I think you're looking at this from a very narrow perspective. If you follow your argument then everyone would stay in Super8 motels and the 3 & 4 star Hotels would be out of business. Toyota wouldn't have its Lexus brand, and we'd be driving Honda's not Acuras. Kelloggs would no longer exist.

One of the mistakes I think the legacy industry has made which has locked it into what may prove to be a death spiral is to assume people just want the cheapest way from A to B. First, what people are we talking about? There's at least two groups on planes - those travelling for work and those travelling on vacation and/or visting friends and relatives.

I know that for work I want, and will pay for, different things than for leisure. Put simply early morning / late evening departures with impecable time keeping are important. I want to get on the plane in the morning, be offered some kind of breakfast that will keep be going until midday, have power for my PC, space to work and get any checked luggage delivered fast when I arrive. Returning I'm looking for a decent hot meal, a glass of wine and a generally more relaxing trip. But overall I want to arrive ready & refreshed for work and I'm willing to pay quite a premium over typical leisure trips.

For leisure I'm generally more willing to put up with some inconvenience to save money, and I prefer not to have to rush around to make 6 or 7am departures.

Now tell me how CO's coach fits those outlines? How do it's 31" cattle crates deliver me fresh and ready for work? OK, so they have a limited number of First class seats, but the premium on most carriers for a trip like AUS-SJC is far too high to justify. IMO what CO should have done is to offer about 1/3rd of their domestic services as a Business Class with (say) 34" seating, possibly 5 wide, and a real "professional" product. Maybe they should have looked at BA's concept of convertible seating and tried to make something that actually worked.

Then they should have mirrored this with a Premium Economy on long haul.

Then they have the chance to sell up everyone to another class, while offering a differentiated product the "delivers you ready to do business" - a totally different product for which Southwest isn't setting the price. If they got it right it would be aspirational - something you would be telling your neighbours and co-workers "I always fly Continental on business".

Instead of which CO are they're mired in a one size fits all race to the bottom, where the only differentiation they have to offer is flexibility, which they proceed to undermine with same day changes etc. And to add to it all, they undermined the domestic First class by giving it away.

It's a great concept. I don't think the large corporate contracts would ever pay for it. Working for a large Fortune 500 company, we've been downscaling our travel policy and so have most others. Travel is viewed as an expense and something to be minimized, not through a value proposition.

Why should CO go out on a limb offering a product that I would wager most large contracts would not support, since those departments are often run by the fondly termed "bean-counters"?

OK, let's look at LCCs then. CO has the following practices which are similar to those at major US-based LCCs:

1. Largely standardized fleet for mainline flying within North America (737s, ala WN);

2. Installing TV at every seat (ala B6); and

3. Selling same-day upgrades (ala FL).

So again, the question arises, what more do you want CO to copy with respect to the domestic aviation market (since that is the market we're referring to here)?

LK is correct in saying the domestic aviation market is broken, and has at least an arugable point in saying that some form of governmental involvement should be considered to repair it, as similar approaches have been done or will soon be done by various countries around the world to rehabilitate struggling domestic air services back to sustainable health.

The crazy thing is CO would be healthy if it's customers were paying for full Y tickets. My understanding is most of the big Corporate deals are based on discounts from Y, and it's that market CO has to win in - it can't win in deep discount coach against the WN's of this world without a radical overhaul.

I missed a key part of the explanation earlier - while I called it 'Business', you're right it has to be flexible coach prices and CO has to address the corporate policy stuff, partly through the naming, partly through selling the advantages, partly through less flexibility on the deep discount tickets, including restrictions on same day changes. There are still going to be some companies that insist on the absolute cheapest, but that's OK - focus is important - you can't win them all, but the goal is to get a bigger percentage of the non-discount coach travellers than the other legacies, and to build an image as a serious, professional operation that takes the best care of Business travellers. Frankly most frequent travellers know how to work Corporate travel policies and can find a "reason" why CO is the best choice.

FWIW I think this also makes more sense on longer sectors - it's hard to sell under 2 hours.

As much as I agree with your assesment of Kellner,you can not compare anyone to Lorenzo,the first one to destroy a once great airline,2 when you count Eastern ,and pave the way for the Stephen Wolf's and Leo Mullins of the airline world. I used to cringe when I'd hear some of my co workers call Kellner Larry Lorenzo. It took a long long time to get Frankie Smooth talk out of the airline biz for good,but not before he ruined thousands of lives.I would love to know the real reason why Bethune left CAL.

I guess you get what you pay for ...

Last Thursday I got a call from CO at about 10:00 AM informing that my 9:05 PM EWR-MCI flight (Flt. 2669) was cancelled and I was rebooked on a flight the next morning, meaning I would have needed to spend the night at EWR. So I called them up to see what we could do, for some silly reason I figured if a flight was cancelled 11 hours in advance it must be a mechanical or something. The flight was cancelled due to "weather". I find it pretty amazing that the CO system is stretched so thin that they needed to cancel a flight 11 hours in advance due to weather (it's not like either EWR or MCI were closed due to weather). C'est la vive, there's nothing else we can do and we book a room in EWR and head up there.

The next morning they switch our gate from the A concourse to C concourse, no big deal one would think. We get to our gate and about the time they should start boarding our 8:20 AM flight they announce the F/A is late and we should leave around 9:00 AM. Around 9:00 AM they announce the F/A is on the ground ... at A concourse of course. 20 minutes later she comes strolling up chatting to a GA walking with her.

Now I realize CO is a big organization with a lot of moving pieces, the employees are all like "the flight's only an hour late." The problem is many people on this flight are in fact 12 hours late since we were originally booked on the cancelled flight the night before. If they had any real sense of urgency on getting our flight out, they would have 1) not moved it to C concourse in the first place (or moved it back); or 2) sent a car over to pick up the F/A so she didn't have to go out of A concourse, get to the Air Train, take the Air Train to C concourse, re-clear security, and then stroll on down to our gate (she obviously wasn't in a hurry since I noticed she didn't even bother using the moving walkway as she chatted with a GA on her way to the gate).

Eventually we are ready to leave over an hour after our flight time, about 30 minutes of which was wasted because the F/A had to transfer from A to C. Well, I think you all can guess what happens now ... ATC delay, part (if not all) of which I have no doublt would likely be avoided if we weren't waiting on the F/A in the first place.

So, in the end I get home 13.5 hours late ... bravo CO.

Anyway, no wonder LK is whining that he needs the protection of regulation from competitors like WN. They're the morons who sold me a ticket for a completely unrealistic price then can't even bother efficiently delivering the services the ticket was for.