airzim

That's because it is true. I never said the internet created this commodity mentality, it only exacerbated it. Airline deregulation created the commodity model.

This isn't really up for debate. An airline seat is an airline seat, all other things being equal. Customer loyalty b/c of FFP programs and in flight entertainment are intangibles. Since the airlines have no way of differentiating their passengers at the time of booking request (all people have the same access to the same seat and fare at the same time), by definition they're just buying a seat. If the passenger factors in that they might get an upgrade, that might influence the decision process of the passenger, but the airline is still offering you the same fare as John Q Public. They can't/don't charge you more for the same seat because of your loyalty, and they can't take the risk of charging higher fares and losing that business to the competitor.

Yeah, about 80% of their business.

This clearly demonstrates that is exactly what they're doing. It doesn't matter what amenities you provide if the competition is providing virtually the same service. If the plane only have 8 F class seats (like most of the ORD-EWR flights), do you think any of those FFP's have any expectation that they're going to get an upgrade or a exit row seat or a bulkhead when they're repeatedly stuck in the middle seat down the back? Something is bringing them back to CO, and we know it wasn't the pressed ham sandwich.

Current and historical anecdotes prove otherwise. Ryanair is the perfect example.

TV's in seats (which is really the only product differentiator), is a marginal cost that entices people to chose airline A over B. And jetBlue and Virgin's customer base at this stage is highly discretionary.

Plus all you IROPs complainers, try getting rerouted when you're stuck in FLL on B6 and even WN. You are SOL.

Doesn't matter. CO is still running 80% LFs. The airlines must maximize the revenue per available floor space to make money. Ever flown EK in the back. Now that's misery.

But don't complain about 31' pitch and then buy another ticket on them. Go somewhere else. You've clearly moved on to B6. Good for you. So why are you still complaining about CO?

pbarnette

I've seen no evidence that this model is not the correct one, at least for a carrier the size of CO.

KD5MDK

You know, I've only flown CO once recently (and my flight was cancelled), and I can't say I felt like I would have been treated worse on B6 or WN. I have no status, but I was treated the same as my Platinum friend who was on the same cancelled flight.

sfogate

On B6, VX and WN, you can not be re-routed onto other carriers as these airlines do not have interline agreements with any airlines to transport their customers.

KD5MDK

Right. But CO didn't offer that to us either. Or really much of anything.

CopperSteve

Knock on wood, but I've only had a flight cancelled once due to IROPS. MCO-EWR, on CO, flying as a Plat. I was due to fly Friday PM. CO automatically rebooked me on the first flight Saturday AM and EUA'd me to F. When I arrived Saturday morning, the airport was a zoo with people stranded and trying to rebook. I can assure you: if you and I were there together, CO was treating me much better than you if you didn't have status.

TWA Fan 1

I'm not complaining about CO. I still fly them (4 flight segments this month alone).

However, if I look at what I am getting on CO vs. B6, VX or even WN, I can honestly say there is significantly less value in Y.

And it's not just seat pitch. It's a more comfortable seat, free IFE, at least one free checked bag.

CO always had a pretty poor hard product in Y. Now that they've devastated what remains of their excellent soft product they are proving their own point.

They are in the process of self-commoditizing themselves, of morphing into another version of US.

Yes, they are running 80% LF's, but they're still not making a profit, and their financial performance is lagging far behind that of B6 and WN (both carrier, by the way, have lower LF's).

I'm not sure if many people fly WN for the quality product, but I know that many seek out both B6 and VX for a far most pleasant journey in Y.

Removing all the remaining amenities and unbundling the product are designed to reduce cost and generate incremental revenue. But the fact is that most passengers will now be faced with one of the most spartan experiences in airline travel today.

For those who select airline travel purely on a commodity basis, by definition the lowest-yield customer, this model will fit perfectly. But for those who want just a little more legroom, or to watch TV for free, or check a free bag, they can just easily migrate to B6 or WN.

The point is that CO should at least provide a Y product that is somewhat competitive with the LCC's.

If not, it will be an inevitable race to the bottom of the barrel.

JC1120

I expect this to change in the long run. Both B6 and WN have benefits of being much younger airlines (less burdensome cost structure due to being for most of its life in the expansionary stage of the lifecycle) and especially in the case of WN, the extra-profitable fuel hedges that should be going away soon.

TWA Fan 1

In the case of B6 there might be a point about the youth of the carrier although I would suggest that the cost strudture is systemic, not based on the age of the carrier.

As far as WN, this is at least as much of a legacy carrier as the modern iteation of CAL. Let's not forget that CAL wiped away most of its legacy obligations under Frank Lorenzo, that a part of the airline started out as the LCC PeoplExpress, and that it went though bankruptcy twice, which further wiped away a significant portion of its legacy obligations.

Today, WN has the highest-paid pilots in the industry, among the highest yields. As far as the fuel hedges, this is an approach to purchasing fuel that is available to anyone, not just WN.

Their hedges have not always paid off either, but the long-term profitability of WN is not dependent on the hedges.

Mr.Nuke

Yes and no. While any airline could in theory hedge any amount they wanted, most of the legacies have capital limitations in this area. Hedging requires a fairly significant cash outlay. No one else is really in the financial position that Southwest is in to be able to afford hedging such a large position of their fuel needs.

transportbiz

If I am mistaken please forgive me, but didn't WN LOSE a ton of money on its hedging scheme? I thought I'd read something along those lines as oil came down from the stratosphere prices they were at.

sbm12

Yes, they did in the past couple years. Prior to that, however, they were enormously hedged and made huge profits from that position.

Mackieman

They were also one of the few domestic US airlines with enough cash to pull it off when it was profitable.