Where Was Us Airways' Media People?
- Thread starter EyeInTheSky
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Good point... But its possible that there are 1700 fares which could be applied to people on that particular flight as there might be 10 fares from BUF-PIT-MIA, 10 fares ERI-PIT-MIA, 10 fares CLE-PIT-MIA, etc. What the reporter wasn't smart enough to do, and the broad audience would not understand anyway, was to determine the yield per mile of each passenger. The folks who paid $190 BWI-PIT-MIA really only paid around $155-$160 for the PIT-MIA portion, pro-rated. Now the other person who paid $1115, where did they start their journey? PIT, DTW, LAX? That would make a difference. However it would be more apples to apples to say somebody paid $0.25/mile to be on the plane vs someboday else paying $10/mile...whlinder said:
GadgetFreak
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A few observations.
whlinder, US should not be trying to squeeze the most out of every flight. They should be trying to build the most profitable long term business. The fact that they have been doing what you suggest and have been bankrupt once and are quite possibly about to go out again pretty much proves my point. If it doesnt, the huge number of people who start flying Southwest in PHL soon will prove it. People wont even look at US in many cases. They have seen the high fares and it wont matter to them that there are lower fares. Their perception of US is formed by the past fares, and the chickens are coming how to roost as they say.
Also, this is just the beginning of the bad press. Wait until the action starts in PHL.
I talked to people who lived in Baltimore. One of them was moaning about having to take a flight on "US Despair" before SW moved in. And this wasnt some guy out to do his one trip a year for $8, he was a psychiatrist.
The policies of US and the others have led them to this point, competent management I think should have seen it years ago. I hope it isnt too late.
It isnt the role of the press to support US, but rather to support the general public, in this case the customer. I didnt see the story but from what I read it was largely accurate. If US doesnt want people telling stories like this they shouldnt charge fares like that.
Lastly, a whole bunch of people in US Corp communications should probably be flogged for this.
whlinder, US should not be trying to squeeze the most out of every flight. They should be trying to build the most profitable long term business. The fact that they have been doing what you suggest and have been bankrupt once and are quite possibly about to go out again pretty much proves my point. If it doesnt, the huge number of people who start flying Southwest in PHL soon will prove it. People wont even look at US in many cases. They have seen the high fares and it wont matter to them that there are lower fares. Their perception of US is formed by the past fares, and the chickens are coming how to roost as they say.
Also, this is just the beginning of the bad press. Wait until the action starts in PHL.
I talked to people who lived in Baltimore. One of them was moaning about having to take a flight on "US Despair" before SW moved in. And this wasnt some guy out to do his one trip a year for $8, he was a psychiatrist.
The policies of US and the others have led them to this point, competent management I think should have seen it years ago. I hope it isnt too late.
It isnt the role of the press to support US, but rather to support the general public, in this case the customer. I didnt see the story but from what I read it was largely accurate. If US doesnt want people telling stories like this they shouldnt charge fares like that.
Lastly, a whole bunch of people in US Corp communications should probably be flogged for this.
biztraveller29
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Ummm... am I missing something here? Haven't you employees been screaming for ways to maximize revenue, get a more rational fare structure in place, etc.? And now when the media points out the EXACT SAME ISSUES that you were pointing out, you raise hell?
As far as I can tell, the reporter didn't slam US Airways flight crews. You guys are saying all the reasons that fares may have changed within a few minutes, but I think the point was that maybe that's not the best way to do business.
I go to Southwest's website and check for BWI-FLL roundtrips, and I am give FIVE fare choices. And when it's unavailable, it says "fare unavailable". If the reporter had tried to do a fare survey on a WN flight, it would have been a "non-story", because the fares range from a $59 promotional fare (which is still available on most flights on 5/11), to a "Refundable Anytime" fare of $195.
The point of the story is US Airways has a ridiculously complicated fare structure and is losing money by the bucket-full. Southwest has an extremely simple (and reasonable) fare structure and is making money. Coincidence?
Getting angry at a reporter for pointing out everything we already KNOW seems a little absurd.
As far as I can tell, the reporter didn't slam US Airways flight crews. You guys are saying all the reasons that fares may have changed within a few minutes, but I think the point was that maybe that's not the best way to do business.
I go to Southwest's website and check for BWI-FLL roundtrips, and I am give FIVE fare choices. And when it's unavailable, it says "fare unavailable". If the reporter had tried to do a fare survey on a WN flight, it would have been a "non-story", because the fares range from a $59 promotional fare (which is still available on most flights on 5/11), to a "Refundable Anytime" fare of $195.
The point of the story is US Airways has a ridiculously complicated fare structure and is losing money by the bucket-full. Southwest has an extremely simple (and reasonable) fare structure and is making money. Coincidence?
Getting angry at a reporter for pointing out everything we already KNOW seems a little absurd.
One of the interesting points made here by many is that Southwest doesn't always have the lowest fare -- and this is absolutely true. But their business model isn't built upon selling lots of deeply discounted fares. They rely on a large proportion of their customers (35-40%) purchasing modestly-priced full (refundable) fares. Why dump a bunch of your inventory as cheap seats when you can sell a good bit of it at a decent profit?
Southwest's customers book with them consistently because they know they will be offered a predictably fair price for a predictable product. In this way, they are very much like Wal-Mart or a wholesale club. You don't always get the absolute lowest price possible, but you know that you won't feel cheated. Take Nashville-Houston on Southwest -- the lowest Internet Special is $99 each way, while full fare is $175 each way. Even if you end up paying full fare, you won't feel cheated that the passenger next to you paid about 55% what you did -- compare that to the disparities in the fares reported in the news report.
Southwest has raised BWI fares since Metrojet pulled out -- by about 20% on BWI-PVD, for example. But by comparison, US raised its fares on PIT-PHL by about 150% after AirTran pulled out.
Southwest has targeted US Airways' markets because the average fares are high, which makes it easier for them to go in and drive traffic up with lower fares. Until US revamps its pricing structure, its markets will continue to be attractive to the LCC's.
Southwest's customers book with them consistently because they know they will be offered a predictably fair price for a predictable product. In this way, they are very much like Wal-Mart or a wholesale club. You don't always get the absolute lowest price possible, but you know that you won't feel cheated. Take Nashville-Houston on Southwest -- the lowest Internet Special is $99 each way, while full fare is $175 each way. Even if you end up paying full fare, you won't feel cheated that the passenger next to you paid about 55% what you did -- compare that to the disparities in the fares reported in the news report.
Southwest has raised BWI fares since Metrojet pulled out -- by about 20% on BWI-PVD, for example. But by comparison, US raised its fares on PIT-PHL by about 150% after AirTran pulled out.
Southwest has targeted US Airways' markets because the average fares are high, which makes it easier for them to go in and drive traffic up with lower fares. Until US revamps its pricing structure, its markets will continue to be attractive to the LCC's.
You make it sound like Wal-Mart or wholesale clubs are pleasant places to shop. I would disagree. I hate those places with a passion.sfb said:
. . . . .
Regarding the idea of a government imposed minimum fare ala the CAB -- sure, I'll accept that, as long as there is also a government mandated maximum wage for the airline employees. What's good for the goose is good for the gander, right?
ELP_WN_Psgr
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Govt imposed minimum fares? bad idea. Bad bad bad. Here's why....
Let's say the government looks at the average ASM cost of a dime.
LA to NY....2400 miles or so. The govt figures you ought to be able to haul an average load factor of, say, 60%.
So, the government decrees you cannot sell tickets for less than $400 between NY and LA.
What does that do to the size of the market?
It shrinks.
When the markets shrink, there is a much lower demand for airline employees. And aircraft.
The number of flights are reduced.
When the number of flights drop, congestion diminishes.
Diminishing congestion means that airports like LGA and DCA become viable destinations for the WNs of the world.
You don't think WN would react to this? With their ASM cost being 25-40% less than other folks.....what they would do is turn those 737-700s into Cadillacs.....5 abreast seating throughout, 35 or 36" pitch.
It would reduce their capacity but there would be no advantage to having a lower ASM cost...what would be an advantage is the ability to give someone a better product at the same (govt dictated) price.
If you have a choice between a large leather seat, 5 abreast in a 737-700, with 36" of legroom....or a 6 abreast seat in the Y cabin on USAirways et all with 30" of pitch, who you gonna call?
Truly, the only real answer to the insanity is let the free market do what it must.
Let's say the government looks at the average ASM cost of a dime.
LA to NY....2400 miles or so. The govt figures you ought to be able to haul an average load factor of, say, 60%.
So, the government decrees you cannot sell tickets for less than $400 between NY and LA.
What does that do to the size of the market?
It shrinks.
When the markets shrink, there is a much lower demand for airline employees. And aircraft.
The number of flights are reduced.
When the number of flights drop, congestion diminishes.
Diminishing congestion means that airports like LGA and DCA become viable destinations for the WNs of the world.
You don't think WN would react to this? With their ASM cost being 25-40% less than other folks.....what they would do is turn those 737-700s into Cadillacs.....5 abreast seating throughout, 35 or 36" pitch.
It would reduce their capacity but there would be no advantage to having a lower ASM cost...what would be an advantage is the ability to give someone a better product at the same (govt dictated) price.
If you have a choice between a large leather seat, 5 abreast in a 737-700, with 36" of legroom....or a 6 abreast seat in the Y cabin on USAirways et all with 30" of pitch, who you gonna call?
Truly, the only real answer to the insanity is let the free market do what it must.
Jim, You're exactly right ! I can remember back in the late 70's people whining about Regulation, Now you got people whining about DE-regulation. Like it or not, The U.S. is a capatialistic society, supply and demand.. Has anyone checked the gas prices lately ???BoeingBoy said:
I'll give you that both Wal-Mart and wholesale clubs are a bare-bones shopping experience. But then, for a large number of passengers, air travel doesn't need to be much more than a (safe) bare-bones experience, either. Air travel is a commodity for passengers who only care about getting from Point A to Point B on time, and that describes the vast majority of passengers in the back of the plane. Nordstrom, Nieman-Marcus, Bloomingdale's, etc. all offer a higher-end product than Wal-Mart or wholesale clubs, but you pay for the privilege (if you pay full markup) and they all have far smaller market share.JS said:
As ELP said, re-regulation might guarantee a certain minimum fare on your routes, but that doesn't mean that the passengers will still be there. If the minimum fare from BOS to MCO goes up to $200, for example, how many people will choose to drive their families down to Disney instead of flying? Your average yield would certainly go up, but there would be a lot fewer people flying and total revenue for the airline would crater. And that does mean fewer flights, fewer jets, and a lot fewer employees. Moreover, probably the least affected airline would be WN for two reasons -- first, their costs are so low that they'd make enormous profits at those fares and second, they probably do the most intrastate flying of any major carrier. Given that intrastate commerce may not be regulated by the federal government, they'd still be free to price as they like within Texas, California, Florida, etc. -- and you might see them enter larger intrastate markets like PIT-PHL, ISP/NYC-upstate NY, etc.
If you re-regulate fares, how do you decide whose costs to use to set them? Do you base them on the most efficient or least efficient operator in the market, or simply on an average? How do you compete if a lower-cost operator improves its product beyond yours in competitive markets (let's say, individual TV's, free alcohol, greater pitch in coach, etc.)?
I thought that was the point...JS said:
Anyway, the bottom line is that Deregulation has been good for the consumer. In the early 1980's, the lowest transcon fare, one-way, became available at about $99 for certain restricted, advance purchase fares. And now, 20 years later, despite increasing fuel costs, increasing labor costs (despite the concessions of today, I am sure people are being paid wages greater than 1984), etc, the manufacturers of these airplane fares have maintained the $99 one-way transcon fare... How? More efficient airplanes, more efficient use of airplanes, more efficient use of every seat on the airplanes, more efficient use of crews and airport facilities (i.e. compare the growth in new runways to the growth in passengers).
Now the reality is that the $99 fare will not be around forever because there may not be any more inefficiencies to work out, but clearly, any politician who voted on legislation to increase the cost of Joe Average's Family Vacation to Disney would be quickly dismissed from their office.
Reregulation is not only not the answer, but unlikely to occur for political reasons.
BoeingBoy
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sfb,
For whatever my opinion is worth, I agree with you. The deregulation "genie" is out of the bottle and probably can't be stuffed back in.
The one thing that hasn't been mentioned about the "good old days" of regulation is that the CAB determined who flew where. Allegheny (then), Piedmont, even Eastern (among others) were constrained in which markets they could serve.
Jim
For whatever my opinion is worth, I agree with you. The deregulation "genie" is out of the bottle and probably can't be stuffed back in.
The one thing that hasn't been mentioned about the "good old days" of regulation is that the CAB determined who flew where. Allegheny (then), Piedmont, even Eastern (among others) were constrained in which markets they could serve.
Jim
ok i read the article and in theory i agree with the general principle as follows airlines understand the seat they sell is a commodity, a product that has 0 shelf life you can not store it after you create it then discount it you must figure your costs (thus price for profit) before you even create the product in the first place (for those of you wondering about this.... it means the seat between PIT/MIA is not actually created until the flight pushes back)
Customers on the other hand want/expect prices to be the same for most products with the advent of internet time pricing and the ability to walk from a"bestbuy" to a circuit city and see the exact same price for the same product.
ok listen up it is not the same product. 144 people on that flight as evidenced by at least one responder (bwi pit mia). THEY ALL DONT FLY FROM JUST PIT TO MIA wouldnt that make life simple. maybe the 1000.00 fare came from OVERSEAS? or a short walk up fare from the other side of the country?
Shabby reporting at best. Typical i have a point and will use video/print or data to skew it in my favor to prove my point. and since USAIRWAYS or others dont get to broadcast a rebuttal it therefore must be the truth.
what a shame. Ask those same 144 people how many live/ originated in PIT or MIA (if return flight) then ask how much they paid that would have been a more accurate pricing story.
So what you (the public) expect to go n/s or e/w for what 200 bucks (probably round trip) ok. first drive it how much is GAS 1000 mile trip average car gets what 25 mpg is 40 gallons of gas at 1.75 per gallon = 70 dollars in gas alone
1000 miles/60mph =16.67 hrs (no stopping) so call it 20 hrs 1 hotel room 50 bucks at the 1/2 way point so now your up to 120 bucks. throw in what 10 for breakfast 10 for lunch and 20 for dinner. and in 2 days you can be from PIT to MIA for what 160 bucks oh yeah double that you want to return right? so now your at 320 bucks to drive and out 4 days. how much is your time worth? and you can cut costs by sharing your space down and back of course the people will have to travel on your exact days. oh wait thats what the airline does every day you only travel once but that flight leaves every day so the seats are there the one time you wish to go.
now lets see what happens to the Greater PIT area should UAIR pull out.
some 5000 direct jobs leave. direct payroll per year in the area (not including leases) 250 million so thats what 17million in payroll tax. those people live in houses that pay taxes too. thats gone and you can count on them going from PAYING taxes to COLLECTING unemployement. now throw in the Leases and Corporate taxes paid by the company and the numbers grow more. and guess what those numbers will not be replaced at all. even EVEN if a southwest the next day flew the same fllights to the same places (wages/leases everything would be less forget training centers, forget hotel revenues ect) thus that money is simply NOT Recoverable. it would be in the best intrests of the area to support the local airline as much as possible seems to me.
side note : UAIR and its employees in the state of NC pay on a yearly basis just over 500million in taxes/fees ect in the state of NC alone. the entire government loan was for 900million thus in the first 6months post bankrupcty of operation alone the governement recouped all that money at risk in taxes collected from the company and its 29000 employees. now reverse it. 29000 collecting unemployment and paying 0 taxes. Say what you like but the "bailout program" already worked on stricly a cash flow basis down to the state level.
whats your thoughts?????????
Customers on the other hand want/expect prices to be the same for most products with the advent of internet time pricing and the ability to walk from a"bestbuy" to a circuit city and see the exact same price for the same product.
ok listen up it is not the same product. 144 people on that flight as evidenced by at least one responder (bwi pit mia). THEY ALL DONT FLY FROM JUST PIT TO MIA wouldnt that make life simple. maybe the 1000.00 fare came from OVERSEAS? or a short walk up fare from the other side of the country?
Shabby reporting at best. Typical i have a point and will use video/print or data to skew it in my favor to prove my point. and since USAIRWAYS or others dont get to broadcast a rebuttal it therefore must be the truth.
what a shame. Ask those same 144 people how many live/ originated in PIT or MIA (if return flight) then ask how much they paid that would have been a more accurate pricing story.
So what you (the public) expect to go n/s or e/w for what 200 bucks (probably round trip) ok. first drive it how much is GAS 1000 mile trip average car gets what 25 mpg is 40 gallons of gas at 1.75 per gallon = 70 dollars in gas alone
1000 miles/60mph =16.67 hrs (no stopping) so call it 20 hrs 1 hotel room 50 bucks at the 1/2 way point so now your up to 120 bucks. throw in what 10 for breakfast 10 for lunch and 20 for dinner. and in 2 days you can be from PIT to MIA for what 160 bucks oh yeah double that you want to return right? so now your at 320 bucks to drive and out 4 days. how much is your time worth? and you can cut costs by sharing your space down and back of course the people will have to travel on your exact days. oh wait thats what the airline does every day you only travel once but that flight leaves every day so the seats are there the one time you wish to go.
now lets see what happens to the Greater PIT area should UAIR pull out.
some 5000 direct jobs leave. direct payroll per year in the area (not including leases) 250 million so thats what 17million in payroll tax. those people live in houses that pay taxes too. thats gone and you can count on them going from PAYING taxes to COLLECTING unemployement. now throw in the Leases and Corporate taxes paid by the company and the numbers grow more. and guess what those numbers will not be replaced at all. even EVEN if a southwest the next day flew the same fllights to the same places (wages/leases everything would be less forget training centers, forget hotel revenues ect) thus that money is simply NOT Recoverable. it would be in the best intrests of the area to support the local airline as much as possible seems to me.
side note : UAIR and its employees in the state of NC pay on a yearly basis just over 500million in taxes/fees ect in the state of NC alone. the entire government loan was for 900million thus in the first 6months post bankrupcty of operation alone the governement recouped all that money at risk in taxes collected from the company and its 29000 employees. now reverse it. 29000 collecting unemployment and paying 0 taxes. Say what you like but the "bailout program" already worked on stricly a cash flow basis down to the state level.
whats your thoughts?????????
It does sound like this reporting was shabby and sensational. But what else do you expect from the local news? Most local news commercials go like this:
"There is something in YOUR HOUSE RIGHT NOW! And, it is KILLING YOUR CHILDREN RIGHT NOW! Do you want to know what this horrible awful thing is? Then tune in at 11PM"
Then, when you tune in, it turns out to be a story about how candy is making children obese, thus it was "candy" and "snacks" that are "killing your children right now.
Ok, so my example might be a little extreme, but regardless, it inspires little faith in local news to report on anything.
And again, even if they did take 15 minutes, do some analysis, and explain it to Joe Average Local TV news viewer, it would either go over many heads, or put some folks to sleep at 11 instead of 11:30.
"There is something in YOUR HOUSE RIGHT NOW! And, it is KILLING YOUR CHILDREN RIGHT NOW! Do you want to know what this horrible awful thing is? Then tune in at 11PM"
Then, when you tune in, it turns out to be a story about how candy is making children obese, thus it was "candy" and "snacks" that are "killing your children right now.
Ok, so my example might be a little extreme, but regardless, it inspires little faith in local news to report on anything.
And again, even if they did take 15 minutes, do some analysis, and explain it to Joe Average Local TV news viewer, it would either go over many heads, or put some folks to sleep at 11 instead of 11:30.
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