This is the HP model, once we start managing the east fares you will see less and less super discount fares and also less of the high end. It is more about the middle pricing. I never fly AWA on a paid fare anymore because I cannot get a cheap ticket on a Friday or a Sunday no matter how far out you buy. But YM is smart they know once SW sells out those cheap fares people will pay more and they do and they have the LF to prove it. Perfect case in point try and price a PHX-LAS Friday to Sunday 3-4 months out LUV is giving those seats away and HP is not but ask anyone at PHX or LAS the HP flights are always full!
US Airways Lowers Fares in 20 East Coast Markets
- Thread starter 700UW
- Start date
Well, the other point of all of this is that it makes a heck of a lot more sense to sell ROC-PHL for $99 each way than it does to sell ROC-MCO for $59 each way with a connection at PHL. Or you sell SYR-PIT for $99 instead of SYR-TPA for $69, connecting at PIT.
What isn't said here is that the BloFares are still around, even in the advertised markets. The lowest PHL-CLT fare that doesn't require at least 7 days' advance purchase is still $576 each way.
This particular pricing strategy will not keep WN (or FL or B6 or NK or F9) out of your markets. Southwest sells between 30 and 40 percent of its tickets at the full refundable fare. If they can drop the refundable fare by $300-500 in a market, they will sell a ton of them. WN's refundable PHL-RDU fare is $93; the new lowest fare for PHL-CLT is $139. They could come in on PHL-CLT and undercut US's new bargain fare by 30-40% with a fully refundable walk-up ticket priced between $95 and $105.
What isn't said here is that the BloFares are still around, even in the advertised markets. The lowest PHL-CLT fare that doesn't require at least 7 days' advance purchase is still $576 each way.
This particular pricing strategy will not keep WN (or FL or B6 or NK or F9) out of your markets. Southwest sells between 30 and 40 percent of its tickets at the full refundable fare. If they can drop the refundable fare by $300-500 in a market, they will sell a ton of them. WN's refundable PHL-RDU fare is $93; the new lowest fare for PHL-CLT is $139. They could come in on PHL-CLT and undercut US's new bargain fare by 30-40% with a fully refundable walk-up ticket priced between $95 and $105.
I very much expect the realy high fares to go away too. That is part of the model, but they will do it slow and prudent as not to just be giving away revenue. They will not use a magic number for all markets like LUV. Each market will be maximized and rationalized individualy!
US1YFARE
Veteran
- Mar 31, 2004
- 3,932
- 54
They should be starting with the FC fares because the product does not justify the fares being charged.
MarkMyWords
Veteran
- Aug 20, 2002
- 1,900
- 1
Now that is just rude! :angry:And have you seen the changes in YM? Have you seen the differences in how we sell tickets and the revenue changes? I would suspect no.
Stick to what you know.....
longing4piedmont
Veteran
- May 19, 2003
- 1,291
- 6
Blue Water? :bleh:
MarkMyWords
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- Aug 20, 2002
- 1,900
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AIRWOMAN
Veteran
- Oct 20, 2005
- 3,440
- 0
How many actualy but those fares?
At AWA before Scott and Doug did the big fare revamped that pissed off all the other airlines almost nobody ever bought those $800-$900 each way FC fares. It was strictly an upgrade thing. Now you can buy FC fares for as little as $150 more than your coach price and AWA has seen FC revenue sky rocket! I expect the same will happen for LCC.
SpinDoc replies:
A long, long, time ago, American Airlines
invented revenue management. That began the
downfall of the legacy carriers because
all of the sudden, the airlines had the
ability to change their fares 4 times per
day to meet elastic demand, and at the
same time, they could hold 30 or 40 seats
per flight in the highest fare bucket for
the last minute traveler. The problem is,
revenue management led to the raping of
the business traveler, when rational
everyday pricing would have been
a better option, and would have guaranteed
higher average revenue per flight.
Many studies have been done which show
that revenue management programs have been
miserable failures. Let's hope that HP
knows how to price rationally to ensure
the flights are full, at a higher average
fare. Just like WN had been doing for
many years.
barbeetantrums
Veteran
Several years ago, AWA implemented this simpler and less expensive fare model. The CEO of Continental immediately decided to eliminate the code-share agreement in retaliation. Bethune stated that AWA would be out of business within one year. Well, revenue increased, AWA didn't go out of business and CO hasn't been missed.
AIRWOMAN
Veteran
- Oct 20, 2005
- 3,440
- 0
FFS 700!! This is a NEW airline now. Stop living in the past..........embrace the future. Educate yourself a bit on how HP/AWA has operated the past few years and see how things have changed. And they are going to continue to change. Leave the bankruptcy's behind and move forward.
