preview new cabin configurations in September
Sep 16, 2004, 12:11 pm
#46
Join Date: Dec 2002
Location: Sea-Tac, WA
Posts: 854
Originally Posted by 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.
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.
It appears most here ditch AS when they can't get a free upgrade anyway, so selling a premium low cost product may be a good idea. AS a side note we have heard nothing about the removal of first class and we are an area that has a need to know. Its been discussed in the past, but there are no decisions on the matter. I think a previous post hit the nail on the head. We aren't a high load factor airline, so adding more coach seats and removing First Class is not necessarily the answer.
Sep 16, 2004, 12:16 pm
#47
Join Date: Apr 2002
Location: An island in the Pacific
Posts: 2,651
Originally Posted by RASMguy
We can't provide a high fare product with low fare mix. Don't get me wrong, I don't suggest becoming these carriers, but something in between. Alaska could become like a premium LCC and maintain a superior product over the others.
Sep 16, 2004, 12:51 pm
#48
Join Date: Oct 1999
Location: Third planet from the Sun
Posts: 7,022
close to 90% of all people seated on AA domestic first class cabins are their on Yup fares or using upgrades/status/points. I am sure the same numbers hold true for Delta and United. First Class as a revenue stream is dead in the water. Alaska has the choice of:
A)Keeping first class as a reward for people to fly on their airline (like AA/US/DL and UA does), or
b)Change over to a Southwest/JetBlue model with no first class, or
C)Only offer First class on the trans cons and all coach up and down the West Coast.
By the looks of things, model A is not working so Alaska is thinking about doing the right thing and moving torwads a B or C model.
A)Keeping first class as a reward for people to fly on their airline (like AA/US/DL and UA does), or
b)Change over to a Southwest/JetBlue model with no first class, or
C)Only offer First class on the trans cons and all coach up and down the West Coast.
By the looks of things, model A is not working so Alaska is thinking about doing the right thing and moving torwads a B or C model.
Sep 16, 2004, 1:51 pm
#49
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Join Date: Sep 2002
Location: Portland
Posts: 11,572
Originally Posted by Tango
close to 90% of all people seated on AA domestic first class cabins are their on Yup fares or using upgrades/status/points. I am sure the same numbers hold true for Delta and United. First Class as a revenue stream is dead in the water. Alaska has the choice of:
A)Keeping first class as a reward for people to fly on their airline (like AA/US/DL and UA does), or
b)Change over to a Southwest/JetBlue model with no first class, or
C)Only offer First class on the trans cons and all coach up and down the West Coast.
By the looks of things, model A is not working so Alaska is thinking about doing the right thing and moving torwads a B or C model.
A)Keeping first class as a reward for people to fly on their airline (like AA/US/DL and UA does), or
b)Change over to a Southwest/JetBlue model with no first class, or
C)Only offer First class on the trans cons and all coach up and down the West Coast.
By the looks of things, model A is not working so Alaska is thinking about doing the right thing and moving torwads a B or C model.
Sep 16, 2004, 2:21 pm
#50
Join Date: Feb 2001
Programs: UA 1k, AA Plt, MR Lifetime Plat & Amb
Posts: 1,829
Originally Posted by Tango
close to 90% of all people seated on AA domestic first class cabins are their on Yup fares or using upgrades/status/points.
My host was a Mileage Plan rep named Chase who said that these changes are not set in stone and may or may not happen; though he didn't allude to the probability of it.
He mentioned that most first class cabin's flying are filled with some type of UG that Tango mentions above and so I asked how many F seats they are selling. 1.2 for every 12 was the answer.
The 3 + 3 (option A) was not very desirable to me at all. The 3 + 2 wasn't bad at all and I think most would be satisfied. Both of these services would have free drinks, the exclusive lav (yah right), and a "differentiated" food service from standard coach.
Chase did say that the ranks of each MVP and MVPG grow at 7-8% a year and the changes are being considered in part to be able to continue to fulfill the benefits promised.
Last edited by Dudemon; Sep 16, 2004 at 2:24 pm
Sep 16, 2004, 2:21 pm
#51
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Abby's first post echoed quite strongly with me. And while Punki and I don't see eye to eye much on the issue of First Class upgrades (and not because of our height differences 
), she does have a very good point in that when AS went to "unlimited upgrades for elites", they sowed the very "Seeds of Destruction" that have come back to haunt them now. The same seeds that may come back to haunt every other major that has done so (and UA is about the only hold-out).
When it was only "certs or miles" (like it remains on UA), MVPGs, MVPs, and regular customers had to make the decision on when and where to fly First Class. I bet a number of those people flew Economy on AS, saving their certs for the "special" trips. I myself flew AS economy on flights under an hour and upgraded on my two hour runs. That AS used to offer the 50% First bonus for U tickets was even more gravy. Between the First mileage, on-line booking, and kiosk checkin bonuses, you almost earned a free upgrade for every SEA-LAX/SNA/SAN round-trip!
Then AS decided to allow any MVPG and MVP to upgrade any fare, free of charge. They also recinded the First Class mileage bonus for upgraded flights and doubled the mileage redemption levels. That tossed most of us non-elites into the back, because it just wasn't worth it or even if it was, it took a lot more trips in Economy to generate the miles to do it, so they were no longer effectively competing for upgrade seats.
So MVP(G)s who flew 50% or more in coach were now flying in First a lot more. Sometimes all the time. They got used to it. They began to accept this as "the right way" to be treated by AS for their loyalty.
AS soon found out that this new program resulted in higher costs. Every First Cabin on every flight was going out 100% and the costs of providing the service increased. Yet revenues had not. So AS started to cut back on the benefits. Still, it didn't stem the tide.
AS had two choices - drop First Class or try and make it generate more revenue. They did informal polls, found their elites were aghast at the idea of no First Class, and implemented Option 2.
Now, if the certs/miles was still the "upgrade path", and you offered complimentary upgrades for Q+ fares, you would probably have not heard much of a whisper out of AS elites. If anything, you might have heard some "huzzahs!" as it meant that when out of miles/certs, they could spend more and still confirm into First.
But the elites had come to accept "free upgrades from any fare" as an entitlement/right for their patronage, and taking that way frosted lots of them. So they either go to UA/AA (and use certs/miles [AA EXP-excepted]) or CO/NW and continue to enjoy "free upgrades" on any fare.
But like the decisions to launch transcon service, the decision to make all elite upgrades free from any fare had unseen consequences. And once AS realized the...mistake...they had to back-track and no customer likes it when benefits are taken away from them, regardless of the industry.
I agree.
AS First is about $100 more then AS Y on many of the routes I have looked at. Now, it is quite true that AS Y is many multiples of what Y is on WN and B6, but it is also many multiples less then what the majors want. AS Y will usually barely get you restricted mid-tier Economy on the majors.
Pricing pressures are very tight, to be sure. Even with more reasonable Y and F fares, a lot of people cannot or will not pay more then the "bare minimum". Yet AS cannot offer Low Cost Carrier pricing without being a Low Cost Carrier, which they are not. And even if they can somehow transform themselves into AA/DL/CO/NW's version of UA's "TED", without actually being a part of those airlines, they risk losing that alliance with another carrier who can offer them a better deal. And when that happens, what does AS have to fall back on? Do they just re-trench in Mexico and Alaska, offering a few connections from SEA, PDX, LAX, and SFO to those destinations?
), she does have a very good point in that when AS went to "unlimited upgrades for elites", they sowed the very "Seeds of Destruction" that have come back to haunt them now. The same seeds that may come back to haunt every other major that has done so (and UA is about the only hold-out).When it was only "certs or miles" (like it remains on UA), MVPGs, MVPs, and regular customers had to make the decision on when and where to fly First Class. I bet a number of those people flew Economy on AS, saving their certs for the "special" trips. I myself flew AS economy on flights under an hour and upgraded on my two hour runs. That AS used to offer the 50% First bonus for U tickets was even more gravy. Between the First mileage, on-line booking, and kiosk checkin bonuses, you almost earned a free upgrade for every SEA-LAX/SNA/SAN round-trip!
Then AS decided to allow any MVPG and MVP to upgrade any fare, free of charge. They also recinded the First Class mileage bonus for upgraded flights and doubled the mileage redemption levels. That tossed most of us non-elites into the back, because it just wasn't worth it or even if it was, it took a lot more trips in Economy to generate the miles to do it, so they were no longer effectively competing for upgrade seats.
So MVP(G)s who flew 50% or more in coach were now flying in First a lot more. Sometimes all the time. They got used to it. They began to accept this as "the right way" to be treated by AS for their loyalty.
AS soon found out that this new program resulted in higher costs. Every First Cabin on every flight was going out 100% and the costs of providing the service increased. Yet revenues had not. So AS started to cut back on the benefits. Still, it didn't stem the tide.
AS had two choices - drop First Class or try and make it generate more revenue. They did informal polls, found their elites were aghast at the idea of no First Class, and implemented Option 2.
Now, if the certs/miles was still the "upgrade path", and you offered complimentary upgrades for Q+ fares, you would probably have not heard much of a whisper out of AS elites. If anything, you might have heard some "huzzahs!" as it meant that when out of miles/certs, they could spend more and still confirm into First.
But the elites had come to accept "free upgrades from any fare" as an entitlement/right for their patronage, and taking that way frosted lots of them. So they either go to UA/AA (and use certs/miles [AA EXP-excepted]) or CO/NW and continue to enjoy "free upgrades" on any fare.
But like the decisions to launch transcon service, the decision to make all elite upgrades free from any fare had unseen consequences. And once AS realized the...mistake...they had to back-track and no customer likes it when benefits are taken away from them, regardless of the industry.
Originally Posted by rjque
I think the reason F purchases are so low (on the majors) is because F is so much more expensive than Y (on the majors). AS, however, has been experiencing a much higher purchase factor on the transcons, primarily due to reasonable pricing.
AS First is about $100 more then AS Y on many of the routes I have looked at. Now, it is quite true that AS Y is many multiples of what Y is on WN and B6, but it is also many multiples less then what the majors want. AS Y will usually barely get you restricted mid-tier Economy on the majors.
Originally Posted by RASMGuy
We get low fare mix, like our LCC foes. We can't provide a high fare product with low fare mix.
Last edited by SEA_Tigger; Sep 16, 2004 at 2:24 pm
Sep 16, 2004, 2:56 pm
#52
Join Date: Sep 2003
Location: An Island Paradise Near Seattle
Posts: 599
Minor Qublling On Concept A and Concept B
I was part of one of the focus group sessions. In the large printed graphics that were shown before the cabin preview and used in the after-preview discussions, a bulkhead was *clearly* present.
That said, the preview could have been a lot better. The seats used were not the precisely right seats in precisely the right configuration (in terms of console, possibly recline, tray tables, seat covering, etc) that are being studied. I found it very hard to like anything about either Option A (3x3 with middle-blocking for transcons) or B (2x3). The "high chair tray" thing is stowed in an underseat compartment that is a little bigger than the average personal IFE box, so it looks like it will definitely restrict underseat stowage when it's not in active use.
My mainline AS flying is up and down the coast or to AK; ergo, I see this as a pretty serious degradation of the product. While preboard, guaranteed overhead space, etc are *nice*, being able to enjoy a nice wide window seat and only having to climb over one person is the major attaction for me. When forced by economic or load necessity to sit in back, I'd almost rather stay home than have a middle or window. Maybe I'm just weird.
Here's what's odd to me: AA runs their F with a 21"-wide seat at 40" pitch on their 737-800s. UA's ex-Shuttle 737-500s that run the West Coast are 20.5 with a 38 pitch. DL's 738's are 20.5 with 38 pitch. Even CO, where anyone with a pulse is an Elite For A Day has 38" pitch with a 21" seat on their 738s. With the 19" seat plans at 37" pitch, the personal space would be roughly equivalent to the CRJ's with F that United Express runs, and there is UNIVERSAL *****ing and moaning about this. With the 3x3 config, the actual seat width and pitch would be *almost* the same as a QX Q200. Is this really a premium product that is being considered?
Having flown Club Europe and LH's intra-Europe biz product, I can't help but be profoundly underwhelmed. My preferences, in order:
1) Keep things as they are;
2) Don't change the aircraft at all; modify the plan by reducing the number of MVPs and Golds by increasing qualification requirements until upgrade demand better matches available seats. Life is tough; you want to be assured of getting up front, you pay. Otherwise, you rolls your dice, you takes your chances.
3) 2x3 with guaranteed seat blocking for Golds (IE, if there's a gold on either the aisle or window, then only the opposite seat can be sold. If it's a row of three MVPS for coastal runs, tough.). Seat blocking for all members should extend to the Midcon, MX and AK runs, though.
The other posisbilities are untenably bad. I'd rather have a good product that I can expect as a random treat than a mediocre product that I'm virtually assured of.
One point that didn't get kicked around in our group was "how often, when in coach, are you as an elite essentially forced to take a sucky seat (whatever sucky means to you). I usually get Exit aisles if I'm not up front, and aside from not having as convenient a place to rest my drink, it's 65% as good as being up front.
Eric
That said, the preview could have been a lot better. The seats used were not the precisely right seats in precisely the right configuration (in terms of console, possibly recline, tray tables, seat covering, etc) that are being studied. I found it very hard to like anything about either Option A (3x3 with middle-blocking for transcons) or B (2x3). The "high chair tray" thing is stowed in an underseat compartment that is a little bigger than the average personal IFE box, so it looks like it will definitely restrict underseat stowage when it's not in active use.
My mainline AS flying is up and down the coast or to AK; ergo, I see this as a pretty serious degradation of the product. While preboard, guaranteed overhead space, etc are *nice*, being able to enjoy a nice wide window seat and only having to climb over one person is the major attaction for me. When forced by economic or load necessity to sit in back, I'd almost rather stay home than have a middle or window. Maybe I'm just weird.
Here's what's odd to me: AA runs their F with a 21"-wide seat at 40" pitch on their 737-800s. UA's ex-Shuttle 737-500s that run the West Coast are 20.5 with a 38 pitch. DL's 738's are 20.5 with 38 pitch. Even CO, where anyone with a pulse is an Elite For A Day has 38" pitch with a 21" seat on their 738s. With the 19" seat plans at 37" pitch, the personal space would be roughly equivalent to the CRJ's with F that United Express runs, and there is UNIVERSAL *****ing and moaning about this. With the 3x3 config, the actual seat width and pitch would be *almost* the same as a QX Q200. Is this really a premium product that is being considered?
Having flown Club Europe and LH's intra-Europe biz product, I can't help but be profoundly underwhelmed. My preferences, in order:
1) Keep things as they are;
2) Don't change the aircraft at all; modify the plan by reducing the number of MVPs and Golds by increasing qualification requirements until upgrade demand better matches available seats. Life is tough; you want to be assured of getting up front, you pay. Otherwise, you rolls your dice, you takes your chances.
3) 2x3 with guaranteed seat blocking for Golds (IE, if there's a gold on either the aisle or window, then only the opposite seat can be sold. If it's a row of three MVPS for coastal runs, tough.). Seat blocking for all members should extend to the Midcon, MX and AK runs, though.
The other posisbilities are untenably bad. I'd rather have a good product that I can expect as a random treat than a mediocre product that I'm virtually assured of.
One point that didn't get kicked around in our group was "how often, when in coach, are you as an elite essentially forced to take a sucky seat (whatever sucky means to you). I usually get Exit aisles if I'm not up front, and aside from not having as convenient a place to rest my drink, it's 65% as good as being up front.
Eric
Sep 16, 2004, 3:29 pm
#54
FlyerTalk Evangelist
Join Date: Sep 2002
Location: Portland
Posts: 11,572
Originally Posted by Tango
Why not reserve the current upgrade policy for those that fly 75k plus each year and everyone else has to either use miles or certificates to upgrade?
Sep 16, 2004, 4:14 pm
#55
Join Date: May 2003
Location: SFO, mostly
Posts: 2,204
So, Alaska complains that they are getting "low fare mix" on their routes. How is that any different from any other carrier? There are only a handful of routes nation-wide that have enough business or int'l connect traffic to support lots of full-fare purchases. Is there any carrier right now that has a particularly "high" fare mix?? Alaska has somewhat lower unrestricted and F fares than the majors, but in theory, that should be somewhat compensated by the fact that Alaska is selling more of those "unrestricted" type fares than other carriers. Especially when you consider the fares up in the 49th state, I would think Alaska's RASM should at least be in the ballpark of what the major "full service" carriers get on domestic routes.
Furthermore, the kind of revenues Alaska gets cannot dictate 100% the kind of service they provide. Just because Alaska doesn't have a "high fare" clientele doesn't mean that they can zip the amenities and still retain their customers. I think Alaska takes its customer loyalty for granted, and probably also doesn't view United as the viable competitor it is. UA may be in Chap 11., but they have restructed such that their costs are now lower than Alaska's (for the time being, at any rate). UA competes with AS on many west coast routes; UA generally matches AS fares; UA planes on these routes are full. Excuse me, but how is UA's business model broken?? Certainly, UA has been the victim of poor management in the past, but I really believe UA is getting its act together and his here to stay. Furthermore, UA has Economy Plus, First Class, and very good cabin service. Alaska may have a lot of alliances, but they don't have any ties to UA/Star Carriers, and I fear that they will lose a lot of business to United if they don't offer a comparable calibre of service.
I think management at AS has blinders on. It seems they are only thinking about staying a step ahead of Southwest's no-frills service. But, that's only one element of the competition they face. In reality, they need to think about carriers like UA, and what they can do to keep from losing frequent flyers to both Southwest and United.
Furthermore, the kind of revenues Alaska gets cannot dictate 100% the kind of service they provide. Just because Alaska doesn't have a "high fare" clientele doesn't mean that they can zip the amenities and still retain their customers. I think Alaska takes its customer loyalty for granted, and probably also doesn't view United as the viable competitor it is. UA may be in Chap 11., but they have restructed such that their costs are now lower than Alaska's (for the time being, at any rate). UA competes with AS on many west coast routes; UA generally matches AS fares; UA planes on these routes are full. Excuse me, but how is UA's business model broken?? Certainly, UA has been the victim of poor management in the past, but I really believe UA is getting its act together and his here to stay. Furthermore, UA has Economy Plus, First Class, and very good cabin service. Alaska may have a lot of alliances, but they don't have any ties to UA/Star Carriers, and I fear that they will lose a lot of business to United if they don't offer a comparable calibre of service.
I think management at AS has blinders on. It seems they are only thinking about staying a step ahead of Southwest's no-frills service. But, that's only one element of the competition they face. In reality, they need to think about carriers like UA, and what they can do to keep from losing frequent flyers to both Southwest and United.
Last edited by sltlyamusd; Sep 16, 2004 at 4:34 pm
Sep 17, 2004, 1:03 pm
#57
FlyerTalk Evangelist
Join Date: Mar 1999
Posts: 12,097
First class economics
If my analysis is correct, first class passengers take up 69% more real estate on an AS 737 than coach passengers (4x36" vs. 6x32", which works out to 11.11 passengers per 100" in F vs. 18.75 passengers in Y).
Note that this figure is reduced to 40% on an MD 80.
This doesn't translate into the fact that first class fares must be 40% (or 69%) higher in F for F to make sense. A big chunk of cost is driven by head (and its checked-in luggage) and not by real-estate occupied: fuel, reservations & ticketing, check-in, security, all the various taxes on a ticket. Only a few are different between cabins (food & drink per head cost is slightly higher in F).
Don't really know what the excact break-even figure is, but there's no doubt that the economics (and premium needed to make it work) would improve if AS added an extra seat per row--the real estate consumption of E+ on the 737 would be 35% more than regular Y, vs. 69% today.
However, there would be nothing worse for the economics than the defection of your most valuable customers to a competitor due to product degradation...it's happened before, and it will continue to happen again.
Note that this figure is reduced to 40% on an MD 80.
This doesn't translate into the fact that first class fares must be 40% (or 69%) higher in F for F to make sense. A big chunk of cost is driven by head (and its checked-in luggage) and not by real-estate occupied: fuel, reservations & ticketing, check-in, security, all the various taxes on a ticket. Only a few are different between cabins (food & drink per head cost is slightly higher in F).
Don't really know what the excact break-even figure is, but there's no doubt that the economics (and premium needed to make it work) would improve if AS added an extra seat per row--the real estate consumption of E+ on the 737 would be 35% more than regular Y, vs. 69% today.
However, there would be nothing worse for the economics than the defection of your most valuable customers to a competitor due to product degradation...it's happened before, and it will continue to happen again.
Sep 17, 2004, 2:07 pm
#58
Used to be Sydneysider
Join Date: Jul 2001
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Programs: AS MVP/Gold (and 75K aspirant)
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Originally Posted by hillrider
However, there would be nothing worse for the economics than the defection of your most valuable customers to a competitor due to product degradation...it's happened before, and it will continue to happen again.
^ ^
Sep 18, 2004, 9:23 am
#60
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Unfortunately, all of this kind of decision making is accompanied by corporate America's latest infatuation..... victimization. That is, they are in dire financial straits because the customer didn't pay enough. Since the tickets we bought were paid at the rates they established, we can only assume they must have expected a tip to cover the rest. In an attempt to explain to the help why they are being downsized, this theory is repeated, resulting in the kinds of dialogue you see in some of the posts on these, and other FT threads, as well as the occasional onboard meal that comes sliding at you (as opposed to being handed) when you are in one of those soon to disappear chairs. Speaking of those, any changes which occur will not be what you wanted, or what you expected, but rather, in the eyes of some of the folks who help make the decision..... what you deserve. 