Why Should We Stay?

[longing4piedmont]

[post="259960"][/post]​

With the exception of the first paragraph where you are not entirely accurate about why the roaches were formed (although what you mention was one reason) this was an excellent post.

I tip my hat sir.

 

[Art at ISP]

I have to admit, I also concur for the most part.

The DM program does currently provide extra rewards for higher fares..there are qualifying mileage bonuses for unrestricted fares. Positive reinforcement is better than penalizing for use of low fares. Also, for the record, I rarely get to take advantage of the artificially low fares. Most of what I have been taking lately is fairly priced albeit still considered discount.

KC, a RATIONAL fare structure would do wonders for the bottom line-on this we agree.

Thank you for an excellent post...

 

[pitflyer]

I think it's the fares too. What really is a 'fair' fare. With Southwest having $99 each way across the country regularly, everyone, including myself, works to that goal. Now I fly weekly PIT-ATL roundtrip and basically I pay between $99 and $129 one way with 7 days advance notice, which I consider fair for a 2 hour, 500 mile flight. I've paid this amount for both my business and personal trips without much heartburn.

However, with the cost of fuel rising, I wonder if it still makes money for Delta on the 525 mile trip. USAirways is of course out of the question, since they fly 4 RJ flights while Delta files 9 flights on MD-80s and 1 RJ. AirTran flies 5 717s a day on the route, which is why it's relatively cheap for a business route.

 

[Art at ISP]

Pitflyer,

I think fair would represent something different to different people. For example, on a LGA-CLT round trip, I would consider $300-$400 r/t fair, or even little higher for a totally unrestricted fare, while I would consider $900-$1000 as it had been out of the question. I think it's time to tie the price of a ticket more closelyto the actual COST of transportation.

If I use the high figure of 11 cents a mile, considering an O/D case, it COSTS approximately $59.40 to transport one passenger between LGA and CLT, assuming it's about a 540 mile trip. Therefore at $150-$200 each way, it is profitable for the airline, and I think it would be considered fair by most passengers, especially business travelers.

I realize I am oversimplifying the matter, but I was once told that if the bottom fares could be raised by $20, the top end fares could come down by about $300. The person who told me this was BBB himself.

I don't think it will ever be perfect, but a rational fare structure would be a big step in the right direction.

Also, for what its worth, I had a conversation with someone familiar with DL who told me that long term, simplifares are revenue positive.

My best to you all.....

 

[BoeingBoy]

Now I fly weekly PIT-ATL roundtrip and basically I pay between $99 and $129 one way with 7 days advance notice, which I consider fair for a 2 hour, 500 mile flight. I've paid this amount for both my business and personal trips without much heartburn.

[post="260015"][/post]​

What you've just described is part of a rational fare structure - something near and dear to Art's heart.

Those fares equal a yield of roughly 19 to 24 cents. Using an average 66% LF, that works out to roughly 14 to 18 cents PRASM if everyone paid those fares- enough for DL to make money, even more so for Airtran.

Throw in a higher walk-up fare (say $149-169) and a lower bottom fare ($69 or $79), and you have your money-making rational fares.....

Jim

 

[pitflyer]

What you've just described is part of a rational fare structure - something near and dear to Art's heart.

Those fares equal a yield of roughly 19 to 24 cents. Using an average 66% LF, that works out to roughly 14 to 18 cents PRASM if everyone paid those fares- enough for DL to make money, even more so for Airtran.

Throw in a higher walk-up fare (say $149-169) and a lower bottom fare ($69 or $79), and you have your money-making rational fares.....

Jim

[post="260018"][/post]​

Makes sense to me. I'm not sure how much of the PIT-ATL market fare realities is due to AirTran and how much is due to Delta Simplifares. When AirTran first started service we had ridiculous $49 each way fares .. that was nice, but unsustainable. Now AirTran very rarely drops the price that far. What's interesting is that in my experience the fares you quoted are right -- I've gotten as low as $69 each way when there's a _really_ good fare sale, and I paid about $199 for a walk-up fare one-way. In any case, I did not feel soaked, and it seems like Delta made money.

Too bad in six years of flying USAirways I never felt that way.. I still complain about the $2000 R/T I paid to fly from PIT-LAX on last minute fares. The other carriers were not much better back then, either. I now pay about $800 R/T for that flight on AA or DL (my company's preferred carriers).

 

[JS]

Pitflyer,

I think fair would represent something different to different people. For example, on a LGA-CLT round trip, I would consider $300-$400 r/t fair, or even little higher for a totally unrestricted fare, while I would consider $900-$1000 as it had been out of the question. I think it's time to tie the price of a ticket more closelyto the actual COST of transportation.

If I use the high figure of 11 cents a mile, considering an O/D case, it COSTS approximately $59.40 to transport one passenger between LGA and CLT, assuming it's about a 540 mile trip. Therefore at $150-$200 each way, it is profitable for the airline, and I think it would be considered fair by most passengers, especially business travelers.

I realize I am oversimplifying the matter, but I was once told that if the bottom fares could be raised by $20, the top end fares could come down by about $300. The person who told me this was BBB himself.

I don't think it will ever be perfect, but a rational fare structure would be a big step in the right direction.

Also, for what its worth, I had a conversation with someone familiar with DL who told me that long term, simplifares are revenue positive.

My best to you all.....

[post="260017"][/post]​

If you realize that you are oversimplifying, why do you keep throwing out these garbage numbers like $59.40 to fly LGA-CLT?

Repeat after me: You cannot charge fares equal to your systemwide average cost. (or cost+10% or cost+20% or anything that rigid). It will not work, period.

SimpliFares are better than BloFares, though it does require lower costs to make it work. Even then, sometimes Delta charges "less" than it costs, and sometimes "more" than it costs, depending on many different factors. I put "less" and "more" in quotes because costs do not occur on one route, or on one flight, or in one seat, in a vacuum.

 

[BoeingBoy]

Repeat after me: You cannot charge fares equal to your systemwide average cost. (or cost+10% or cost+20% or anything that rigid). It will not work, period.

[post="260024"][/post]​

In theory it would as long as you didn't lose passengers due to the fares. Of course, no one is suggesting a single fare for each route based on cost+whatever.

SimpliFares are better than BloFares, though it does require lower costs to make it work. Even then, sometimes Delta charges "less" than it costs, and sometimes "more" than it costs, depending on many different factors. I put "less" and "more" in quotes because costs do not occur on one route, or on one flight, or in one seat, in a vacuum.

[post="260024"][/post]​

For the specific fare structure called SimpliFares, I suspect you'd need DL's cost structure or lower to make it work (we'll find out if it works for them in time, I guess).

But for a simplified fare structure you only need to taylor it to a specific carriers cost structure. Obviously, a high cost carrier would require higher fares as part of that simplified fare structure than a low cost carrier and that's the rub. The bottom fares must be close enough to any lower cost competition to keep from losing too much traffic to them - meaning you have to sell enough higher fare to make that up. That's where product differentation comes in.

You dislike people using averages, but what really matters is that the average PRASM exceeds the average CASM. If it does, the airline makes money. Any way of achieving that relationship between those two averages will do.

Jim

 

[KCFlyer]

If you realize that you are oversimplifying, why do you keep throwing out these garbage numbers like $59.40 to fly LGA-CLT?

Repeat after me: You cannot charge fares equal to your systemwide average cost. (or cost+10% or cost+20% or anything that rigid). It will not work, period.

SimpliFares are better than BloFares, though it does require lower costs to make it work. Even then, sometimes Delta charges "less" than it costs, and sometimes "more" than it costs, depending on many different factors. I put "less" and "more" in quotes because costs do not occur on one route, or on one flight, or in one seat, in a vacuum.

[post="260024"][/post]​

JS,

Yesterday you chastised me for my "flippant" answers as "solutions'. So I sat down and composed what I felt was a well thought out reply. It involved the fares. It was something that Art and L4P actually agreed with me on. Jim offered some addtional info. But you come back with "you cannot charge fares equal to your systemwide average costs", which by the way, I ,nor Art, L4P, or Jim did. So instead of some flippant remark to shoot down a suggestion, how about putting your accounting mind to work and tell us just what YOU think needs to be done?

 

[Hawk]

WHY SHOULD WE STAY????????

I appreciated your comments concerning US Airways.

Differentiation is the key to survival and success in any business. Service is, therefore, the best strategy for competing in the marketplace. Being on par in terms of price and quality only gets you into the game. Service wins the game.

Our front line employees are the best in the industry. I can assure you that all of the employees are knowledgeable with the Airways' product. We value their dedication and commitment in seeing that each customer has a memorable experience with US Airways. Every single contact between any employee and a customer is an important contact. These moments of magic create a lasting impression that promotes a positive relationship.

Effective communication is the key to building and maintaining long-term customer based relationships. The Customer Advisory Board is an excellent avenue for the FFOCUS members to discuss the concerns that you have expressed on this forum. Satisfied customers are the backbone of our business.

Again, thank you for the valuable feedback. We appreciate your business.

 

[700UW]

You did not answer his question.

Flithy planes, bad food and wondering if you are gonna get your baggage is not keeping customers loyal.

 

[calibrator]

You did not answer his question.

[post="260131"][/post]​

Yes he did...read between the lines..."while we appreciate your business and I give you this lecture, we are clueless hoping the Gods send us a very large bag of money so we can keep on keeping on."


Love Hawkeye

 

[calibrator]

seeing US Airways in the air for many years to come.

[post="260140"][/post]​

[/quote]

The only thing that will be in the air are the executives paychecks.

U is a dead man walking. And so goes your "F" troop.

 

[Art at ISP]

Hawk,

Thank you for your reply. I have participated in the CAB before, and look forward to doing so again.

While I agree with your post, I fear that the differentiation you have achieved in this market is negative when compared to the other carriers. Your strongest asset is the front line employee, 99.9% of whom outshine the competition by miles. THEY are the reason we stay. With so many of these wonderful people taking the early outs offered to them, what are you doing to make sure that your core frequent fliers don't leave with them? As far as the rest of the product, unfortunately, it suffers by comparison to other carriers. I believe it can be improved by working smarter, not cheaper.

I would welcome the opportunity to discuss these issues in detail with you and your colleagues directly, either before, during or after the next CAB meeting. I agree completely with Bob that our goal is the survival and regrowth of this airline.

Thanks again for your response. I look forward to hearing from you soon.

Best regards,

Art at ISP

 

[Harry Callahan]

You did not answer his question.

Flithy planes, bad food and wondering if you are gonna get your baggage is not keeping customers loyal.

[post="260131"][/post]​

Sat. nights in CLT ?