Originally Posted by
zkzkz
True.... but shareholders also care about *future* profitability. And to make predictions like that it's often useful to look at how competently a company is being run in other ways that might not be affecting the bottom line today because it shows how well they'll be able to handle operations in the future.
So sure if on-time performance has *no* affect on profitability at all then nobody's going to care but that's patently untrue. Delays are expensive when customers need to be reaccomodated, employees get paid overtime, and customers leave for other competitors. It may be true that *today* the cost is outweighed by other income but a company that is able to operate more smoothly today is one that will be more profitable in the long run when the weather isn't so positive.
@
zkzkz
Completely agree, and I learned long ago that long term "profitability' runs straight through "
promises made, promises delivered".
Inability to consistently deliver on core promises to customers, staff etc, is the very definition of an organization that is poorly managed - to say otherwise only holds true if a business is protected from reality that mgmt / existing shareholders can't be replaced. I don't know that much about investment rules for airlines, but I understand foreign takeover not possible ?
And when I compare to FR, it is because FR is absolutely clear about its promises and have great reputation for delivery, and that is to expect OTP, low prices, safety, etc, but don't expect high levels of ground/on-board service. On a short-flight I can live with that because OTP matters a lot to me and this
directly affects where I spend my money, ergo directly leads to FR PROFITABILITY.
and when folks here discount FR, well, an AC Basic fare (that I have never used so I stand to be corrected) looks exactly like the deeply discounted FR Value fare that are both bare-bones (which I don't use either, as can afford Flex Plus that gives me about the same as AC flex, including exit row seating)
In short, OTP may not matter to some, but for this traveller, my spend is affected by this performance or lack therof, so AC profitability is less than what it could be otherwise.