Airline Business - AA interested in "unbundled" pricing
Oct 7, 2008, 4:54 pm
#136
Original Member
Join Date: May 1998
Location: Hellsea - NY, NY, USA
Programs: AA EXP, UA 1K, Marriott LT Titanium
Posts: 1,994
There are other groups who do care, and who will pay a little more for miles and status. The key to making this work is pitching a 100% mileage product at a price premium which that group (and their employers!) will pay. The level of premium that will work is going to vary from customer to customer, as well as being dependent on the competition from WN, B6, VX etc etc.
T&E/T&I is becoming quite the target of late as cost cutting measures abound across the corporate arena.
Oct 7, 2008, 4:57 pm
#137
Join Date: Dec 2007
Location: Now:AUS (again); Previous: LGA/EWR (BLKYN, missing JFK), AUS, SAT
Programs: Current: UA-Silver, Former AA Plat, DL Silver
Posts: 593
Interesting Dallas News article with WN response to AA ala carte. WN is picking up Dallas business travelers. Highlight....
"In a 2006 survey taken in markets that Southwest serves, 17 percent of customers who had taken four trips or more said they had flown Southwest the most often in the previous year and 30 percent had flown American Airlines the most.
But in a survey taken this year, Southwest had captured 24 percent of frequent travelers, and American had dropped to 21 percent.
Mr. Ridley acknowledged that other airlines may be right that they can make more money by charging fees despite the annoyance factor.
But they may be picking up $300 million in fees while losing $600 million in fares from passengers who go to Southwest or other airlines that don't charge fees, he said. "
Should be more interesting once Wright is gone in a couple of years
http://www.dallasnews.com/sharedcont...1.26ebba1.html
"In a 2006 survey taken in markets that Southwest serves, 17 percent of customers who had taken four trips or more said they had flown Southwest the most often in the previous year and 30 percent had flown American Airlines the most.
But in a survey taken this year, Southwest had captured 24 percent of frequent travelers, and American had dropped to 21 percent.
Mr. Ridley acknowledged that other airlines may be right that they can make more money by charging fees despite the annoyance factor.
But they may be picking up $300 million in fees while losing $600 million in fares from passengers who go to Southwest or other airlines that don't charge fees, he said. "
Should be more interesting once Wright is gone in a couple of years
http://www.dallasnews.com/sharedcont...1.26ebba1.html
Another example would be how GM cheaped out the old Malibu to save money upfront. It condemned the car to rental lots and not selling without significant incentives. The new Malibu is the complete reverse of that and GM can't build the car fast enough.
Cheapening the product rarely ever works.
Oct 7, 2008, 7:22 pm
#138
Join Date: Apr 2001
Location: DFW
Programs: AA EP 3MM, UA Silver, Bonvoy LT TIT, Hyatt Explorist, HH Silver, Caesars PLT
Posts: 7,259
What's that old saying about your nose to spite your face? It would apply here.
Another example would be how GM cheaped out the old Malibu to save money upfront. It condemned the car to rental lots and not selling without significant incentives. The new Malibu is the complete reverse of that and GM can't build the car fast enough.
Cheapening the product rarely ever works.
Another example would be how GM cheaped out the old Malibu to save money upfront. It condemned the car to rental lots and not selling without significant incentives. The new Malibu is the complete reverse of that and GM can't build the car fast enough.
Cheapening the product rarely ever works.
Oct 7, 2008, 8:21 pm
#139
Join Date: Jun 2001
Location: New York, NY
Posts: 3,698
What's that old saying about your nose to spite your face? It would apply here.
Another example would be how GM cheaped out the old Malibu to save money upfront. It condemned the car to rental lots and not selling without significant incentives. The new Malibu is the complete reverse of that and GM can't build the car fast enough.
Cheapening the product rarely ever works.
Another example would be how GM cheaped out the old Malibu to save money upfront. It condemned the car to rental lots and not selling without significant incentives. The new Malibu is the complete reverse of that and GM can't build the car fast enough.
Cheapening the product rarely ever works.
Oct 7, 2008, 9:03 pm
#140
FlyerTalk Evangelist
Join Date: Jul 2000
Location: in the vicinity of SFO
Programs: AA 2MM (LT-PLT, PPro for this year)
Posts: 19,781
Oct 7, 2008, 9:08 pm
#141
Join Date: Mar 2007
Location: DFW
Programs: AA EXP 1.4 MM Hertz Gold, National Executive Elite, Starwood Gold, Hyat Gold
Posts: 367
If AA messes with EQM/Segments and charges more for them I will jump ship I go to WN. DAL is a more convenient airport and is spite of all the jokes WN is a quality airline.
Oct 7, 2008, 9:26 pm
#142
Join Date: Jun 2001
Location: New York, NY
Posts: 3,698
That's the usual counterargument.
The counter-counter arguments are the premiums that actual good airlines are able to charge, statistics like the movement of fliers to Southwest in the article quoted above, and the ability for premium players in every other segment of the travel and service industries to command price premiums based on quality.
The counter-counter arguments are the premiums that actual good airlines are able to charge, statistics like the movement of fliers to Southwest in the article quoted above, and the ability for premium players in every other segment of the travel and service industries to command price premiums based on quality.
Oct 8, 2008, 3:25 pm
#143
Join Date: Dec 2007
Location: Now:AUS (again); Previous: LGA/EWR (BLKYN, missing JFK), AUS, SAT
Programs: Current: UA-Silver, Former AA Plat, DL Silver
Posts: 593
That's the usual counterargument.
The counter-counter arguments are the premiums that actual good airlines are able to charge, statistics like the movement of fliers to Southwest in the article quoted above, and the ability for premium players in every other segment of the travel and service industries to command price premiums based on quality.
The counter-counter arguments are the premiums that actual good airlines are able to charge, statistics like the movement of fliers to Southwest in the article quoted above, and the ability for premium players in every other segment of the travel and service industries to command price premiums based on quality.
Oct 9, 2008, 1:13 am
#144
Join Date: Aug 2008
Posts: 514
Why are we reading this when oil is down 38% from its high??? It is trading at < $88 / bbl as of 08 October 2008. With the economy slowing down and airlines chasing fewer paying travelers, this seems like exactly the wrong time to do something so customer-unfriendly as introducing reduced- or no- EQM fare classes. If AA takes the AC approach, it may just push me all the way to always just flying the cheapest carrier regardless of affiliation (which would mean a lot of WN - but I would take them of only to spite AA).