America West FlightFund (Discontinued Program) - First Class For Less

America West Announces Its New First Rate Fare Program: 'Go First' - Makes Flying First Class Affordable


Airline Reduces First Class Fares by up to 70 Percent

PHOENIX, Feb. 17 /PRNewswire-FirstCall/ -- America West Airlines (NYSE: AWA) announced today that it is making another revolutionary change in its pricing structure. Today, the airline is unveiling a first class fare structure featuring new nonrefundable first class fares that are up to 70 percent lower than the industry's traditional first class fares. With today's announcement, America West now offers two new nonrefundable first class fares, one with a 7-day advance purchase requirement and one with a 0-day advance purchase requirement.

"Two years after we revolutionized the industry by making coach fares significantly more business-friendly, we're doing the same for first class fares," said Scott Kirby, executive vice president, sales and marketing. "This is great news for business and leisure travelers who have told us they're looking for an airline that can make flying first class affordable. Most major carriers have a difficult time offering affordable first class because their cost structures won't allow them to do so profitably and most other low-fare carriers can't offer it because they simply don't have first class cabins."

America West's first class cabins feature leather seats that are 50 percent larger than coach with adjustable headrests and greater reclining distance. In addition to premium seating, the airline's first class service also offers complimentary food service on many flights, complimentary beverages including beer, wine and cocktails, complimentary entertainment, priority check-in, first class security lines (where available) and early boarding privileges.

Customers who purchase the new first class fares will also enjoy day-of- departure access to the America West Club and a 50 percent elite-qualifying FlightFund mileage bonus. FlightFund miles can be used for award travel to more than 300 destinations on five continents.

Kirby continued, "Our employees know the benefits of our first class cabins better than anyone, so we've teamed up with them to get the word out. Similar to our Go First upgrade program, which pays $5 every time an employee sells a day of departure upgrade, every time an employee sells a Go First fare, they'll also earn a $5 incentive."

America West is also offering travel agents an introductory five-percent uncapped commission for selling these new Go First fares. The commission is available on all tickets issued through April 30, 2004.

"Our travel agents know our mutual customers very well and can help identify and sell to those travelers who would prefer to fly first class and take advantage of these new low fares. The commission is meant to reward agents for helping us introduce this amazingly affordable product to our customers," added Kirby.

The chart below compares America West's new first class fares to first class fares offered by other airlines.


Other AWA AWA
Airlines** 0-Day* 7-Day*
First Class Adv. Percent Adv. Percent
Markets Fares Purchase Savings Purchase Savings

Las Vegas -
San Diego $428 $199 54% $149 65%
Las Vegas -
Columbus, Ohio $881 $449 49% $349 60%
Dallas/
Ft. Worth -
San Francisco $1,142 $449 61% $349 69%
Albuquerque,
N.M. -
Los Angeles $950 $299 69% $199 79%
Houston -
Seattle $1,141 $449 61% $349 69%
Minneapolis -
Orange County,
Calif. $1,421 $449 68% $349 75%
Washington/
Dulles -
Orange County,
Calif. $1,870 $649 65% $499 73%
Atlanta -
Portland, Ore. $1,245 $649 48% $499 60%
Miami -
Las Vegas $1,068 $699 35% $499 53%
Boston -
San Diego $1,760 $599 66% $449 74%
Philadelphia -
San Jose,
Calif. $1,785 $649 64% $499 72%
Newark, N.J. -
Ontario, Calif. $1,268 $649 49% $499 61%
Los Angeles -
Toronto, Canada $1,206 $649 46% $449 63%
Denver -
Orange County,
Calif. $907 $449 50% $349 62%
Denver -
Las Vegas $831 $399 52% $299 64%
Los Angeles -
Cancun, Mexico $899 $499 44% $399 56%
Seattle -
Los Cabos,
Mexico $692 $499 28% $399 42%
Denver -
Puerto Vallarta,
Mexico $826 $499 40% $399 52%


*Fares are one-way and nonrefundable and do not include Passenger Facility Charges of up to $18 per itinerary, the federal excise tax of $3.10 per segment or the September 11th Security fee of up to $10 per itinerary. A segment is defined as a takeoff and a landing. Fares to Canada do not include a navigational surcharge of $7.50 CAD. Canadian fares do not include a 7.5 percent U.S. federal transportation tax, a $7.00 immigration fee or a $10 CAD airport improvement fee for departures from Vancouver. Fares for Mexico do not include federal international air transportation taxes of $13.70 each way, foreign departure taxes, customs and immigration fees, airport improvement fees, health inspection fees and tourism fees of up to $80. A $100 change fee applies. Some flights may be provided by America West Express, which is operated by subsidiary airlines of Mesa Air Group. Fares are limited to first class capacity. Tickets are nontransferable. Fares and rules are subject to change without notice. Other restrictions may apply.

**Fares are one-way and refundable

Here is the actual link.

http://ir.thomsonfn.com/InvestorRelations/PubNewsStory.aspx?partner=10533&product=IR&storyid=107396

Surprised there's not more discussion of this. What do AWA elites think?

I found it interesting that HP was comparing their non-refundable fares to the others refundable fares. How about apples to apples?

Do other airline normally offer non refundable F fares? I mostly see refundable ones.

I am HP Platinum and fly weekly, although usually on the short haul routes. HP has had 1st class "sales" in the past. These new non-refundable first class fares are similar to the sale fares. No way am I going to pay $400 to fly RT 1st between PHX and LAS. I will take my chances with auto upgrades. I have been very lucky and have generally been upgraded on my flights, although, of late, I have not made the cut on a couple of flights.

I know that HP has been very pleased with the at the gate upgrade for a fee program. They have made a ton of money from this.

I understand why they're doing it and am not at all surprised -- in fact, I've been expecting it.

They've tested this approach a few times, no doubt to determine whether there was a threshold somewhere between the high cost of First and the "low" cost of coach that some customers will actually pay for in order to fly First. I'm sure there are more than a few people who were willing to do so, especially the relatively last minute flyers (< 7 days out) who would be looking at paying full Y on another carrier and riding in coach compared to a cheaper ticket on HP that gets them right into First.

As it stands now, virtually all first class seats are filled via either Elite upgrades or mileage redemption. A very small fraction of people pay to fly First on HP.

As we know, at HP it's all about revenue maximization these days, so this is a very consistent, predictable (and perhaps even logical) course of action.

As a selfish elite member, though, it will definitely reduce the number of first class seats available to us for upgrade, so it is one more in a frustrating series of erosions to our benefits. http://www.flyertalk.com/forum/mad.gif

In HP's evaluation of the various options, no doubt one of them was to eliminate first class completely, since it is not responsible for much direct revenue and reduces overall capacity (without regard for the significant intangible value to elite members, many of whom would head for the exits). This is definitely better for us than that option.

Looks like my problem from last week is connected to these new fares.

http://www.flyertalk.com/forum/Forum12/HTML/001211.html

I believe AZ Travels has said it well. This was expected for a while now. Most will prefer to have a F cabin over not having one at all, i.e Jet Blue, TED, SONG, SWA, etc.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by zrs70:
Looks like my problem from last week is connected to these new fares.</font>

I suspect this will cause a great deal of confusion for folks. I'm certainly not used to dealing with restricted First class tickets. I don't know if it is now common with other airlines or not; it didn't used to be.

Part Two

http://ir.thomsonfn.com/InvestorRelations/PubNewsStory.aspx?partner=10533&product=IR&storyid=107546

I've taken advantage of those F fare sales in the past on the Phoenix to Toronto. On one flight the guy next to me had paid for it as well; so there are two Elites we knocked.

My company travel policy can absorb these fares and our travel is never usually changed. I'm shocked that they didn't attach a rule to the new fare that I can't earn 150% as an Elite. Looks like I'll be banking the miles now!

I suspect we will see a reduction in available seats to Elite which makes Silver Status even less appealing.

Once First is gone as a major pull, what's left for HP to offer elites?

I'm looking at the fares right now between LAX and BOS for Mar5-8 and the price of $998 doesn't seem much better than the A fares that I can find on AA, UA, or DL.

From a value perspective, the price isn't low enough. Why fly an A319/320 with 34" pitch when you can fly a 763 with 62" pitch for the same price.

From a MR standpoint, that $1000 can buy four LAX-BOS-LAX MR's and get 2.5x the mileage.

While I was hoping for a better J pricing model, I'm left kind of dissappointed. I was hoping the fares would be in the $600-700 range. It seems that HP only brought the price of J down to the industry average from the previous hyper-inflated costs.

Does this mean that there will never be a sale on F seats again?

------------------
"Rows 50 and above are business seats for those with infants" - gfowler-ord-1k
SkyTeam - "The whatever's leftover Alliance"

Some interesting stats from an article in today's Arizona Republic. (The article itself is short & essentially the same info that's already been reported here, so I won't bother finding & pasting it.)

Percentage of HP's first class seats that are purchased: 6%

Percentage occupied by upgrades: 60%

Percentage that go empty: ~33%

Frankly, I'm surprised the purchased number is as high as 6%.

A third going empty -- hmmm. Not on many of my flights.

NOT on my flights either!!! F is always full, and as a silver, I am only able to upgrade ~50% of the time.

Other carriers, especially US Airways, have had wildly successful promotions like this. US has offered REASONABLE F class fares, and they really have been able to sell some seats. $400 from major connecting cities like DCA, PHL, and CLT to Nassau, $500 from the hubs to LAS, and $600 to Cancun. They really have been making profits from the new fares, because they are simply REASONABLE- not an overpriced piece of paper that gets you a service that is hardly worth the FREE upgrade (sometimes the filthiness of the cabin makes it unbearable), but I have digressed . . . I believe that HP is following the lead set by US with hopes of turning out a profit in the F cabin, rather than just getting rid of it altogether.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by iahphx:
What do AWA elites think?</font>

We think . . . we can kiss our upgrades goodbye. But them's the breaks: airlines have to make money.

Since it's a rational move, I'm for it.

And the airlines can kiss their loyal elite customers goodbye.

What everyone said is true. The airlines need to make money, and America West DOES have a valuable product that they could potentially earn money on if they promote it in this way.

On the flip side, I am facing never getting an upgrade on the big runs ever again, and HP faces a loss in elite travellers.