilization lowers CASM.

Jim

The BoeingBoy gets an A+ in economics. Unfortunately, the company has been using the "Shrink the supply" mantra for too long.

If demand rises as quickly as it has for other carriers with this fare structure, it will soon be time to dust off some desert metal.

 

[CLT-Douglas]

"We have heard our customers loudly and clearly. They have told us that fares are too high, too complicated, and that we need to do something about that -- and we are,"

I litterly laughed out loud when I read that line. How lucky for PHL? They get low fare service from Southwest and now US Airways seems to think maybe they charged people too much before so now is the time to do something about that... but only in PHL for now. How heart warming for the other hub cities.

So what happens if that 1% chance or whatever it is that Southwest eventually gives up on PHL in the future. Do they just add letters to Gofares and call it Gougefares and begin to rip everyone off again?

 

[USA320Pilot]

This move is expected to dramatically lower revenue, thus for it to be successful unit costs must come down more than revenue for the company to be profitable.

In addition, this news will send shock waves throughout the industry.

Respectfully,

USA320Pilot

 

[RWerksman]

In addition, this news will send shock waves throughout the industry.

And this shockwave would be what?


This was completely expected.

 

[ClueByFour]

In addition, this news will send shock waves throughout the industry.

That a legacy carrier matched LUV's fares?

I guess they have don't many lines ex-LGA via RDU, BWI, BNA, MCO, PHX, LAS? If US did, perhaps you might have a better chance to see what every other carrier in the world has to deal with when LUV comes to town. Is BWI really that faded in the US institutional memory that matching LUV's fares is "sending shock waves throughout the industry?"

I trust you are joking. Or following the Ben Baldanza playbook.

 

[tadjr]

This move is expected to dramatically lower revenue,

OK, I can understand the revenue lowering in the cases where we have to match the Southwest dirt cheap fare, but you dont have to offer that on all flights all day long. The other mid level fares are basically what we've been offering already, except without the restrictions now so hopefully with inventory doing their job, that part of the equation wont change much. AND the company keeps saying no one (very few) is paying the high priced end, so how is that going to dramatically lower revenues? I can honestly say that during the past few months during Spring Break when we were oversold in Y and had to upgrade people, I could very very rarely find anyone on anything booked in Y (except 50000 mile awards) and seldom booked in B (the two "business fare" categories). I'm sure if rolled out systemwide there will be some major business markets where this could be a problem, but I just dont see it in most of the markets we serve. I guess this is where inventory is going to have to do some major tweaking.

 

[RWerksman]

This is nothing more than matching LUV. If you are a US customer not from PHL, and you don't feel like someone just kicked you in the teeth, you are not getting it.

Spot on.

This wasn't "rolled" out, it was "FORCED" out be the entrance of Southwest. If it were launched at PIT or CLT, or if at least it was eluded to that this would happen I would not be on my way to the oral surgeon.

 

[pk45cu]

This isn't new or innovative. They just stuck a marketing label to their WN matching fares.

It would be new only if they did this on monopoly routes like PHLPIT or semi-competitive routes like PHLSEA WITHOUT WN announcing service on those routes. For me, a true low fare airline is one that has low fares even if there is no competitive gun pointed at the head.

I know they said more will phased in, but I suspect that every new phase will involve only new Southwest cities.

As for not raping CLT pax, for every low fare example you can show me, I can show you a high fare example. I flew PHL to MCO on Mon and back on Tue. Made the booking last Fri, less than 3 days notice. US was asking $800+ on their non-stops. I flew DL through ATL for $365. I am willing to pay a non-stop premium but not more than double the price.