Originally Posted by
Seat2C
Do you also oppose the subsidies that VX receives from airport authorities that the legacies never get? Or the JetBlue sweetheart deal with the NY Port Authority when they started?
I couldn't disagree more. Load factors are at all time highs across the industry. The public has and will continue to accept higher prices.
In this case, I don't oppose subsidies from VX just because of the simple fact that the legacies have gotten far, far more. As for B6, they have gotten some "sweet deals," but also other terrible ones, e.g., being forced to fly A320s when it first started between JFK and SYR.
Load factors are high because a. there are less airlines around (e.g., after acquiring NW, DL dumped most of the NW DC-9s for instance) and b. these airlines have been progressively reducing capacity on domestic markets. Further, again, high load factors have no correlation to high fares. Last summer, DL and B6 matched NK's fares on many markets they shared. NK in most cases gets pretty high load factors yet its average fares are quite low, of course that's intentional since they are gonna get you with all the ancillary fees, but the point is that you can't just assume that high load factors are an indication that high fares have been achieved. I do think, however, that the public will have no choice but to eventually accept higher prices because by next year, there will only be three true legacy airlines and the power of the suppliers will be much greater, and this should help VX and other smaller airlines to achieve higher fares as well.