<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by avek00:
Venk:
There is indeed a ticket mix for many pax, but again, most will TREND towards flying mostly on higher-yield or lower-yield tickets.
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Wrong. This is exactly the behavior that has changed in the last year. When I was flying CO in 2000 and 2001, in the company I was working for, I had no incentive to buy fares in advance by careful planning, and would pay pretty high fares to CO most of the time. People use to buy BF fares for every trip that qualified for BC seat (over a certain number of hours). Now the situation in most companies are entirely different. It is encouraged to try hard to get lower fares as much as possible especially when you have a fixed budget. But that is not always possible because of client requests, rescheduling, etc., so still need to do last minute travel or need to do last minute scheduling. The fares can be quite high in such situations. In addition, BF is completely discouraged or only used for trips that are even longer.
Meeting people almost every week in various parts of the world tells me that this is fairly common. Except for those situations where the job is such that you always have to buy last minute fares, most travelers now have a mix of low fares for planned ahead trips and high fares for last minute trips. Guess who gets my high revenue fares.
If CO's mindset is anything like yours, it has completely missed the boat on this one.
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While CO might benefit from a lower cost structure, there is little question that CO's revenue management policies are a key reason why the company is not burning $5-10 million dollars a day like other airlines.
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Wrong. CO is already at a stage that it cannot lower costs anymore but its hisorical lower cost structure has kept its deficit relatively under control. If they don't increase market share or revenue per customer, they will have no growth. The former is difficult to do under its "revenue management" policies and there is a hard limit to the latter. Ironically, the only way for CO to survive may be for another airline to go down. Despite, your doomsday predictions, I actually see better chances for other airlines to do well because there is so much that can be done in the cost structure.