So are the discount airlines going to kill Delta?

[naunga]

^^^I agree with that. A $10 - $20 difference isn't that much. For me I usually choose the flight with the fewer connections or the better arrival time.

So let me ask you this, Delta is $45 more than AirTran. You have FF miles with Delta. Do you pay the extra $45 and fly with Delta?

Naunga

 

[stuckingfk]

[ QUOTE ]
So let me ask you this, Delta is $45 more than AirTran. You have FF miles with Delta. Do you pay the extra $45 and fly with Delta?

Naunga

[/ QUOTE ]

It all depends on the miles you get. If it is all on the east coast, go with Air Tran. That $45 saved each time flying with AirTran will mean enough money for another ticket without the hassles of booking award travel.

If you don't want to save the money, upgrade to first class on AirTran for a minimal charge.

 

[derg]

[ QUOTE ]
In order for DL to stay alive, they would have to charge a 15-40% premium over the LCC's.


[/ QUOTE ]

Umm, actually fares on routes where we have an LCC, we're actually the lower priced ticket.

 

[av8rmsu]

[ QUOTE ]
^^^I can argue that the airlines do provide a product. They provide a seat on a plane to a place.

[/ QUOTE ]

This is an intangible service. Not trying to hijack the thread or anything...just trying to use what my parents payed four years for me to get...a degree in marketing.

It seemed that in all of my policy and management classes this is all we talked about. College professors think SWA hung the moon. Operating costs, price per seat per mile, hub fees, etc...

Airline travel used to be a luxury for the "to do". Now you get a small seat, that allows you to wear the person on one side of you, and a smelly armpit from some trailer trash wearing a wife-beater on the other side of you. I always try to be presentable when I fly....Point of the Story is....these are different times and the "prestige" has left airline travel. The majors are going to have to get with the times or else go bankrupt. These low cost carriers market to both ends of the spectrum. The business traveler...and the NFL fan wanting to go see his team play for the weekend. People are willing to be "inconvenienced" for a hundred bucks.

People point fingers at so and so getting paid too much and so and so not working enough...la la la...get people flying again and we will all be happy

. These marketing departments and the government, yes the government because they have a lot to loose in this whole ordeal, need to prove to people that it is safe and fun to fly. I don't know how to do this, but a dip• kid planting boxcutters and bleach isn't helping anyone. If anything it is pushing the industry back a few notches. Yes I know the TSA is a joke, but the "uninformed" passengers see the fancy little machines and think they work miracles, even though the guy behind the "TV" is probably trying to beat the guy in the other terminal in a friendly match of online Spades.

Just my $.02

 

[TheWife]

It seems like what everyone is trying to do right now is decrease costs. Are the airlines doing that? I know that some companies don't want to hurt their employees income, but still want to provide the customers with good prices. So they do everything they can to reduce uneccesary expenses. One way my prior employer made a major reduction was by converting to a paperless system. (Yes, this was years ago.) That's just an example. I heard like 3 or 4 years ago that Delta reduced their meal expenses by something like $25K a year just be removing one pea from the meals. Well they can have all my peas if it gives them more room to take care of the employees and customers. Or are they already working on this?

 

[kellwolf]

SWA got rid of the annoying plastic boarding cards about a year ago and introduced the new boarding passes. Now the new scanners are starting to show up at gates (downside to this is that SWA might be reducing the number of Operations agents, and this has a few people concerned). Fuel prices were renegotiated and locked in. Now, all new 737-700s are being shipped WITH blended winglets for better range and fuel efficency. All of the older -700s will eventually be retrofitted. The 737-200s will be gone probably by the end of 2005, and last I heard management was still considering smaller jets.

Right now the focus is increased productivity. Fewer missed bags or misdirected bags=happier REPEAT customers as well as fewer baggage delivery charges.

 

[davetheflyer]

[ QUOTE ]

The two don't "compete" they do the same thing but they are not competitors. The sooner these mainlines figure this out the better off they'll be.



[/ QUOTE ]

I disagree. There are a limited number of passengers who want to go from Point A to Point B at Time X. Any company with planes on the desired route at the desired time is competing for them.

If you take routing out of the equation, there really aren't a lot of things to differentiate between airlines. Price is one and most of the others are customer service issues.

Now that business travelers are increasingly flying based on price and the LCCs are besting the big guys in customer satisfaction, all companies are going to have to start paying more attention to keeping customers happy if they want to keep the customer at all.

United's strategy for cutting costs included cutting capacity and reducing the number of flights to some cities and totally stopping service to others. I wonder how many customers that cost them.

 

[MedFlyer]

[ QUOTE ]
[ QUOTE ]
In order for DL to stay alive, they would have to charge a 15-40% premium over the LCC's.


[/ QUOTE ]

Umm, actually fares on routes where we have an LCC, we're actually the lower priced ticket.

[/ QUOTE ]

Which is exactly why DL is getting killed by the LCC's. You have a substantially higher cost structure, but people refuse to pay a premium for your product. Customer's will not subsidize your higher costs any longer.

In fact, in order for DL to get passengers to fly on DL, they have to undercut the LCC. It's a business model doomed to fail.

 

[naunga]

You're right companies are trying to cut costs...their costs.
Which as I'm sure your would understand doesn't necessarily translate into a low cost for the consumer. This can all be done in some very interesting ways, change the method of asset depreciation, use a different method of accounting for revenue etc., but none of that will really translate into a lower cost of goods sold which is what it costs the company to sell their product.

Delta (and others) have decided that the way to cut costs is to pay their employees less. Personally (as I've said) this is a bad idea. The employees are the interface point with the customer. If the gate agent is unhappy because she had to take a pay cut, she (or he for that matter) aren't going to come to work with the correct attitude to deal with a demanding customer.

I was thinking on this more last night and came to the conclusion that if someone came to me and said, "we're going to cut your pay in order to save the company". I would want to know exactly what they were going to do with the money they took from me, and I would also want to know at what point that money would be returned to me (be it a point in time or a specific goal). Then I would gladly agree to the paycut, because A) I would know that what the company was going to do with the money to drum up business and B) would know when I would be getting it back (and hopefully more). But just to come to me and say you're taking a paycut for the good of the company doesn't work.

Naunga

 

[naunga]

[ QUOTE ]
Right now the focus is increased productivity.

[/ QUOTE ]
This is what most companies need to be focusing on. Like that IBM commercial says...

Phil: "It's a magic cost cutting sword, but it's stuck."
Shrink: "Behold excalibur"
Phil: "What does it mean?"
Shrink: "Perhaps there are no more costs to cut, perhaps you need to be..."
Phil: "King Arthur?"
Shrink: "More productive"

Anyhow, companies need to get back to basics. Serve the customer better than you competitors, and give them a good value for their money.

Naunga

 

[tonyw]

No, the discounters won't kill anyone. If someone does fold, the discounters might be a factor, but there will be other problems that are factors as well.

Everyone says that the discounter's models are the way to go, but if we do that, we won't be able to provide this country with the air transport system we need. Period. Even Herb Kelleher said that.

 

[tonyw]

[ QUOTE ]
This may be true if the hub has competition. Advantage of flying out of a hub town ... Lots of direct flights. Disadvantage ... Very expensive flights.

[/ QUOTE ]

Most of my flying is done on UAL, and you're right, they often cost more. I don't care, though. I'd much rather fly non-stop from IAD to pretty much anywhere I need to get than worry about connecting flights and all that nonsense on other carriers.

It's much more important for me to get on one plane and get to my destination than it is to save $50 or $100 or whatever I save. Especially when it's a use it or lose it budget.

 

[tonyw]

[ QUOTE ]
Umm, actually fares on routes where we have an LCC, we're actually the lower priced ticket.

[/ QUOTE ]

Yeah, but Doug, the problem is, you are not making any money at that price and the LCC is eeking out a profit.

One thing that cracks me up is that people compare the network carriers and their wages to the likes of JetBlue. Well, seeing how JetBlue doesn't have any folks with 20 or 30 years of seniority yet, of course they've got lower wages.

 

[Swabby]

[ QUOTE ]
Let me ask this another way, I can fly Delta from CAK->ATL for $170 before taxes, or I can fly AirTran from CAK->ATL for $125. What does Delta give me for my extra $45 dollars?

[/ QUOTE ]

But is that extra $45/seat because of pilot pay. IOW, assume that both carriers flew the 717, how much more do the DAL pilots make than the Airtran pilots? Let's say the crew costs are an extra $200/hr. That equates to less than $2/ticket. You might pay that if you want access to a much larger market, greater frequency and frequent flier miles for that European vacation. Or maybe you don't, either way, that $45 differential is not due to pilot pay.

 

[naunga]

I absolutely agree.

Naunga

 

[derg]

Aww come on Swabby! That $2/ticket/passenger that the fare includes is KILLING the airline industry! Eek! Run!

Actually, I'd rather work for tips like a waiter or a cabby. I'd put six months in, disappear to the French Riviera for the rest of the year and more or less live like a professional golfer.

 

[davetheflyer]

[ QUOTE ]
Actually, I'd rather work for tips like a waiter or a cabby.

[/ QUOTE ]

Why is it that FAs get tips and pilots don't? Maybe if we put a tip jar outside the cockpit door.

How about getting a $5 per passenger flat fee instead of a salary? I'd probably make more that way.

 

[derg]

If I made $5/passenger, lemme go look at my last trip...

I'd have made $8,450 for a four day trip! And that's just at a 70% load factor! We were full on all of our legs except about 2 so I'd probably have made over $10,000 for one rotation.

 

[sigmanu499]

There are all kinds of ideas and solutions but I think what says it all, about whats really going on in the industry is when...AMR cries they are near BK and then the CEO takes a bonus.

Its not the pilots, FA, Mechs, A/C, low-fare carriers...its managment.
If managments takes a pay cut then you know that its bad.

 

[aloft]

Yes, it's management, and yes, it's the mainline pilot groups. The airline industry's wounds are entirely self-inflicted.

I read an article recently which attributed much of the price wars on the airlines' decision to cease paying commissions to travel agents. The article's argument was that when they were paid a commission based on the final ticket price, travel agents had incentive to book more expensive tickets. Now, with travelers paying travel agents a set fee (usu. in the $50-75 range), travel agents have incentive to find the lowest fare possible in order to retain clients. This one, airline management did to themselves. Talk about stepping over a dollar to pick up a dime.

The mainline pilot groups, on the other hand, blew it big time with the regional jet phenomenon. They should never have let a single jet be operated by anyone but a pilot on their seniority list. The "commuters" have always paid less, but the regional jet craze has to be the epitome of the "camel in the tent" parable. I read the posts of people like General Lee over at flightinfo, and they're all nuts if they think that existing scope clauses will stand over time. MUCH MORE mainline flying will be transferred to RJ operators before all is said and done. It's gonna happen. The only ones who will win this war will be airline management, and to a lesser extent, investors and the fare-paying public.