US Airways Dividend Miles (Pre-FlightFund Merger) - US to go low fare?

Interesting article in today's Washington Post:

http://www.washingtonpost.com/wp-dyn/articles/A46757-2004Feb16.html

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Many in the airline industry speculate that the next to make such a transformation (going low fare) will be US Airways.

Of all traditional airlines, Arlington-based US Airways has the most to gain. With its concentration of flights along the East Coast, its international routes and first-class cabins, US Airways could draw a large pool of frequent business travelers away from low-cost rivals with a competitive fare system, especially since neither America West nor Alaska has many flights this far east.
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Let us pray.

I think we all agree that we'd like US to have a lower and simpler fare structure, even if it meant slightly higher liesure fares for significantly lower business and premium fares. But, wouldn't US also need to significantly lower its costs to be competitive with other such "low-fare" airlines?

Heres the article from the USA Today:
US Airways may be contemplating remaking itself into a low-fare airline, Keith L. Alexander reports in his Washington Post (free registration) Business Class column. A similar move last year helped reverse the fortunes of then-struggling America West, and Alaska Airlines announced last week that it would undertake a similar initiative of its own. US Airways spokesman David Castelveter declined to comment directly, but said: "It is clear that the industry continues to move towards simpler and lower fares and this move by Alaska is yet another example." The theory is that US Air — with its strong East Coast position, international network and first-class cabins — could lure a large number of frequent business travelers away from low-cost rivals. Aviation consultant Michael Boyd insists US Air "is a lot closer to making this move than other airlines," despite the risk that competitors could undercut its prices. America West also faced price retaliation from rivals after its low-fare switch. But the move has paid off for America West, proving popular with customers with simpler fare structure and the elimination of the carrier's most outrageously priced last-minute fares.

USAirways really has no choice. This must happen or the company will cease to exist.

USAirways doesn't have to match the LCC's dollar for dollar (they can't anyway). If I could fly, on a short notice to CLT or RDU for say $400RT......that's quite reasonable. Sure, the leisure traveler wants to pay $180RT....but I contend that US has, and is, losing their bread and butter...the business traveler.

Right now I'd be compelled to pay about $1000 for a last minute CLT or RDU trip. Basically I just wouldn't make the trip.

The fare structure now offers cheapo fares to compete with the LCC's. This is predicated on enough business travelers who pay 5X times as much.....offsetting the difference. Without a proliferation of LCC's this worked. But it's a model that's out of date with the current market condition of the industry.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by TravelScholar:
I think we all agree that we'd like US to have a lower and simpler fare structure, even if it meant slightly higher liesure fares for significantly lower business and premium fares. But, wouldn't US also need to significantly lower its costs to be competitive with other such "low-fare" airlines?</font>

Based upon everything I've read on this board as well as in the print media, I would venture to guess the answer is "yes." However, running a profitable airline is not just about cutting costs. It's also about attracting business. Business travelers have been flocking to the LCC's in droves for all of the reasons stated in numerous threads. And apparently AS and America West came to the realization that they could actually sell more tickets by narrowing the spread between $199 advance purchase leisure fares & $2,000 walk-up fares. It doesn't take a Harvard MBA to figure it out. I just hope US can come to its senses before it's too late.

So many of us have been ranting about this for so long. It is about a value proposition for the customer. I, and many others would pay more to fly US rather than Southwest if they have a program similar to what they have now. But not 8 or 10 times as much. I stay in pretty nice botels, they cost maybe 100%-200% more than cheap hotels. Not 1000% more. They need to define a value compared to the LCCs, they cant do it on price alone. Maybe they have figured this out.