What will hapen if FA stike
Dec 16, 2004, 7:02 am
#31
Join Date: Nov 2004
Location: Los Angeles, CA; Philadelphia, PA
Programs: OZ Diamond
Posts: 6,134
SEA_Tigger--Thanks for the detailed analysis. Although I don't have any means of verifying the numbers you quoted, I doubt anyone would make them up to make a case here (even though some may not be entirely accurate).
Anyway, the bottom line for the "legacy" carriers is the current business models they use do not work whether it's the labor costs and/or other operational costs being too high. I guess if what SEA_Tigger quoted is correct, those who sit in the front of the cabin should foot their share of the bill if the back of plane can be profitable at the current fares (J/K). I know this whole issue it's not that easy, but I certainly don't mind to pay a fair amount for the services I receive. I just can't believe how anyone can make money flying passengers coast to coast for less than $200 each! Don't get me wrong. I think it's great for all consumers, but I will gladly pay $50-$100 more (which is what it was just a few years ago) if it means some profit for the carriers. With their extensive alliances and attractive FFP (even after numerous water-downs), the "legacy" carriers should have a big advantage over LCC's if their prices and services are comparable (not necessary matching them). Perhaps I am missing something, I just can't understand how some carriers continue to squeeze labor costs if the LCC can make money with higher labor costs.
LAX
PS: Thanks everyone for great info--I am learning something new every time I visit FT.
Anyway, the bottom line for the "legacy" carriers is the current business models they use do not work whether it's the labor costs and/or other operational costs being too high. I guess if what SEA_Tigger quoted is correct, those who sit in the front of the cabin should foot their share of the bill if the back of plane can be profitable at the current fares (J/K). I know this whole issue it's not that easy, but I certainly don't mind to pay a fair amount for the services I receive. I just can't believe how anyone can make money flying passengers coast to coast for less than $200 each! Don't get me wrong. I think it's great for all consumers, but I will gladly pay $50-$100 more (which is what it was just a few years ago) if it means some profit for the carriers. With their extensive alliances and attractive FFP (even after numerous water-downs), the "legacy" carriers should have a big advantage over LCC's if their prices and services are comparable (not necessary matching them). Perhaps I am missing something, I just can't understand how some carriers continue to squeeze labor costs if the LCC can make money with higher labor costs.
LAX
PS: Thanks everyone for great info--I am learning something new every time I visit FT.
Dec 16, 2004, 11:41 am
#32
Join Date: Aug 2002
Location: Gorham, Maine, USA
Programs: Delta Gold, UA Platinum
Posts: 193
The Big Six have higher costs because:
They fly less seats, thanks to First Class and Business Class.
Those First and Business Class seats often go out for the lower tiers of fares, so that exacerbates it even more. Replace those 12 First seats with 24 Economy and, even at the lowest fares, you doubled your revenue in that square footage of the plane.
They fly less seats, thanks to First Class and Business Class.
Those First and Business Class seats often go out for the lower tiers of fares, so that exacerbates it even more. Replace those 12 First seats with 24 Economy and, even at the lowest fares, you doubled your revenue in that square footage of the plane.
1. How often do these planes go out full, so that you could actually sell those extra 6 or 12 seats? 10-15% of the time at most. So your extra 6 to 12 seats of revenue is available 10-15% of the time at best.
2. First class seats can generate revenue. If priced reasonably, people will actually buy First Class Tickcets or pay $50 bucks to upgrade. This is especially true on long coast to coast flights. I'm sure you could find plenty of people who would pay an extra $50-$100 over Jet Blue to fly with a little more room for 5 hours each way.
3. First class upgrades give a competitive advantage. I personally can vouch for this one. It's why I avoid LUV but will fly AitTran. Airtran is a great example. If first class is such a horrible, money loosing product. Why does one of the 3 most succeseful LCC's have first class?? If First Class was a looser for AirTran, Joe Leonard would have dumped it long ago.
4. You can replcace 12 with 24, on US 737's and A319, 320'S? You must want to sell that extra row that I can't seem to fit in theses planes to Dwarves. So in my reality, you can add 6 seats to U domestic planes if you elimenated first class.