AMR-huge domestic fleet capacity reduction, $15 fee first checked bag... (consol)
May 21, 2008, 10:10 am
#151
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That's a good question, but yes, the fees will be paid at counters as far as I know - no different than overweight, oversized fees, but you are right - far more people will be paying for bags, increasing the number of transactions in general, compared to now, when only few people are just paying for overweight/oversized.
May 21, 2008, 10:10 am
#152
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Sorry, let me rephrase.
I am most bothered by those here who continue to want the perks they have enjoyed over the years, yet are blind to the fact that for a variety of reasons, Southwest's cost advantage is partially tied to the simple business model it has. You can't have your cake and eat it too.
Put another way, were Southwest to provide upgrades, premium cabins, international services, lounges, etc... all of which cost (and make) money for the legacies, I'm not necessarily sure that Southwest would be as successful.
Does this mean the legacy business model is broken? Perhaps - clearly at $130 a barrel, things need to change and fat needs to be trimmed. But I don't think we can blindly praise Southwest yet want everything that American or United provide to you as a customer, without letting go of some of the costly benefits of flying with a legacy.
I am most bothered by those here who continue to want the perks they have enjoyed over the years, yet are blind to the fact that for a variety of reasons, Southwest's cost advantage is partially tied to the simple business model it has. You can't have your cake and eat it too.
Put another way, were Southwest to provide upgrades, premium cabins, international services, lounges, etc... all of which cost (and make) money for the legacies, I'm not necessarily sure that Southwest would be as successful.
Does this mean the legacy business model is broken? Perhaps - clearly at $130 a barrel, things need to change and fat needs to be trimmed. But I don't think we can blindly praise Southwest yet want everything that American or United provide to you as a customer, without letting go of some of the costly benefits of flying with a legacy.
Here's a simple trial for the "full service" carriers:
Instead of giving away most of your first class or business class seats as upgrades to elite flyers, price them so that 90% of those seats upfront sell to revenue paying passengers.
If the airlines cannot sell those seats upfront for fares that are substantially below the current exorbitant fares now charged for those premium seats, then the "full service" carrier business model is irretrievably broken.
That of course leaves aside the chorus of whining that will emanate from elite flyers when they only achieve an upgrade to first class on 10% of their flights.
.
May 21, 2008, 10:11 am
#153
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DELETED
I misread the profile before asking another poster a question
I misread the profile before asking another poster a question
May 21, 2008, 10:11 am
#154
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Here's a simple trial for the "full service" carriers:
Instead of giving away most of your first class or business class seats as upgrades to elite flyers, price them so that 90% of those seats upfront sell to revenue paying passengers.
If the airlines cannot sell those seats upfront for fares that are substantially below the current exorbitant fares now charged for those premium seats, then the "full service" carrier business model is irretrievably broken.
That of course leaves aside the chorus of whining that will emanate from elite flyers when they only achieve an upgrade to first class on 10% of their flights.
.
Instead of giving away most of your first class or business class seats as upgrades to elite flyers, price them so that 90% of those seats upfront sell to revenue paying passengers.
If the airlines cannot sell those seats upfront for fares that are substantially below the current exorbitant fares now charged for those premium seats, then the "full service" carrier business model is irretrievably broken.
That of course leaves aside the chorus of whining that will emanate from elite flyers when they only achieve an upgrade to first class on 10% of their flights.
.
May 21, 2008, 10:11 am
#155
Join Date: Mar 2006
Posts: 2,333
I suspect we aren't far away from an Aer Lingus model where you pay on-line to check-the bag or if you pay to check it at the airport you pay another extra fee. Also fees for talking to agents at the airport for check-in can't be that far off either. sigh.
May 21, 2008, 10:14 am
#156
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Here's a simple trial for the "full service" carriers:
Instead of giving away most of your first class or business class seats as upgrades to elite flyers, price them so that 90% of those seats upfront sell to revenue paying passengers.
If the airlines cannot sell those seats upfront for fares that are substantially below the current exorbitant fares now charged for those premium seats, then the "full service" carrier business model is irretrievably broken.
That of course leaves aside the chorus of whining that will emanate from elite flyers when they only achieve an upgrade to first class on 10% of their flights.
.
Instead of giving away most of your first class or business class seats as upgrades to elite flyers, price them so that 90% of those seats upfront sell to revenue paying passengers.
If the airlines cannot sell those seats upfront for fares that are substantially below the current exorbitant fares now charged for those premium seats, then the "full service" carrier business model is irretrievably broken.
That of course leaves aside the chorus of whining that will emanate from elite flyers when they only achieve an upgrade to first class on 10% of their flights.
.
I have long been a fan of primarily European routes where there are 42-day advance purchase restrictions on business class fares. These restrictions are fine for leisure travelers who are a bit more well-heeled, yet do not cannibalize higher-paying business traveler demand.
I don't see much of this happening in domestic markets, at least not with the same kind of structure.
So while I still believe there is value in the exorbitant pricing, particularly because corporate discounts are so steep these days, it would be great to offer a very segmented premium cabin fare in domestic markets too. Right now, the only discounted -UP fares usually require no advance purchase or only 7 days - IMHO, that eats into profitability as your core business travelers on contracts buy those too.
May 21, 2008, 10:15 am
#157
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I would pay $15 a flight extra just so the bathrooms onboard would smell better!
May 21, 2008, 10:16 am
#158
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I called my dear wife and we will now plan our 10 year anniversary trip to Europe, all on AA miles. Once my mileage account is drained, I shall join the folks at Southwest Airlines. I'm tired of the nickel and diming (along with truly HORRIBLE customer service) because these idiots cannot run a transportation business.
Watch them start charging $10 to fly you to the correct destination.
Goodbye legacy carriers.
Watch them start charging $10 to fly you to the correct destination.
Goodbye legacy carriers.
I did the same two years ago. First they leave the PVD market totally (not completely, but 3 eagle flights a day??? for a market that consistently had sold out flights!!), then they charge for everything. I tried WN and much to my surprise, I actually had better options and better experieince. My company liked it better because of the $$$. Adios AA, hello SWA.
As for European carriers, I will travel Air France or Lufthansa when needed. Their rate are consistently lower than AA on the same routes.
May 21, 2008, 10:16 am
#160
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May 21, 2008, 10:19 am
#161
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That won't really help - because if the price for the -UP fare (non-discounted) is still lower, there's nothing stopping the customer from buying it.
What I'm saying is have two distinct sets of fares aimed at leisure travelers and business travelers respectively.
Leisure: high advance purchase, restrictive change/cancel policies
Business: Little to no advance purchase, flexible change/cancel policies.
Oh wait, these already exist for coach fares.
I'm just saying it should also be the same for business and first.
What I'm saying is have two distinct sets of fares aimed at leisure travelers and business travelers respectively.
Leisure: high advance purchase, restrictive change/cancel policies
Business: Little to no advance purchase, flexible change/cancel policies.
Oh wait, these already exist for coach fares.
I'm just saying it should also be the same for business and first.
May 21, 2008, 10:21 am
#163
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May 21, 2008, 10:21 am
#164
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I'm very skeptical that the price of oil is going to go down, but I am also convinced we've hit a global Hubbert peak for oil production, and simple economics tells you when supply is constrained and demand is increasing, cost starts going through the roof (which is what we are seeing now). I don't see big huge new oil fields coming on line anytime soon, and places like the North Sea/North Slope are beginning to play out. Welcome to a future that's a lot like the past: more turboprops and more expensive air travel.
And yes, I can imagine this fee for all checked luggage is going to get implemented in a lot of places, just like the $25 fee for second checked bag was. I'm happy that I'm a fan of the Rick Steves style of travel (as light as possible), but it's going to make my flights on AA this July interesting.
And yes, I can imagine this fee for all checked luggage is going to get implemented in a lot of places, just like the $25 fee for second checked bag was. I'm happy that I'm a fan of the Rick Steves style of travel (as light as possible), but it's going to make my flights on AA this July interesting.
May 21, 2008, 10:23 am
#165
Join Date: Mar 2006
Posts: 2,333
No argument here. Sounds like a smart pricing move.
As for the -UP fares and contract customers - it sounds like the contracts need to establish a stronger disincentive for those customers from booking the cheaper -UP fares.
As for the -UP fares and contract customers - it sounds like the contracts need to establish a stronger disincentive for those customers from booking the cheaper -UP fares.