Originally Posted by
jsloan
It's a pretty big leap to go from an example or two to "United hasn't had talented PRM staff." There are several variables that RM has to take into account, and the total load factor is just one of them. UA certainly could have filled the plane if they had offered every seat for $1, and, in the short term, that can be a revenue-maximizing approach. However, not only is there an opportunity cost to selling a discount seat -- you reduce the inventory available for more expensive seats later, and you offer someone a lower price who may be willing to pay a higher one -- there's also a significant customer training disincentive.
Your argument makes absolutely no sense. Any competent analyst should be able to understand booking curves for his/her assigned markets. FLL EWR consistently gets low F and Y fares because UA know this market won't sustain high fares. Therefore, you can't be raising rates when you have a massive amount of inventory to sell and very few days left (unless it was for example JFK LHR which easily sustains low density 4-class 744s a-la-BA with 75% of the pax paying high fares). Even if the analyst in this case was used to managing a 738 over a smaller A319, he(s) should have carefully looked at the previous year's history and realized that he(s) still needed a lot of the lower booking class buckets to fill the plane... in the end it was pitiful to not sell a single F seat on the flight and Y left with most of E+ and even some E- rows entirely empty. Further, an analyst or team of analysts for a given market should know that the 6/7 am flight on a Sunday is not going to have the same demand as flights later in the day.
Meanwhile, on the same weekend, DL was selling dirt cheap F fares on the same market and their flights went out full. At least DL's analysts understand which markets they have to discount more to fill the plane and ultimately, they remain more profitable than UA.
If, on the other hand, UA could get lots of high fares, then it would make sense to not give away the seats (lower load factors with higher yields), but this isn't the case and UA has desperately been trying to increase its ancillary revenue in order to compensate for its net revenue deficits.
Note that my comments aren't based on a couple isolated cases, as even former CEO Smisek admitted that his airline had incorrectly forecasted passenger demand--really, how does that happen? An entire team of analysts good for nothing? Those forecasts aren't done by 1-2 people!
BTW, I have also been at conferences with UA's PRM staff. If they were given a standard IQ test, I doubt many would score over 90--well below the average person. United has the most enviable network of any airline in the world so no, I will not cut them any slack for their perennial failure which can easily be fixed--hire people who are competent, dedicated, and above all, understand that passengers are rational beings looking to maximize their purchasing power--they will not pay you a premium over AA, DL, even VX (which now flies FLL JFK) for a crappy product of a hated airline with a rapidly decaying brand image.