CO 1E

Not that I am aware of.

Anglo Large Clawed Otter

You are largely preaching to the choir. I see your 80-100 PE seat assumed demand figure for certain routes, and am guessing that you would expect CO to use multiple aircraft to meet such PE demand (if it exists at those levels) on those routes. 80-100 PE seats on a single aircraft is a huge gamble, and not one I think CO would take (no carrier has that many PE seats on a single aircraft).

However, a Thompson Solutions type product may allow for maintaining present J capacity, whilst also adding a small (properly differentiated) PE cabin, like BD/VS/BA offer, and without a large drop in Y capacity.

Then again, CO has gone and made mystifying statements such as: they are considering PE, but don't want a three-cabin product. I don't see them abandoning J or Y altogether, so all I can say to that is:

Hartmann

I simply mentioned the seats because this thread reminded me of them, not because I think it's some big breakthrough.

Continental has stated that they don't want a "sub-fleet" but I think this may be a sleight of hand move. They are not blind to what is going on around them and they know that if UA somehow gets into a merger with them, they will already have a sub-fleet of planes with PE.

pbarnette

Oh, I agree that it may be a bit of a smokescreen, but I just don't see CO installing anything on the big birds that won't work on the 757. The 757 is the backbone of their TATL strategy. I just don't see how they could have it be significantly different from the 777 or 767 product. It makes the marketing too hard, particularly since they are using 757s to supplement frequency on some routes that see widebodies. You already see this problem on the NW forum, with their 757 routes. You'll see comments from folks who love that they can fly BDL-AMS, but then you will see people talk about why they would never take the 757 from BOS, because they can take the A330. Unfortunately for CO, it isn't their style to fly from places like BDL, and New Yorkers are likely harder to please.

If I wanted to bet on what the next CO BF might look like, I would probably pay attention to whatever BA's OpenSkies offers. They are promising 2x2 flat-beds in J, and rumor has it that they are using some of the seats pulled from the 747 overhaul. If this is true, then it means that the front/back setup works in a 757. As we already know it works in a 777 and a 767, it will be the one product proven to work across the entire CO long-haul fleet. The 787 remains a bit of an open question, but I would think a 2-3-2 layout could be done without trouble.

Lemurs

Given how wonderfully crappy the market, the economy, and the petroleum price point is doing today, I'm hoping someone will stop and admit that perhaps going all-out in a capital improvement plan (with unproven economics) with a softening economy, consolidation talks around the industry, and razor thin profit margins might be the BEST business decision you could make right now. It drives me slightly batty that people are knocking CO for being conservative when the marketplace demands conservative leadership to protect long term interests.

The airline industry has typically operated in boom-bust cycles that have caused crisis after crisis. During the boom times, they place massive orders of planes, upgrade service and infrastructure at breakneck speed, and take on debts so onerous that if the bubble bursts at wrong time, bankruptcy is sure to follow.

Since 2001 CO has managed to keep itself in or near the black pretty consistently, grown it's fleet, grown it's Int'l network, cut it's costs, share profits with its employees, and keep a high level of service delivery to it's customers resulting in record load factors. (83+% LF on mainline domestic suggests this "terrible Y is killing CO" is FT hyperbole extraordinare.) This is a major acomplishment that has put them in fairly good position heading into a very uncomfortable period for airlines.

Don't get me wrong, I'd love to have a full-flat J seat for the same price as the current one, 36" pitch, AVOD in every seat and the lavs, and a first class meal with top-shelf wines on every flight. I just know that it ain't going to happen without the money coming out of someone's pocket, or the company going under. It's not a simple zero-sum equation like some people talk about it.

J.Edward

^

CO 1E

EOS has a 2x2 layout that, while not involving rear-facing seats, is configured in staggered arrangement similar to that of BA's front-rear layout.

Anglo Large Clawed Otter

There are both short term and long term considerations to take into account. If CO thinks only about today's market conditions for a product refresh due in 2009, they need to consider whether that product will be competitive over its lifespan (perhaps 15 years or so). Making a decision based only on today's conditions to launch an inferior J product could put them at a serious competitive disadvantage for a very long time. The overall effect could be serious enough to completely undermine much of the goodwill CO managed to painstakingly build up amongst its high-yield customer base in the years after Lorenzo.

Lemurs

Oh let me make something clear that I didn't address in that first post: I do think CO needs to have a capital improvement plan in place, and needs to execute on it in the next few years to keep up with the marketplace. That much is definitely clear. Status-Quo for longer than 5 years will be a tremendous failure. BUT:

- I don't think they need to be agressive about it.
- I don't think they should over-extend their budget to do it if it means cutbacks in customer service or other soft-product areas.
- I don't think they need to be a first-mover until the financial underpinnings of the market allow for it. Service innovaters do NOT do well in recessions, and airlines are a service industry, period. Luxury goods are the first things to fall off, followed quickly by non-essential services. Luxury services are a bit of both.

pbarnette

The problem is that you are concerned about CO's long-term interest and conflating this with a passenger's long-term interest. CO will either thrive or fail, regardless of what any individual passenger chooses to do. And, provided that CO remains a company that sells its seats to the public, virtually all benefits that might arise from CO pursuing their own long-term interests will continue to accrue to all passengers. Similarly, any detrimental impacts from CO pursuing their long-term interest will accrue to all passengers.

So, since the individual passenger has no impact on the eventual outcome, and since they will share in the costs and benefits of that outcome, should that passenger care about CO's long-term health? I don't see how you can make a rational argument that they should.

Indeed, the only choice that a passenger has that will positively (or negatively) impact his utility is the short-term choice. My choice of an airline today doesn't give me a better experience tomorrow, so I have to choose the best experience today. If you want flat-beds, then simply put, flying a carrier that offers them today is your utility-maximizing choice. Same with 36" pitch, whereby flying B6 or UA E+ would be the utility-maximizing choice.

Now, this analysis might change depending upon whether CO eventually offers some long-term benefits for loyalty, but this will still have a finite value, and will likely have a relatively low net value for most people. Consider a case where CO offers lifetime Silver to million milers. Great, except that one would have to fly with some frequency to reap substantial benefits. And, given that this same frequency may qualify you for those same benefits, you may not any better off than you would have been had you chosen to fly elsewhere and then come back to CO.

ND Sol

As I stated in October 2006:

It was similar to the Thompson Solutions, except that the seats angled a little bit as opposed to facing straight ahead. I am sure that CO has considered something like this. Will CO choose something like this? One only hopes.

Lemurs

I was specifically not addressing what this means short-term to individual flyers though. Airline seats are essentially a commodity at the end of the day, though. While you're right the long-term planning can have a real effect on the long-term viability of your service and product, you're ability to successfully PLAY in a commodity market for an extended period of time is even more important. Putting in new seats that will drive airfares up at a time when the world economy is unsure (at best) could be the move that slits the throat of some airlines if demand falls off the table. I accept your argument, but it doesn't deal with the price question at all. All things being equal...which they never, ever are.

My argument has nothing to do with rational choices for customers, who will always vote with their wallets during an economic crisis. Basing your business model on a class of flyer that you believe to be more luxury-sensitive than price-senstive is putting your company in a hugely risky position because you're assuming that demand will never change enough to affect your bottom line. THAT is not rational. If we were having this discussion in 2000, the equation would be dramatically different.

bernardd

I think your mistake, and that of most of the US legacy carriers, is the assumption that airline seats are a commodity and that they're very price sensitive.

There is no other market in the world that's has these characteristics. Do people buy cars or cornflakes or hotel rooms or clothes or choose a restaurant based solely on price? Do they even buy gasoline solely on price? There answer is a very clear NO. CO's task is to understand its target market and build and deliver a 'product' that fits the market. The more they increae the buyers perception of the quality of the product, the higher average the price they can achieve for it. If CO decides it can be most profitable by targeting the Chervrolet rather than the Cadillac end of the market that's a legitimate business strategy, but if they're convinced they're truly in a commodity business they're probably doomed to failure

FWIW I believe they have already differentiated themselves a little, but they're actually pretty lousy at getting the message across, with the result that they're not leveraging their brand very well.