Originally Posted by
GrayAnderson
Let's consider the other side of this: UA has arguably weakened their brand to the point that they're getting 16-19% less for a similar flight. Even ascribing some of this to differences in route systems, it suggests that pax are not exclusively price conscious.
And I'm back to my point from elsewhere: UA is already pulling in less than DL on its seats. There are plenty of people who will take UA for a deep enough discount, but how much further down can UA let RASM fall? Somewhere not far below $0.11 they start running into trouble.
If Ua has to cut prasm by 1 c/mi (to 13.96 c/mi) it would cost them 6.7% of their $31.4B in passanger revenue or $2.1B. United only made $2.3B in 2016.
Put another way, price cuts of $10 for every 1000 miles united flies would wipe out their profit.