dhuey

From the start, a lot of smart outside observers could not understand how Independence Air would make this work. I think they were right. Unions have played a big role in modern airline troubles, but here I doubt they made much difference. This is (was?) an airline in search of a niche.

chicaloca453

This is exactly what I was about to write, but you beat me to it. There's a difference in fair market value and total ripoff. In Knoxville, what the airlines did after Air Tran left the market was a ripoff. They at times charged double what would be considered a fair market value just because they could. It was especially apparent when you compared prices from TYS and BNA to the same set of cities. With the Southwest Effect, BNA paid a lot less for the same destinations with roughly the same amount of miles on average.

I think of it like this. Airlines are willing to lose some money in markets with competition (like BNA) and they make up for it in cities where there is no competition. In TYS, we pay our share plus the lapse in prices over at BNA. That's just not right. You should not take advantage of the small uncompetitive markets just because you can. And that's what happens when LCC's are not in the market. DH made this an affordable (although never cheap) place to fly from. With them gone, we're stuck with high prices or a 3 hour drive to BNA.

UA and every other airline serving TYS will once again be able to take advantage of the small market traveler and make us pay our share plus. Doing this is where the line is crossed between fair market value and holding the traveler hostage.

ILv2Fly

Do you really think that FLYI going out of business will strenghten its position that much? You do realize that they have more than one base. FLYI going under I doubt will make that much of a difference. They filed before FLYI was on it's own. So were they a factor then. And as for being glad... HEARTLESS!!!!!!

xliioper

Can anybody else get to the Flyi website? Seems to have been
down for at least the last 6 hours. Does this mean they are officially dead?

mid

Came up just fine for me!

xliioper

Okay, seems to be a DNS issue. The name is not resolving from a number of nameservers I've checked, but the website is indeed up (I could only get to it by using their IP address -- 65.202.230.10)

DHAST

This discussiong regarding FlyI and fares sort of brings us full circle with respect to what a ticket should "really" cost.

The CASM for a given airline seat is probably $0.10 or so. So let's go to a system where all fares should be based on the actual cost to transport a pax. Sounds fair, right? If an airline can sustain a load factor of 80+%, it's doing really well (yeah, I know, you can fill 100% of your seats if you give them away, so what good is load factor). Let's also allow the airline a 5% profit on its seats.

The CASM is based on seats flown, not filled seats flown. So we have to adjust our fare charged to make up for the seats not filled. If we're flying 100 seats at an 80% LF, then we need to adjust our fares upward by 25% to cover the empty seats. We're also allowing the airline to make a 5% commission, so we need to adjust our fares upward by another 5%. The revenue from a sold seat must be 31.25% higher than the cost to actually produce this seat. That means on a transcon of 5000 miles rt, the fare should be $656.25 before taxes.

This is the basic part of it. If a model like this really worked, we'd have a model like this The truth is, the airline knows they can generate SOME revenue off the 20% of the seats not sold if they sell them cheap enough. How can they sell those seats and then protect the revenue of the seats that they otherwise would have sold? IOW, how can they fill the 20% seats that are empty with people who would not have flown, and make sure that the people who would pay the higher fare will still pay it?

Next, longer flights cost less than the CASM to operate, and short flights (under an hour) cost significantly more than the CASM to operate. This means that fares could be adjusted up or down based on the stage length. Some competitors may have a lower CASM than you have.

WRT to "gouging": On other boards here, the posters seem to take the general opinion that if the company is not making money, then the employees shouldn't complain about taking pay cuts and that they should be happy they still have a job. The flip side is that the general public doesn't have a consitutional right to cheap air transportation. If the airline can charge $900 and get away with it, they should. If they can sell you a fare at below CASM, then somebody has to pay a fare above CASM to make up for it. As an employee, we all felt that an airline's troubles would go away if passengers paid more for their tickets. That statement is very true. The flip side is that as a passenger, there is a limit to what I will pay for tickets. If they cost $300, I fly more, if they cost $900, I fly much, much less. If I paid $900 for a seat and felt I got $900 worth of value, that would be one thing, but for $900, I won't be sitting in a cramped coach seat with a bag of peanuts.

And that's where we're at with the airlines today. There really is a limit to what we'll pay for tix, and the airlines are trying to figure out what it is. They know that some peple will pay more for certain seats on certain routes than others, and are trying to maximize the revenue from that gap. Then, the airlines are trying to figure out if they can profitably operate within the revenue constraints the public has created.

mid

You just described virtually every other business that operates today.

Take restaurants for example: they have to staff up, purchase food, pay rent, and advertise. If tables go unfilled at dinner, that revenue will never be made up. If they purchase too much food and can't sell it, it will go bad. Add pilferage and breakage to the model, and you see how things can quickly go down the drain.

And yet nobody in the US frets about the sad state of the restaurant industry. Good food is practically everywhere, at good prices too. Restaurants have learned to be inventive and original to get new customers and keep old ones. Good service and reasonable prices makes for happy customers.

But there is the rub: for too long the major carriers decided that they could use the huge barriers to entry to lower quality and increase prices. Without alternatives, the flying public had to pay up or stay home. Those that needed to fly were pissed and rightly so. Without any ability to predict the pricing of tickets, passengers fumed when they found out that they were paying 400% differentials to seats booked right next to them. A lousy flying experience and poor service on the plane just compunded the anger.

SO when new carriers appeared, the major carriers had made their own bed. Customers jumped and many of them would never return.

I don't cry for the big airlines. I give my business to the carrier that treats me well and gets me to where I am going. I also have a long memory for screwups and poor service. FWIW, DH did a good job on both counts. I knew that the price I paid for those flights was a great one and that I wouldn't compromise service quality to get it. A flight on DH would have been worth more money if they had asked for it. Ask me how I feel about AA or NW and what I would be willing to pay for one of their flights.

We haven't seen the last of LCCs at IAD. B6 will come in and get the ball rolling. I've been on B6 to FLL and enjoyed enery minute of it.

IN fact, if you are getting better service from UA, AA, NW, or CO, you can probably thank the LCCs for lighting a fire under their management and flight crews. Nothing convinces you of the need to pedal harder than your competition in the rear-view mirror.

DHAST

Me too. Free upgrades on $250 tickets gets me on NW. It's funny what keeps me off of airplanes, and for the most part it's 50% EQM's and high fares and no free upgrades. I'm a fairly low maitnenance traveller and a vast majority of it comes from my NRSA days. You have to go out of your way to piss me off.

It's funny who we choose to fly and why we choose to fly them. I'm glad you had positive experiences with DH. When I worked for them as a UAX feeder carrier, several people around here were ready to have them crucified. They failed to understand that 1) They could refuse to fly on an ACA aircraft and ACA would still be in business, and 2) That most of ACA's "problems" were at UA's direction. So, despite what everybody wanted to hate ACA for, their beef was with UAL WHQ in Elk Grove, IL, not ACA in Dulles, VA. I also knew that if ACA could go it alone, they MUST do it with better service.

OTOH, in this day and age, I all but refuse to buy a ticket on UA. When I flew them as an NRSA, there was no way that I would EVER pay to receive that kind of treatment. NW gets me where I need to go at a price I can afford in F class for no extra charge on an aircraft that actually has an F class via hubs that can actually function in bad weather. No more ORD for me! Although, for my last 3 out of 4 flights on F over the holidays, I was SORELY disappointed on the lack of service. In coach, I don't care. In F, it's a different story. But right now, I continue to fly NW because NW provides me the best value for my money.

haddon90

years ago???? i've been away from knoxville for a year and a half. so if that counts as years, then i guess i don't know what i'm saying. flight to phoenix? $330. flight to san francisco? $370. I say that's pretty reasonable. flight home to washington, around $180. sometimes i had to pay $200. so i never experience the really high fares that apparently were "years ago."

flyi had a horrible business model. they threw away money just to stick it to UA. you can't charge $29 one way fares to boston. it doesn't even cost that less to drive there.

chicaloca453

Irregardless of how long it has been since you were a regular flyer out of Knoxville, one thing was always for certain. Better fares could be and would be found out of BNA. Why? One simple reason -- Southwest. Fly I made Knoxville's fares competitive with Nashville's.

When Fly I came into the market in Knoxville, the airport authority was so desperate to have a LCC that they guaranteed Indy x amount of seats sold per flight out of TYS to intice them. That is probably why they stayed in TYS. They knew they'd sell at least that many seats courtesy of the airport authority.

Why was the airport authority willing to do this? It's simple economics. If they didn't, they'd lose even more flyers to BNA, and TYS would end up a fully commuter airport just like CHA. And have you ever tried to find a low fare out of Chattanooga? It's very difficult, even 21 days out. They run shuttles to Nashville and Atlanta several times daily because flying out of there is so ridiculous.

Say what you will about DH's business model or poor decisions. That isn't what I'm talking about here. I'm talking about the fact that without the presence of a LCC in any market the fares can and will go up.

When DH first started up, IAD-PIT was heavily discussed on this board. Apparently, before DH, the price was around $700. After, the fare on all carriers serving that market was under $200. And what do you think it will be after DH exits stage left? I am willing to bet that it will be in the $700 ballpark again before summer.

That's the discussion some of us here are having. There's a fine line between reasonable and extortion, and the major airlines cross it far too frequently when they have no competition pulling in the reigns.

DC flyers are fairly lucky. They still have B6 and even WN at BWI. I believe Air Tran is also in the market, but I can't recall for certain. Imagine being a Knoxville or a Charleston, West Virginia with no LCC presence. We'll feel the pinch worse than those of you who are lucky enough to have other LCC's in the market.

Aside from that, I really feel for these employees. They, unlike the mechanics at NW, did not ask for this. They reported to work daily and did the best job they could. Their attitude was always positive and upbeat. It was a pleasure dealing with them. The same cannot always be said of the legacy carriers. DH is/was a breath of fresh air, and for that, they will be sorely missed.

cmbegb

Actually you are wrong, the non-union employees got written warnings last month, the union employees only got official word just now due to their contract guidelines.

Let me also add, that all of us (IDE employees) were aware of this on 7th Nov when the company filed ch.11, this should not be a surprise and is a formality in the event of no major investors. Let me also add at his point, and since 7th Nov, the company has not been able to do anything without approval of the bankruptcy judge and the guidelines set forth by that same judge.

Finally, no one, NO ONE, actually knows for 100% what is happening, all is confidential and is in judge's chambers until the final date which is supposed to be the 5th January when the judge reveals the bids and the winners of those bids. Even the creditors are not in the loop at this point until the judge reveals all on his day!

haddon90

you shouldn't be flying iad-pit. it's a 5 hour drive. and i've also flown out of chattanooga to DC for about $200. i understand about the southwest affect. but i don't believe that UA is going to jack up the fares. will they raise them? sure. you need to somehow make money on a route. not lose money like flyi. i've always flown out of knoxville and never spent more than $400 for a ticket.

StSebastian

AirTran serves all three airports in the DC Metro area with services to ATL and connections beyond there. They have a few other non-stops from IAD and DCA, but the main service is at BWI with non-stops to about 10 destinations.

Personally, I'd like to see DH stay around -- I always had good flights on them. From the employee's perspective I saw some issues on that side that weren't as great, but as a (revenue) passenger I don't ever remember having any problems and things went exactly as I'd expect with good service. Many of my coworkers flew them as well and were pleased both with the RJs and the transcon 319s. DH is one of only two airlines that I didn't mind walking up and paying full-fare if there was somewhere I needed to go. I remember one time I decided to ride up to DC with someone at the very last minute and then had them drop me off at IAD the next morning to buy a ticket to fly home. If the tickets had been several hundred dollars, then that wouldn't have been feasible, but the ~$100 ticket made it possible.

DHAST

He he, that's funny. On what basis do you make that statement? Look at two of the most saturated markets in the country -- WAS-NYC and SoCal-LAS. They are shorter drives/flights than DC-PIT, and the frequencies are through the roof. LAX-LAS alone is served 15 times daily by WN itself.