Originally Posted by
TWA Fan 1
I do fault Kellner for being too focused on the cost side of the ledger and by not taking advantage of revenue side opportunities... there are many opportunities that involve providing the customer with greater value...To date I have not seen Larry Kellner come up with anything but the most pedestrian value opportunity idea.
Again I can see where you're coming from but I disagree on the interpretation.
Does not CO pioneering the operation of 752s across the Atlantic to secondary European markets present value to the leisure and business customer? Does not this preserve the cost structure and at the same time allow for more revenue?
Does not the ability to offer competitive fares (be it discount Y or R (can't recall if was CO the first airline to offer Z/R fares)) offer value to the customer?
Does not having the largest amount of 787's from any American carrier suggest CO is looking to expand to even farer flung destinations and slash their costs while doing so?
The complaint I hear (and please correct me if I'm mistaken) is that CO has not been bold enough in trying new ideas. Specifically this means that CO has not reconfigured their 752's to be lighter in order to serve more Eastern European destinations.
Originally Posted by
TWA Fan 1
As far as the 752, I was actually not discussing PE, although I think PE, correctly positioned and priced, could be a real winner. I was only comparing CO's 752 to NW's 752.
My mistake --
Originally Posted by
TWA Fan 1
The fact is that refueling only occurs in the winter, but it is also true that there a number of thin Central European destination that are beyond the range of the CO 752 ex EWR that would be within the range if the ship flew lighter.
But at the same time the fact remains there are already many destinations in range of the current, and universally, configured 752.
Why should CO risk the opportunity cost to try and enter new markets at the cost of a subfleet or fleet wide seat reduction?
...don't get me wrong - I think this has the potential to be a strong argument...maybe if CO had a glut of 752s floating around then I could see this happening (as they'd have the equipment to carve out a subfleet) but as their current 752s are almost maxed out I don't think this is feasible.
Originally Posted by
TWA Fan 1
CO would make a lot more money on EWR-PRG or EWR-WAW with its 752's than on EWR-MCO. But it can't because it has 15 extra seats which earn a much lower yield and aren't sold all the time anyway.
?
Would EWR-PRG perform better than EWR-MCO? I'd have to yes.
But that's not the question at stake here and pairing up those two routes is like comparing apples to oranges. The issue is would CO removing ~15 Y seats allow for better holistic performance.
I seriously doubt CO would sacrifice potential European ops with the 752 for added domestic turns (especially to a low yielding market like FL) but I do think CO looks to the 752’s FL turns as a piece of the scheduling puzzle, not the largest piece, but a piece nonetheless.
It seems to me the real question is would EWR-PRG or EWR-WAW coupled with various domestic turns, with a penalty of 15 seats, perform better than EWR-ARN or EWR-OSL coupled with various domestic turns without the 15 seat penalty.
As it seems that regardless as to where the 752 will fly in Europe a domestic turn will be scheduled in I'm not sure I see how this argument applies beyond the fact there will be 15 fewer seats to sell...especially when the existing European markets are doing well.
While the demand may be there I do not think it is a strong as you believe it to be. CO could go through and block 15+ seats (without taking any out) today, maintain the universal 752 fleet and fly the eastern routes today...but they don't. This suggests to me the western European markets performance is better aligned with the constraints on the 752 (from distance to domestic turns.)
I by no means am saying Eastern European routes are not lucrative – rather that choosing to fulfill them with a 752 is not in the optimal way to maximize the revenue potential of the plane.
Originally Posted by
TWA Fan 1
So the fact is, it's not all about the cost side of the ledger.
I'll give you that it's not
all about the cost side of the ledger but it's pretty damn close.
This is the largest arena in how the airlines compete with each other...Lord knows they can't raise ticket prices! If one company commands a substantial savings on the cost side than they can either undercut their competitors for market share, enjoy higher yields, or both.
Originally Posted by
TWA Fan 1
But as CO becomes a heck of a lot more complicated and sophisticated company with its international expansion, a lot of the company's institutional dictates are simply no longer necessarily in the company's best interest.
And that's exactly why they should strive to keep things as simple and consistent as possible...lest they run the risk of degenerating into something resembling UA.
Originally Posted by
TWA Fan 1
...pax are flying in BF seats EWR-MCO on cheap upgrades. Doesn't that seem a little odd to you?
When said like that, yes, but you're leaving off some of the picture.
For example, if Atlantic ASMs are the most lucrative and CO has a fleet which is able to make a turn across the Atlantic in a 24 hour period and still have few hours on the ground what would you have them do with the equipment? Have it stay grounded?
The fact the 752's fly to FL is bigger than offering a J seat in the market, it has to do with the scheduling of the equipment in a way that maximizes its revenue earning potential.
So does flying BF seats to MCO/TPA/etc that go for $339 o/w make sense?
Yes, when it allows those same seats to be turned around sent across the Atlantic and the only other options are having the plane stay grounded in EWR or do more complex domestic turns at the price of additional EWR--->Europe service.