bernardd

That's hopelessly simplistic. Passengers do NOT choose only by fare, though it may be the most significant factor for some. There are plenty of other factors though; scheduling if very important to businesses, for some the overall cost including baggage and extraneous fees is important, and yes, for some, comfort considerable weight.

It's frankly the job of airline managers, including AA's, to make us think more about those other factors and get this business out of the commodity mentality, but they have, for the most part, collectively failed. Ironically it seems to me that Southwest have done a far better job of branding themselves as a "competent, value for money provider with decent service" and by accident or design, actually making their product relatively hard to price-shop.

In the end the airline business should be no different to, say, Hotel branding where the chains operate a range of different brands to target different customer groups and I've long wondered if this is the future for the legacies - instead of a choice of "veal crate" or ultra luxurious service, perhaps they ought to radically increase the number of offerings (ie 4+ class planes instead of 2+ that AA seems to offering) in order to up sell passengers to whatever they're willing to pay to maximize the revenue?

halls120

what US carrier has ever offered a "superior" coach product?

In March I flew 4 AF flights on aircraft that had their "Premier Voyaguer" product. It was completely full on two of the flights, and 75% on the other two.

Maybe if a US flag carrier actually offered something similar, people would indeed buy it.

carlosdca

What?
If someone is obese, everybody will have a hard time (the overweight person and seatmates), in 3-3-3, 3-4-3 or even in a true Premium Economy product.

I am not obese at all (more of an athletic built, but we), 6' and broad shoulders. And lots of guys here are probably the same, just normal sized persons. And we are all probably not very comfortable in Y on any seat or configuration (I can manage it on an exit row/aisle seat, despite being bumped once in while).

3-4-3 is just going to be worse [again, booo]

I just hope MCE is 3-3-3, as they say it is going to be and that availability will be almost always virtually guaranteed for EXPs or PLATs (I alternate btwn those status).

jamar

That and JL- though with the JL+AA ATI, if I decide to book PVG-NRT-YVR on JL instead of PVG-LAX-YVR on AA+AS, AA sees the money anyway. So does it make a difference?

...actually, I wonder if they could just say "Don't like 3-4-3 to Asia? Fly JL, it's all the same to us."

sxf24

Price and schedule are by far and away the most important factors for influencing purchase decisions.

It is hard to get out of the commodity mentality when consumers treat your product like a commodity.

I was referring to MRTC, as well as TW and ME's efforts to use a better-than-everyone-else's coach product to obtain a revenue premium.

All of the efforts were dismal failures.

Random Flyer

The key difference between MRTC and the concept of charging a premium for MCE would be that with MTRC, there was no cheaper option available. It has apparently been proved that there are a large number of people who will invariably select the cheapest fare and MTRC prevented AA, generally speaking, from getting their fare offering at the top of the sorted-by-price list.

The MRTC experience proves nothing as to to whether or not a premium for MCE would work because the base Y seats would remain in parallel.

As one who will apparently get MCE for free (but there's always the possibility that that could change...) my main concern is availability. I can see a new roulette game coming along where one isn't sure whether to book the better timed flight A, which currently has no MCE available, or the less convenient flight B which does. Will flight A MCE open up later due to upgrades, etc, or not...

Random Flyer

Another thought - Is this a slippery slope? As well as the 777 3-4-3, I have also previously experienced 2-4-2 on the 767. And we really do not want to go there.

AZbba

The truth is the vast majority of people choose based on price. Most of them will not even realize it's 3-4-3 (just that the seating is a bit tight), and if they do they will not realize that other carriers offer 3-3-3, they will just assume it's the plane and that's how they must all be. And when it's time for them to book their next vacation a year later, the cramped seats will be a distant memory and they will shop based on price again.

bernardd

As I was trying to point out a couple of posts ago, there are many, many groups of people who influence airline ticket purchase. What you've described could well apply to groups of once every few years long haul passengers who pay for their own tickets. It wouldn't necessarily apply to more frequent business travelers who have historically generated a lot of AA's revenue. The fundamental problem here which someone has to be creative about is if you build your product to satisfy the first group you run a huge risk with the second. One way the airline attempts to get round that is with status and upgrades, but there are others including better choices of hard product and matching fare rules that get the right passengers into the right product.

jordyn

Blah blah blah. As others have pointed out, this is an excuse trotted out by companies that are utterly unable to differentiate their product through any means other than price.

Fortunately, there's evidence to prove my point available in the marketplace today. Exhibit number 1 is JetBlue, the carrier who has pushed AA out of market after market. JetBlue has a notably superior coach product to AA--better pitch throughout coach, better entertainment, and a reasonably priced buy-up to an "even more legroom" seat, which they make money on despite the fact that their standard product is better than AA's. Despite having no first class, JetBlue manages to achieve nearly the same RASM as AA, so they're generally not beating AA by undercutting prices--they're offering a better product. Also, it beggars belief that in every other segment of the travel industry there's segmentation where people are willing to pay more for quality but for some reason it's totally inapplicable to airline travel. All you need to do is look at the sold-out premium cabins on carriers like SQ and CX versus the upgrade-fest on AA to realize that quality matters in people's decision-making proces.

And the obvious exhibit in contrast to AA's failed MRTC experiment is E+ on United which Delta and now American are emulating. United has long maintained that E+ is a positive for the airline, despite being a significant part of most coach cabins (unlike the pathetic 18 seats that AA is putting in its 777's); it makes the coach experience tolerable for elites and high-yield passengers.

As to the general question at hand, I'd certainly never put myself in a position where I'd have a reasonable chance to end up flying in 10-across coach. I'll pay a premium to BA to get into a reasonable premium economy product, but I'm certainly not going to pay extra to AA for something that's roughly equivalent to United's E+ (most elites get this for free), especially since in the event of Irrops the downside is worse on AA than either UA or BA.

I feel like AA could have used bankruptcy to try to position itself as an upscale carrier once again, and doing something like 3-3-3 in coach and 2-4-2 in premium economy would have been good evidence that they were headed in that direction. I guess it's just more of the race to the bottom for the legacy carriers, though. Hopefully bankruptcy will get AA's costs lower than any other carriers, because if you're only competing on price, it's pretty imperative that your costs are lower than everyone else's as well.

sxf24

I hardly think it is an excuse, when every available data point indicates that consumer decision regarding economy class travel are driven almost entirely by price and schedule.

JetBlue is an interesting case study. They've been able to grow quickly and attract a loyal following. While their superior inflight product doesn't hurt, they've picked up market share because of their lower prices. If AA had costs on par with JetBlue, it would have been able to compete based on price. If passengers were really flying JetBlue because of the product, JetBlue's stage-length adjusted yields would be higher than its legacy competitors.

At the end of the day, you can try to distinguish your economy class hard product all you want. However, you're not going to be economically successful unless you're able to be competitive on price.

jordyn

I provided three examples of how this proposition is incorrect. Your counter-argument is to simply repeat your original argument. It's clear "every available data point" does not agree with your argument. As for JetBlue in particular...

I already pointed out that JetBlue's RASM is already very close to AA's. I can't find any stage-length adjusted data for either carrier that's recent enough to be worth comparing, but without any premium cabins JetBlue is within a few percent of AA's RASM. AA doesn't break out revenue by cabin, but I'd absolutely assume that JetBlue is commanding higher fares on equivalent coach flights based on that data.

sxf24

No, I'm pretty sure that the example of JetBlue does not support your argument. Let's look at it from this perspective: if AA implemented JetBlue style cabins on all of its aircraft (same pitch, amenities, etc.), do you think it could charge higher fares while still maintaining the same load factors?

For one, you should look at yield, not RASM. For the first quarter, JetBlue had a yield of 13.86 cents, while AMR had a yield of 15.21 cents. There were similar spreads between PRASM.

Again, if you'd like to provide data that shows JetBlue commands a revenue premium over AA because of its superior coach product, I'd be interested to review.

jordyn

Could AA get higher average fares with the same load factors? Absolutely! Would it make up for the costs? I'm less certain; with proper execution, probably.

Why? According to the Airline Data Project:

For the record, I'm really looking at PRASM, which seems like the most reasonable metric for comparison.

No there weren't. PRASM was exactly what I was looking at. AA's Q1 RSAM was 12.0 cents versus 11.49 for JetBlue. That's a 4.2% difference, and once again JetBlue does this with no premium cabins.

sxf24

Again, there is no data to prove this is the case.

If your thesis is that a better product drives higher fares, you should be looking at yield, not PRASM. If your thesis is that seat pitch and PTVs drive loads and yields, you should apply for a job at an inflight entertainment vendor.

In addition, you need to note the difference between Total Revenue per Available Seat Mile (RASM) and Passenger Revenue per Available Seat Mile (PRASM). JetBlue's RASM is inflated by revenue from LiveTV, while PRASM is under no such influence.