Originally Posted by
The Lev
Fares as listed above are far from "give away" pricing! I suspect that yes they can make money by earning anything much over $1,000 per segment.
Well, the plan is to charge pretty expensive fares on those routes.
That will require cooperation of other airlines flying the same routes. I am not convinced they will be as inviting as the proponents of this airline are thinking!
I looked at Halifax - Charlottetown and fares are $199 one way in mid January which is a slow time of the year. I think that when the new guys enter with $139 fares, the existing guys will have no choice but to match the fare. Then the new guys drop to $129, it is matched, then $109, then $89 than $69 and on. It might make money with 7 people paying $139 each but I doubt it'll make money with 7 people paying $69 each!
They are the new guys on the block with the same or lower number of flights on the same exact routes, the same airplane type, the same inflight service, the same seats on board with no points program to get people to Florida in the winter and across Canada and to Europe in the summer. The only way to get people to switch is by lowering the price a lot and consistently being lower than there competition.
I sure hope that they have expenses that are way, way lower than the competition so they can sell fares at half the going rate and still make money, or have lots and lots of money in the bank and investors who can afford to lose it!
