Well written, Randy.

Southwest, JetBlue, and AirTran "work" because they have carefully chosen their route structures to cater to the leisure traveller. A route structure, in some cases, a fifth that of what airlines like UA and AA fly domestically.

The Big Six fly to hundreds of domestic destinations that WN/B6 will never touch because the only people who fly to and from there are business travellers or leisure travellers who wish to travel internationally - destinations I expect WN/B6 will never serve (well, B6 with some A330s could use JFK as a springboard to Gatwick and make a deal with EasyJet and Ryanair to then take folks around the continent, but I doubt this will ever happen).

Such large route structures bring with them large fixed (assets, gate rentals, landing fees) and flexible (fuel, labor, financing) charges. Cost-cutting alone will not save any of the Big Six. They must work to both reduce costs and raise revenue / productivity. A WN 737 Captain makes more than a UA 737 Captain, on average, but the WN Captain flies more hours and flights, generating more revenue for WN that exceeds the cost of paying them. They also have a clearly defined fare structure that caters to both the leisure traveller ($99 transcons booked weeks in advance) and the business traveller ($299 transcons booked day of flight).

The Big Six cannot survive charging $300 SFO-JFK, much less $100. But they also cannot survive continuing to charge $3000 when nobody will pay it. At most, there should be five tiers of Economy Cabin fares - 1-3 days out / 7 days out / 14 days out / 21 days out / 30+ days out. The 1-3 day should never be more than three times the WN price ($1000 maximum for SFO-JFK) and the cheapest should be no more than the WN walk-up.

So SFO-JFK would be:
Y - 1-3 Days - (3.0x WN walk-up) - $1000
B - 7-13 Days - (2.5x WN walk-up) - $750
M - 14-20 Days - (2.0x WN walk-up) - $600
H - 21-29 Days - (1.5x WN walk-up) - $450
S - 30+ Days - (1.0x WN walk-up) - $300

The Big Six could then use the Internet to beam "specials" to people when bookings look light. If a weekend flight is running 25% loads, then offer fares at $150.

Yes, some will say "people will wait for the specials". Those that can, may very well do so. Just as they do now. Heck, I often take e-fares if I have some spare time and cash and want to see a city for a day or two.

But if I know I have to be in JFK on a Wednesday, I will book early. The earlier I know I need to be in JFK on that Wednesday the more I can save, but even if I find out 3 days ahead, I can buy a ticket and know I am not getting "soaked".

UA lowered their Y fares from 40-70% in DEN and ORD and evidently saw a boost in people flying them, making more money through enhanced bookings then they would have if they had just left the fares as is and flew less people (people who went to other airlines).

I understand that corporate discounts may very well bring pricing down to, or close to, the levels I have listed. But most leisure travellers do not have access to those fares, and oftentimes employees travelling on leisure do not, either.

Premium Cabin pricing should be 2x Y for 2-Class First or 3-Class Business, with a 3x multiple for 3-Class First to encourage people to buy it instead of upgrading it, but leisure travellers put price first and will only upgrade if they have the miles/certs and feel it is justifiable to spend them.

I am sure that many who flew the Big Six in "the Happy Times" of five years ago would continue to do so if they could afford it. The Frequent Flyer programs pretty much see to that (no snide comments from UA 1Ks, please). But as prices stay high, and service continues to go lower, people are starting to refuse to pay it - either on principle or because their clients and employers will not allow it. This is now revenue lost to the Big Six.

UA could get $2.5 billion in labor cuts, but they lose, what $3.5 billion a year? That's still being in the red $1 billion a year. "Intelligent and honest pricing" could generate that extra $1 billion, and maybe even more, meaning labor cuts would not have to be so deep, helping to improve employee morale.