Originally Posted by
dalston
Hmmmm. The CR-1 is a retrograde step (albeit a small one) towards further rewarding EQM rather than revenue. After a certain point, EQM and profit just don't correlate that well. More power to the serious mileage runners who may end up doing OK out of this, but doesn't the new company want to reward those spending $20-30k to achieve 100k EQM more than someone who might spend $7k to get 150k EQM?
And its not as if CR-1s are valuable enogh that they are going to be much of an incentive to reach the next EQM threshold...
Agree and disagree. Yield and RASM which are the 2 metrics used mostly are based on mileage, not on segments. DIrect flying for the same fare nets a higher yield than connecting flying for the same fare. While mileage and revenue have a very loose correlation (unless yield not a variable but a constant, in which case, there is a direct relationship,) segments to revenue is a far looser one. Point to point fares, segments is better than mileage as yield is usually higher this way, but connecting (or running) dilutes the $ per ASM.
Low fare segment running to achieve status is not that difficult, and other that filling unused seats (reducing spoilage at low, but still some income) at low profit fares, isn't really systemically profitable for a carrier. Direct, and high yield if possible traveling nets close to the same miles as segment running at a vastly reduced segment number, for the same $$...that behavior is in the interest of a carrier...to utilize the seats in a way that maximizes revenue. The empty seats now made of the NYC-IAD-CLE-ORD-XNA-IAH-TUS-DEN-SFO-LAX-SAN run will maybe be filled with a NYC-LAX-SAN run, the artificial demand for all the other legs will be gone, and the schedulers can reallocate those aircraft to routes where real demand exists. Remember 6 months ago when routing rules were made stricter? Same concept.