FlyerTalk Forums - View Single Post - Fuel costs may ground more flights, says AA CEO
Old Oct 7, 2005 | 9:21 pm
  #19  
studio76
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Originally Posted by FWAAA
Costs aren't the problem. Not anymore. Low revenue is the problem. Supply of seats goes down, fares go up.

For me, this sums it up. But not solely on the capacity problem. For me it's a product problem, the use of the word "seats". Honestly, legacy carriers offer little to no product premium (assigned seats, FF plans, and maybe a chance at an upgrade) and that's it. But the reality is that most of us pay for and end up in coach. coach products on SW, Jetblue, Song are equal to or better than the legacies. So let's see cheaper fare and the perception of a better product. Legacies are doing very little to encourage revenue

Yes I know that MRTC failed, but I think there is another aspect to the market that has not been fully explored that could potentially be revenue positive and really differentiate a legacy in the US. Create a premium economy area that is based on fare paid not elite status. UA E+ is a good idea, but part of the problem is that YB fares do not guarantee a seat there if already given away to elites. Premium econ cabins on BA, Eva, Virgin etc. are interesting (I'm trying WT+ for the first time later this month), but I do not think these seperate fare classes and cabins are quite what the us market needs. What I propose is and premium economy product that is only available (and guaranteed) for YBH class ticket purchases. It should have at least 37" pitch, more recline, legrest, powerport,and free alc. drinks. Do not bother with more seat width as that would be too much loss of capacity. I also think that upgrades should only be allowed from this class, even if you don't get it you won't be too pissed as you'll still have a good coach seat, and you can do away with the miles+ copay on international flights.

Why do I think this would work? On any given flight you have coach pax paying anything from $50 to $500 for the same product. $450 is a huge premium to pay for "convenience" to receive the same crap coach product. Everyone keeps saying passengers are only interested in the lowest fare, and while the legacies have diluted their product to the point where quite frankly that is all they are worth. Give me something other than miles worth paying for and I will. Business travellers with coach only policies still very often pay Y fares, but their only loyalty is milage plans. If anyone starting offering a premium economy product in the US based on corporate travel allowed fares such as YBH , except for schedule, why would anyone take standard coach at the same price?

You can still offer crappy coach for the bottom feeder, but do not force 85%of your customers to have that as their only option and charging them wildly differenate prices. It is time to create a product that is revenue positive and encourage people to pay higher fares.


I equate this to buying orange juice at the grocery store. You are given the choice of $3 for a gallon of store brand "from concentrate" or $5 for fresh squeezed "grovestand". The airlines want you to pay $5 for "from concentrate"
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