Gardyloo

Please don't flame me for this; although I've flown a lot I'm still a relative newcomer at big time FT analyses, and my MBA is - er - nonexistent?

But I'm integrating a couple of unrelated - or are they? - items here. One, USAir is back in the tank. Two, UA is differentiating their product like crazy, trying to offer all things to all pax. Three, Delta is sweating the terms of its will. Four, JetBlue and other LCCs are not as profitable as they want to be (and rightly so - look at WN's lowest fares against AS's - not that much of a savings much of the time, sometimes zilch. Not everybody walks up.)

Five, some of AS's partners are merging, joining Sky Team, or otherwise going out with the other guy. Four, Star Alliance is gobbling up new partners as fast as their old ones go lame, while Six, One World is being ditched by the Irish and BA is stonewalling on new OW partners that would compete with them in Africa, eastern Europe and the middle east.

Now AS is thinking about adopting a Euro regional model - no FC, only Club Europe - no, er - Club Alaska.

What if you were sitting on Mahogany Row at AMR right about now? Granted, not the world's strongest cash or net shareholders' equity position, but not yet in ICU and sitting like a canary at DFW. Even some upgrades by the rating agencies recently. Diddly non-Calif. western routes; nothing PNW-Hawaii, Asia, Alaska. Equipment compatibility with AS. SEA as an under-served gateway for your mediocre Asian menu, especially for mid-tier origins like STL. Established inter-corporate partnerships, codeshares, mileage plan deals, all that. Good sticks and bricks, aside from OAK. Wouldn't you be looking anew at AS as a possible acquisition/merger subject?

I guess this is an old horse that gets trotted out periodically, and usually gets poo-pooed, so go ahead with the poos. I can take it. It's all idle speculation, anyway.

But I'm going on a marathon (AS)/AA Plat Challenge MR this weekend in F, and according to the seat maps I'm nearly alone half the time. (Nobody wants to fly in F to SNA at 6 in the morning? Wazzamatta U?) Methinks I will chat with the real frequent fliers to see what they think of these changes.

ConsultantFlyer

I don't think I could have put it any more succinctly than that rjque. I fly AA transcon, and have selected AS as the preferred West-Coast carrier for the following reasons:

1. Great customer service and flexibility
2. Ability to upgrade
3. Decent meals in First Class
4. Competitive Fares

Given the direction seems to be for airlines to push clients towards internet based customer service, and with the significant reduction in value/availability of items 2 - 4, it looks more and more likely that I'll be signing up for a mileage plus account. With WS expanding south, B6 heading north, and continued pressure from WN, AS needs to differentiate their product. While I agree changes need to be made to stay competitive, I don't see re-branding itself as an "upscale" LCC as being the answer.

JohnAx

Legacy-airline managers find themselves trying to manage their way to profitability in the environment they've been thrust into, and the only tool that's shown any success - keeping your employees happy - isn't available to most of them. Playing games with seating doesn't go anywhere someone already hasn't been. Too bad no airline has an engineering department with much innovative capability - the right technical innovation could produce a real advantage for as long as the airline could keep it theirs alone.

smilee

I myself would vote for the 2+3 model, and NOT block the middle seat if that is what they hope to do. But the big question for me is do they still offer free drinks and food on flights?

This summer I flew Air Eurpoa and sat up front. It actually was not that bad. I am not fat, so I do not mind a narrower seat width. Air Europa had 3+3 with every middle seat blocked. I thought it was a bit of a waste to have the middle seat empty as I was too far from my wife and found it kind of useless to have an extra seat, so I sat in the middle and we left the window empty.

On a positive note though, it does make the cabin more quiet and enjoyable for your flight. Less movement and screaming of passengers, and less struggle for overhead bins. They also had a curtain to seperate front/back cabin and had a bathroom that was only for the front passengers (great idea I thought).

For me, if AS brought back the old rules and offered a 2+3 cabin, with reasonable food and beverages, I would stay as an MVPG and probably not switch airlines next year.

whlinder

What about MD-80s? Are they being reconfigured? How is 2x3 on a 737 much different than 2x2 on the MD-80s?

fredmartens

Well, I'm on the list of "poo-poo-ees", I guess, because I've been spouting off that I think AA will buy AS in the next few years for some time now.

I think AA is watching AS's proposed move to more of a euro-cabin (if you will) very carefully while they continue to "sidle up" to their "sister" (as rez agents on both sides have called one another) airline. There's more route sharing going on between AS and AA (though I can't quite figure out all the overlap on the SEA-ORD routes between the two, but I'd look for some consolidation there very soon).

I'll also venture that AS will be a full blown One World partner by the end of 2005, a further move aligning them with AA, especially in light of NW announcing their joining with the Skyteam alliance. I seriously doubt AS has anything to gain by going to SkyTeam, so if you're planning on using those mileage plan miles on NW or CO, I'd get a move on....YMMV, of course, but that's what I'd be doing. Same goes for the worthless MVPG upgrades on NW (anybody want the 8 that I have? you're welcome to them...). Notice that the -900's that AS was going to buy were cancelled? Hmmm. Pretty similar aircraft between both over the main domestic routes, too....

AA hasn't had a viable west coast presence since it bailed out of SJC and dismantled Reno Air; of course, they'd love to have more profitable routes, with the emphasis on profitable. If not for 9/11 and the economic downturn coupled with the lackluster west coast economy (not to mention fuel prices and LCC competition), I think the rumours of this buyout would have been on the street by now. Oh, and AA bankrupt? Yeah, right....that was a real good move on AMR's part to get the union concessions they wanted across the board. AS has finally figured out that they're going to have to let some people go (and I am very sorry to see so many affected), but I wonder if they started being a little more aggressive about dumping some absolutely suicidal costs like paying full medical on many of their part time FA's? While I'm sure this isn't a popular suggestion, it's belt tightening time or bye-bye time, as an unfortunate 750 are about to discover.

I'm so sorry that AS appears to be clutching at straws when it comes to figuring out what their customers want, but all this floundering started when they began to forget what it was that made them so successful in the first place...a well run airline that focused on its core competency...that of a major regional player. If yields are so "up", then why all the bloodletting? It's not what AS is telling people and doing that we should be paying attention to, it's what they're NOT doing and saying that should be so alarming.

I miss John Kelly and the old spirit of AS. I miss flying what used to be a fantastic airline that I used to brag to friends and relatives about. I'm unhappy that AS squeezed its customers first before looking inward to see where it could become more efficient. There are plenty of LCC's on the west coast; what we need is an airline that can differentiate itself among the rest of the "cardboard cutouts". Yup, look at AA now...giving their EXP's space available upgrades on any domestic fare...and then look at their load factors now, as well as their reduced cost per seat mile. Good job, AMR. I can smell the sizzle of a good steak in the kitchen just as easily as I can a skunk on the street.

I also think the elimination of first class is another stupid move under the direction of Bill Ayer. More seats on an airline that can't fill the ones they already have. Dumb, dumb, dumb. This is another plan that, IMHO, will backfire in time...just as the MVPG "Great Upgrade Evaporation of 2004" did. Didn't the MVPG's at your various luncheons for the last year tell you that we wanted a first class cabin? Hello, anyone there? So, while less people fly AS, AA will sit there and wait for the inevitable implosion....

As for me, since I can't seem to blather anything positive about my feelings for AS's new direction(s), I guess I'm going to disappear off the AS board once again for another couple of months while I figure out what exactly I'm going to do about my rapidly dwindling loyalty to this airline for next year's travel budget. I really hope AS ponders their actions regarding the cabin retrofits, for this time, there will be less forgiveness by what remains of their loyal subjects.

BTW, Gardyloo, if you're on the 6:10 to SNA Saturday morning, I'll see ya onboard.

SEA_Tigger

I tend to agree with fredmartens that AS is better off down the road by just joining One World now and aligning itself with AA's schedule, which could include dropping the SEA-ORD flights.

Neither AA nor UA fly direct SEA-BOS, SEA-EWR, SEA-DCA, or SEA-Florida, so those routes could still stay in the system.

If they want to differentiate themselves, keep First Class and take out a row of Economy in front of the overwing exits and enhance your pitch for MVPGs, MVPs, and Y/B fares. Offer a $25 upgrade fee for non-MVP(Gs) to sit there like UA is starting to do with Economy Plus. That way, when your MVP(Gs) can't sit in First, they are not crammed into the back, and will continue to patronize your airline instead of moving to UA or AA and should recover the six seats of revenue you lose in sheer aggregate revenue from keeping people flying you 30-40K a year. Plus you will probably see good penetration of the $25 upgrades, and an extra $25 could be over 10% of the fare paid.

Also, with AA removing MRTC from their 757 fleet, which serves a lot of "leisure" routes to areas like Florida and Las Vegas, having 34-35" pitch on AS 73Gs will be a big incentive vs. 31" on AA 752s.

zz7777zz

With 30 E+ seats (sort of) AS will give all MVP's & MVPG's this year a comp to MVPG+ for 2005. They will have nothing to lose(doing this).....and very little to offer in 2005.
SW

hsmythe

Some responses to questions and comments on my cabin configuration report of this morning:

1. Re free meals and drinks for Premium Economy (the cabin formerly known as First Class):

I don't recall any specific mention of this in the AS pitch to us as we walked through the cabin mockups. However, I'm inclined to think at least something would be retained for the following reasons (how much could the current FC medium haul "snack" of tortilla chips with salsa and a beer cost ?):

- there will definitely be a curtain (but not a solid bulkhead wall) separating the forward and aft cabins. So the potential certainly exists for AS providing different levels of meal and beverage services between the cabins (unlike UA's Economy+, where I believe there is no separator, at least on the 737 -- I could be wrong on this)

- on page 1 of the evaluation form (to be filled out before experiencing the various cabin mockups and receiving the briefing about the pending changes from the AS manager), we were asked to rank various attributes associated with a premium cabin for most and least personal importance (FWIW, my most important rankings were 1: seat pitch, 2: seat width, 3: DigiPlayer IFE provided, 4: food, and 5: bonus miles; my least important attributes were 1: early boarding [I always travel rather light and prefer to be the very last person to board], 2: free drinks [I seldom drink alcohol], and 3: headrest wings [I hate them]). The fact that AS was polling us on food and drink indicates to me that they have not already decided to eliminate it ... but this is just my speculation.

2. Re success of Paid F tickets:

From the intro pitch made by the AS manager today, it appears there is plenty of demand for premium seats (as free upgrades) but only modest success in actually selling F on the transcons and virtually no success on short to medium haul routes (SEA-LAX, SEA-DEN, etc). My data points:

- foremost, the dropping of FC in itself indicates there simply is not huge success in actually selling F -- if there was, AS would be removing Y rows and expanding the F cabin

- the AS manager clearly stated the new Premium Economy would not be fare coded as "First" or even "Business" seats; he stated the qualifications for a Premium seat would be simply MVPG or MVP elite status, or any high Y fare or mileage upgrade or day of departure cash upgrade for non-elites.

3. Re resultant changes to the upgrade process:

This was not mentioned. My own thoughts:

- I will be very curious to see if AS rolls back the current 10K miles for a one-way upgrade perhaps to the lower old level, given the upgrade now would take one from Economy to just Premium Economy (rather than FC)

- I suspect that the greatly expanded number of "premium" seats could result in a return to the complimentary upgrade rules in effect until last year -- ie, an MVPG could confirm a free upgrade at time of booking from any fare, with MVPs confirming some time later. Consider that currently the AS 737-900 has just 16 F seats, and all other AS airplane types just 12 -- with the replacement Concept "A" 25 premium seats would be available, and even more with Concept "B" -- 30 premium seats. I would expect every MVP and MVPG could secure
a premium seat on virtually every flight with those availability numbers.

However, note that if Concept "B" is chosen as the replacement for FC, then the situation is not so good for transcons: currently, a typical transcon 737-900 has 16 premium seats (ie, FC), that same aircraft under Concept "B" would have only 20 (vs. 30) premium seats (ie, Premium Economy) due to the planned physical blocking of all the middle seats in that cabin --- thus, there is very little improvement in premium seating availability for the transcons, and if you are fortunate enough to secure a premium seat it would actually be physically identical to a standard coach seat - albeit with 36" pitch and a guarantee of no one sitting beside you.

- It is possible AS could further adopt the concept of UA's EconomyPlus, and the notion of "elite upgrades" as we have known it could go away completely in favor of the following (note that items (a) - (g) following were not presented at the AS event, and this constitutes my own speculation):

a. the Premium Economy cabin would be designated as "elite preferred" seating -- as such, any MVP or MVPG could select such a seat at time of booking from any fare (just like we currently do for "elite preferred" seating in Y)

b. as a result of (a), the entire process of elite upgrading disappears -- no upgrade time windows dependent upon elite level and fare basis, no maintenance of F and U seating inventory, no "gate upgrade standby list", etc.

c. some AS inventory control of Premium Economy could be achieved by blocking one or two rows in each flight's seat map in the AS computer, and then releasing those blocked seats as it sees fit (high Y fare customers, last minute ticket purchases, etc)

d. day of flight, non-elite AS customers checking in using the AS kiosk could be offered a purchased upgrade into Premium Economy (perhaps $25 one way) to extract additional revenue; I believe UA is planning to begin this for its EconomyPlus

e. of course, for a full load, AS would ultimately assign non-elites seats in the Premium Economy cabin as necessary

f. what I've postulated above is actually consistent with what the AS manager told me privately in our discussion after the group briefing: AS is not planning to offer the Premium Economy seats for sale as a "First" or "Business" fare basis -- all seats on every airplane will be simply "Economy" (ie coach) in computer reservation systems; this applies to transcons as well

g. further, AS could differentiate Premium Economy from UA's EconomyPlus by providing complimentary food and beverages to those seated in that cabin (perhaps identical to current AS FC "meal service" on non-transcons -- a cold sandwich -- comparable to a Subway $ 3.00 mini sandwich for "lunch"/ "dinner" flights, and tortilla chips and salsa on "snack" flights ... then again, maybe scaled down further )

4. Re MD-80s:

I don't recall this being discussed, but my assessment was that the cabin reconfiguration program assumed retirement of the remaining MD-80s, to be replaced with 737s:

- the cabin layout graphics shown to us clearly depicted only the 737 (it was labeled as such)

- Concept "B" (6 across, 3 and 3, 17" seat width) would be physically impossible in the narrower MD-80 (currently 5 across, 3 and 2, 17" seat width in Y), as would even Concept "A" (5 across, 2 and 3, 19" seat width)

- several years ago AS stated its intent to move to an all Boeing 737 fleet; while 9/11 has slowed that effort, it still appears to be the long-range plan as the MD-80s age.

Gardyloo

Friday.

deelmakur

RASMSeatGuy, you need to keep comparisons on an apples to apples basis.
The current AS product is superior to Southwest and JBlue, from the perspective of someone wanting a better seat. I have been willing to pay more, and Alaska has offered a nice alternative, with a price which is higher than discount economy, but below the $2000 transcon tariff most big carriers offer (and never sell, thus simply stoking the flames of upgrade angst on all sides). They change the seating, and I'm gone. That's not petulance. I am a heavy duty flier, and I will pay a premum for a better seat. What they showed the other day is not a better seat (choices B & C).What's great about the American business model is that any vendor can do anything they want. Unfortunately, they cannot control what competitors do, nor can they fully anticipate the reaction of various tiers of customers. If the recent "show and tell" on seating was a validation of what has already been decided, it was a time waster for all concerned. In research, there is a very fine line between validation and self abuse. It really doesn't matter anway. The marketplace will make the decision.

Abby

I hardly know what to say, and for the most part I have given up on trying to say anything at all!

I may sound like another nostalgic AS flyer, but that is how I feel. I started flying Alaska and accumulating AS miles because of the chance to upgrade to FC. Because I often have to travel within Canada, it has been difficult to maintain any kind of status at all with AS Mileage Plan. However, I have gone out of my way to try and book with Alaska and maintained at least MVP status for some years now.

I used to think the service and the comfort in First Class with Alaska was pretty darn good. OK, the seat pitch was a bit small, but other things sure made up for that. I loved it when the FA's were smart and efficient and would get drink orders before take-off so that they could deliver them as soon as possible. I loved the multi-course meals and the way they were served. I loved having a glass of wine with dinner in a comfortable seat. It seemed that most of the AS employees were empowered to make decisions and were pretty happy to work there.

Then it changed. I knew that some things could not be sustained, with the overall industry pressures. But I was ALWAYS willing to pay more to maintain that level of comfort in flying. I don't really like flying and I really appreciate the extras. But the service levels seemed to drop and drop. Suddenly it seemed that every flight I took (and even with paying varying amounts to ensure a FC seat) involved a FA who hid for at least an hour after take-off and seemed annoyed when you asked if you could have a drink. Food service certainly became more limited. Employees in general seemed more snappish, less able to help out with situations. The only thing you could count on in FC was a more comfortable seat. Now it looks as though even that may be going.

Maybe Alaska was too generous with its free Gold upgrades. Maybe that devalued the product (FC). But all of a sudden it seemed that they were no longer willing to provide much service in FC, and at the same time they were demanding that you pay more for it. I even paid full FC for one direction on some trips where I could not get an upgrade in advance. But then I would end up on a flight where it seemed the service was minimal and the feeling was that you didn't deserve any better, you were there on a free upgrade anyway. It didn't matter if you actually paid for the service (even full price), it was simply no longer being provided!

So why is Alaska having problems selling its FC seats???? Gee, I wonder...

It was also a NIGHTMARE to try and get a paid upgrade based on the new MVP qualifying fares. The web site could not be used for a variety of situations and every time I booked I was on the phone for at least 30 minutes, while supervisors were summoned and fares bounced up and down and all around. For a long time, no one seemed to know how to book a paid advance upgrade.

I don't know what the answer is, but I am STILL willing to pay for a decent FC product. I don't know what the magic numbers are for AS to earn a decent return on those seats, but I would really like to see FC retained. And a bit more of the old service, please....

whlinder

So much for the "Alaska will be in One-World by 2005" talk, since AS just announced a code-share deal with DL.

ConsultantFlyer

Amen to that Abby ^ There's really not much else to add, seems that covers off the feeling by many in this forum. I guess all that remains now is to see how the cards play out as it appears the decision has already been made......

deelmakur

They codeshare with everybody. It's one of the ways they keep the takeover wolves at bay.