http://enplaned.blogspot.com/2005/11/whats...ock-symbol.html
The new US Airways chose a stock symbol (LCC, short for Low Cost Carrier) with attitude. It’s one of only two airline stock symbols that aren’t somehow related to the airline’s name, the other being LUV for Southwest. It’s a Statement with a capital S.
Fine, so US Airways talks the talk, but does it walk the walk? Is LCC in fact a Low Cost Carrier? Depends what that means. Low costs needn’t mean low fares, just as high costs haven’t meant high (average) fares for the legacy carriers the last few years. But what most people think of as a low-cost carrier is something like Southwest, with a low cost, low fare philosophy. Does US Airways have that?
On the fare side, not even close. One way walk-up pricing on Philadelphia (PHL) to Binghamton (BGM) is $459 for this 166 mile sector, according to US Airways' own website. Binghamton is part of the US Airways Northeast gulag, smaller cities that haven’t seen significant airline competition since the old US Air swallowed Piedmont back in 1987. These are exactly the places that need a healthy dose of low fares. So far the new US Airways hasn’t offered any relief.
This isn’t much of a surprise if you’ve followed the actions of America West (which supplied the management to the new US Airways). In our view, the true test of the low cost carrier philosophy is how the airline acts when it has a monopoly. Does it continue to provide low fares or does it take the consumer to the cleaners? America West typically failed that test. For instance, so far as we can tell, on its monopoly route from Phoenix (PHX)) to Washington National Airport (DCA) America West (and now US Airways) has always had high prices (currently $599 one way walk up, but we recall much more in the past, pre-caps). Southwest, by comparison, has a $299 one way walk up fare.
Compare, for instance, to Southwest’s behavior on, say, Albuquerque (ABQ) to Las Vegas (LAS). This is a monopoly non-stop route for Southwest, yet Southwest’s walk-up fare is still just $171 for this 486 mile sector according to Southwest’s website. This is high for Southwest, but it’s still very reasonable compared to US Airways’ behavior on PHL-BGM.
We believe that “low cost carrier†is a state of mind, a philosophy of not charging high fares even when you can (we’ll discuss why you’d do this in a later post). Southwest has always had this philosophy—in fact, Southwest invented it. It’s early days yet, so there may still hope for the US Airways gulag, but US Airways does not yet appear to subscribe to the low cost carrier philosophy, despite it’s stock symbol.
The new US Airways chose a stock symbol (LCC, short for Low Cost Carrier) with attitude. It’s one of only two airline stock symbols that aren’t somehow related to the airline’s name, the other being LUV for Southwest. It’s a Statement with a capital S.
Fine, so US Airways talks the talk, but does it walk the walk? Is LCC in fact a Low Cost Carrier? Depends what that means. Low costs needn’t mean low fares, just as high costs haven’t meant high (average) fares for the legacy carriers the last few years. But what most people think of as a low-cost carrier is something like Southwest, with a low cost, low fare philosophy. Does US Airways have that?
On the fare side, not even close. One way walk-up pricing on Philadelphia (PHL) to Binghamton (BGM) is $459 for this 166 mile sector, according to US Airways' own website. Binghamton is part of the US Airways Northeast gulag, smaller cities that haven’t seen significant airline competition since the old US Air swallowed Piedmont back in 1987. These are exactly the places that need a healthy dose of low fares. So far the new US Airways hasn’t offered any relief.
This isn’t much of a surprise if you’ve followed the actions of America West (which supplied the management to the new US Airways). In our view, the true test of the low cost carrier philosophy is how the airline acts when it has a monopoly. Does it continue to provide low fares or does it take the consumer to the cleaners? America West typically failed that test. For instance, so far as we can tell, on its monopoly route from Phoenix (PHX)) to Washington National Airport (DCA) America West (and now US Airways) has always had high prices (currently $599 one way walk up, but we recall much more in the past, pre-caps). Southwest, by comparison, has a $299 one way walk up fare.
Compare, for instance, to Southwest’s behavior on, say, Albuquerque (ABQ) to Las Vegas (LAS). This is a monopoly non-stop route for Southwest, yet Southwest’s walk-up fare is still just $171 for this 486 mile sector according to Southwest’s website. This is high for Southwest, but it’s still very reasonable compared to US Airways’ behavior on PHL-BGM.
We believe that “low cost carrier†is a state of mind, a philosophy of not charging high fares even when you can (we’ll discuss why you’d do this in a later post). Southwest has always had this philosophy—in fact, Southwest invented it. It’s early days yet, so there may still hope for the US Airways gulag, but US Airways does not yet appear to subscribe to the low cost carrier philosophy, despite it’s stock symbol.
