Uhh, sure. Some people said that in 1980. They were wrong. Check oil prices from 1986 if you disagree. Some said it again in late 1990 when Hussein invaded Kuwait. Once again, they were incorrect. See oil prices from 1997-99.
You may be right. Oil prices might never again collapse. Just like California real estate, up might be the only direction they ever take.
To the greatest extent in the history of oil futures trading, oil prices are now in what is called continuous "contango" -- that is, oil futures get progressively more expensive each year into the future.
Huh? First of all, the O/H bins are already overflowing on most flights. Second, how can this cut into "your" legroom? Do you think that you will suddenly be required to let your neighbor's bag be stowed under your feet?
Ok... a walk through the obvious:
If XX% of luggage is being added to the main cabin, as opposed to flying in the hold, then you tell me if it is easier or harder to stow one's bag up there. So my bag either gets gate-side checked (a PITA) or goes under my feet.
That is true, but aggregate labor costs at legacies are still higher given that the labor force skews more senior due to the longer history of the airline.
I don't think the issue here with Southwest having a workforce of generally less senior workforce is related as much to a shorter history. Let's not forget that WN has now been around for 35 years or so.
The key difference is that WN has continued to grow over the last 10 years, while AA and other legacies of remained roughly the same size or shrank. This has led to situation where they have done little hiring and relied primarily on there existing workforce. WN has been continually hiring to meet this growth so they have less senior (on average) employees.
Another key difference is that WN offerend a targeted buy out offer to more senior employees a year or so ago that unions would have never allowed at AA.
Also, an important point with labor costs is the WN's employees are generally much more productive. meaning they accomplish the same job with fewer employees. Though WN is now one of the most highly unionized airlines, they have far fewer work rules that inhibit productivity.
AA (and others) have improved in this area, but are still considerably behind WN. WN has maintained a team approach where crews work together to do everything they can to get a flight out on time. Captains and flight attendants help with aircraft cleaning when required, etc. They don't get boxed into this is my job and I don't do anything not specified in my job description.
You can profitably afford to pay your employees more (to a limit), if they are more productive than the competition.
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One question, and it's purely out of curiosity, would mileage tickets for family members of elites incur the baggage charge while the elite member fees are waived?
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Quote:
Originally Posted by SJCFlyerLG
I was specifically referring to the bag check fee, which has dominated this thread. My supposition is that this is the way they will increase leisure fares without publishing a real increase. And lest we think that the increase in carry-ons will double overnight, remember that the TSA liquid lunacy will force most vacationers to check bags. There will be some increase, but I don't think it is armageddon like some do.
For the record, I oppose nuisance fees, and I would prefer to see ticket prices and routes adjusted to where the carrier can make money (while still providing me with miles and upgrades!).
I get it and my comment was not a criticism of your observation, but rather an addition. In general I see the airlines point with regard to a checked luggage fee. More weight= more fuel and if you use a service you ought to pay for it. I do think that AA is a bit absurd in not including one checked bag in ticket price. Most likely this fee is a way of recouping costs for tickets that have already been purchased.
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Quote:
Originally Posted by USA_flyer
One question, and it's purely out of curiosity, would mileage tickets for family members of elites incur the baggage charge while the elite member fees are waived?
It looks like as long as the family members were traveling on the same PNR as the elite member, they would not incur the baggage charge.
However, any family members or friends or others NOT traveling on the same PNR would incur the charge.
It's a good reason to want to get to 1MM as quickly as possible and not have to worry about it ever.
Portions of the post that previously appeared in this space have been deleted. I would provide you with a reason why, but doing so would likely be against the TOS.
Last edited by uncertaintraveler; Dec 18, 08 at 2:40 pm.
Another key difference is that WN offerend a targeted buy out offer to more senior employees a year or so ago that unions would have never allowed at AA.
Also, an important point with labor costs is the WN's employees are generally much more productive. meaning they accomplish the same job with fewer employees. Though WN is now one of the most highly unionized airlines, they have far fewer work rules that inhibit productivity.
AA (and others) have improved in this area, but are still considerably behind WN. WN has maintained a team approach where crews work together to do everything they can to get a flight out on time. Captains and flight attendants help with aircraft cleaning when required, etc. They don't get boxed into this is my job and I don't do anything not specified in my job description.
You can profitably afford to pay your employees more (to a limit), if they are more productive than the competition.
AA need not make that same mistake again with MTRC. The problem with that is that you couldn't differentiate the product and give elites a little boost. UA's E+ is a success story precisely because it wasn't "throughout coach."
Elites get it as part of their benefits. CHECK.
Other customers can buy it at various points if for an affordable fee. CHECK.
This isn't entirely accurate. On UA's full planes (still a common event even with this so-called recession), I have plenty of "Seating Area 4" passengers next to me because they sold out all their E- seats and had to give it away, trying to force in their way-too-large bags into the overhead bin.
To your point though, a more-limited MRTC program (perhaps called Economy ExtrAA) would do the same thing that E+ does and also reduce capacity on AA's flights, in turn the ability to raise fares.
By the way, does anyone know the breakdown between MD80s and A300s being taken out of service.
I don't remember off the top of my head but I believe it's only a handful of 300s leaving - the ones with their leases expiring. The 10K should tell you specifically how many leases on 300s are lapsing this year but the bulk of that number are Mad Dogs.
I find it interesting to read these threads as someone living north of the border. A couple of thoughts I'll add to the discussion.
First, to Canadians, air fare in the US are ridiculously cheap. With oil at $130 a barrel, something has to give. Fares have to rise, services have to be cut and non-profitable routes dropped. It's a matter of survival and those who adapt the quickest win.
I think here in Canada, the two primary air carriers have known this for quite some time and have adapted their business strategy accordingly. Even Air Canada has adopted many Southwest-like strategies such as only awarding frequent flier points on higher fares, requiring payment for advanced seat selection on lower fares, etc. Both airlines increased fuel surcharges last week (up to $90 RT depending on the duration of the flight). Nobody likes it but it's the reality of the environment and both carriers are in much better shape financially than most US legacy carriers.
Secondly, high oil prices are here to stay. Although US demand is down, that is being offset by increasing demand in emerging economies like China and India. With a burgeoning middle class and strong economies, there are tens, if not hundreds of millions of consumers looking at purchasing vehicles. Unless the price of oil pushes these consumers out of the market, expect for demand to increase and prices to rise accordingly.
In general, Canadian's don't have much sympathy for the moaning and groaning we hear Stateside. Although we have been somewhat insulated from the dramtic increase in oil (because of the strength of the $CAD), we still pay $5.32/gallon here in Montreal.
The US consumes 25% of the world's demand for oil while containing only 5% of the world's population. So, do your part by getting out of your SUVs and V8s and start using more fuel efficient vehicles. Or better yet, use mass transit. Or the best of all, walk!!!
Lest you think I'm full of hot air, I've ditched a 40 minute ride in a fuel efficient 4 cylinder (a conscious decision) in favour of 2 hours walking/mass transit. I don't like the cramped buses/subways better than anyone else, but at the end of the day, everyone benefits. And I notice my spare tire seems to have receeded somewhat!!!
Bravo to AAs management These steps were needed NOW they have taken bold steps quickly. Meanwhile UAs team sits on their thumbs
Quote:
Originally Posted by UnitedSkies
UA management had already announced a 9 percent reduction in domestic capacity for the fall. And UA was the one that started the $25 second bag fee, so not sure how UA's team is sitting on their thumbs.
Quote:
Originally Posted by MIKESILV
And the subtle and sometimes silly UA cheerleading continues
What a hilarious (and telling) exchange.
"AA rocks since it screwed people first while UA didn't do anything."
"No, UA screwed people first! My $150 change fee & second bag fee came before your $15 bag fee!"
"You UA cheerleader!"
I don't remember off the top of my head but I believe it's only a handful of 300s leaving - the ones with their leases expiring. The 10K should tell you specifically how many leases on 300s are lapsing this year but the bulk of that number are Mad Dogs.
Only three leased AB6s were earlier scheduled to be grounded as the leases expire this year, but it's unknown (unless you know) how many of the owned AB6s might be grounded in the fourth quarter.
Reading through these many posts, I get the sense that many seem to be missing the boarder point here.
We can all moan and complain about the additional fees and hassle. However, these broad changes of huge capacity reductions and every attempt to collect revenue reflect how desperate the entire industry is for its very survival.
If oil remains at this price or goes even higher, 15% to 30% of capacity will have to come out of the market and prices will be significantly higher. This means it will be much harder for those of who travel frequently on business to find options and schedules that are workable. Businesses will also be encouraged to use alternatives to travel.
On the leisure side, many folks will be taking fewer trips. Air travel will cease for many to be a viable option on many trips.
These fuel prices will bring fundamental shifts in the frequency and way we travel. Unlike 9/11 or the typical downturn, these shifts are likely structural and not cyclical. Oil will peak at some point, but most experts do not expect we will ever again be below $100 or so barrel oil. The current model just doesn’t work at these levels.
In my view, this reality is far more important on how much folks pay for bags, change fees etc. We live in a new world.
