We can't raise ticket prices because people won't fly

Ask how many people on those flights started in ATL. It'll be a VERY, VERY small percentage. Most of those passengers originated in another city and changed planes in ATL. Makes no sense to fly from MEM-TUP on a Saab when you can drive it in under two hours, but the flight's almost always full. Why? Those people that live in TUP don't have direct flights to places like New York, Orlando or San Francisco.

TUP is a dump.

Carry on
 
Those routes aren't designed for O & D traffic, they're designed for connections. Someone trying to get from ORD to MCN, for example. Yes, the leg from ATL to MCN is very short, but ATL is just serving as the hub to make the connection. The passenger isn't actually only traveling that short distance.

I get that much. I just don't understand why they (the airlines) choose to make the first/last 80-90 miles of the journey in those cases, it would seem to me, the aircraft would be put to better use flying a higher demand route that is going to fill more seats. Not to mention the sunk costs of having to operate out of an airport like that.

It may be an inconvenience to some to not offer service all the way to Macon, but it looks like there's only one flight in and out of there every day anyway. Depending on when your flight comes into Atlanta, you could be waiting at the airport for a LONG time to make such a connection.

While we're on this topic, how many of those flights are turns opposed to a stop on a multi-stop flight? For a regional flying 'props, I can see it being a little more practical if it is "on the way" to someplace else anyway.
 
Ask how many people on those flights started in ATL. It'll be a VERY, VERY small percentage. Most of those passengers originated in another city and changed planes in ATL. Makes no sense to fly from MEM-TUP on a Saab when you can drive it in under two hours, but the flight's almost always full. Why? Those people that live in TUP don't have direct flights to places like New York, Orlando or San Francisco.

Yeah, but how many flights a day are they making? If they've got enough business travelers to warrant a flight or two, great. Most people (myself included) would probably just make the drive.

If there was really that much demand direct from that airport, or even another nearby regional airport, you would expect someone like Southwest to come swoop in.
 
:banghead:

That's exactly what Kellwolf is saying.

But the people who would not make the drive are the ones who are coming in from NYC, Chicago, or some other distant land, who would not make the drive from their originating city.

This whole debate about RJ's going into Macon from Atlanta won't matter much in a few months anyway. Some Caravan operator is ending up taking the routes, which is fine by most of us.
 
I might not know what I am talking about here...
I seems to me that less people are flying today than were a year ago... Am I wrong?

I suspect you are right. We should have some good figures on summer travel when 3rd quarter reports come out.

Revenue is only one side of a successful profitability program. The other being cost, it goes to say that the "old school" airlines really need to "learn" to control costs effectively. (In other words, reduce costs in ways that do not take value away from their service.) Sometimes the best ways of doing things aren't so obvious.... for example, I'm willing to bet that taking good care of your front-line employees (i.e. pilots) and providing incentives for cost efficiency pays off in the end.

Raising prices will likely cause a decrease in seats sold. (You can argue that "people will always need to fly" all you want. But alternatives exist. Families in L.A. will drive to Disneyland instead of fly to Orlando. More business meetings will take place in cyberspace. It has been happening for years.) How do you deal with excess capacity in a business with high fixed costs? In theory, selling those empty seats at any price above the marginal cost of production (probably a slippery number in the airline world) will contribute to paying for overhead. But now we're back into a price war...... and isn't that what go us into this mess in the first place?

Another way to deal with excess capacity is to reduce the number of seats.... something that is happening right now.

It's probably more complicated than most "arm-chair" managers make it out to be. But in the end I suspect the airlines that survive (in the absence of government intervention) will either 1) be able to offer something that no competitor can (be it a route, level of service, etc.) or 2) have a highly competitive cost structure. (Like I said earlier, this doesn't necessarily mean cutting pilot salaries. As fuel prices rise, labor costs seem less significant.)
 
:banghead:

That's exactly what Kellwolf is saying.

But the people who would not make the drive are the ones who are coming in from NYC, Chicago, or some other distant land, who would not make the drive from their originating city.

This whole debate about RJ's going into Macon from Atlanta won't matter much in a few months anyway. Some Caravan operator is ending up taking the routes, which is fine by most of us.

I guess so. But it just begs the question how an airline can afford to operate such a flight in any case? I just ran fares from Atlanta - Macon then Chicago to Macon via Atlanta. The difference was about a magnitude of $300 or so round trip. IMHO, it sounds like a case of an airline serving a city just for the sake of offering service because those fares are probably not realistically covering the cost of the flight. Not to mention that only one of the flights has less than a 1.5 hour layover.

I'm quite surprised that it took someone that long to offer a shuttle service like that. My cousin and I talked about doing something like that 6-7 years ago...just didn't have the money to make it work. Is ASA going to discontinue service there? I remember them having a maintenance facility there when I'd stop in on cross-country flights.
 
I get that much. I just don't understand why they (the airlines) choose to make the first/last 80-90 miles of the journey in those cases, it would seem to me, the aircraft would be put to better use flying a higher demand route that is going to fill more seats.

You'd be amazed at the profitability of some of these routes. One of the NWA's most profitable routes is the DTW-FNT route. It's about 12 minutes in the air, and you could drive it quicker than you could find a parking space at Detroit Metro, but passengers pay a pretty penny to connect to FNT instead of having to get off in DTW and do the drive.
 
You'd be amazed at the profitability of some of these routes. One of the NWA's most profitable routes is the DTW-FNT route. It's about 12 minutes in the air, and you could drive it quicker than you could find a parking space at Detroit Metro, but passengers pay a pretty penny to connect to FNT instead of having to get off in DTW and do the drive.

I did see the same thing on the ATL-MCN-ATL round trip, which was about $660 (I'll fly myself for that much, thank you very much!) but an ORD-ATL-MCN r/t was $320, though there were a couple of $700+ fares (probably peak times, I'd have to look again) scattered in there. Save one flight, the layovers would have convinced me to just rent a car or have someone pick me up. Since I imagine such a route exists primarily for connections as we have established and most people being cost-adverse, I just can't see how the route is profitable, unless operating an ATR is really a heck of a lot less than what I think it is.

I guess it just depends on where your priorities are.
 
Revenue is only one side of a successful profitability program. The other being cost, it goes to say that the "old school" airlines really need to "learn" to control costs effectively. (In other words, reduce costs in ways that do not take value away from their service.) Sometimes the best ways of doing things aren't so obvious.... for example, I'm willing to bet that taking good care of your front-line employees (i.e. pilots) and providing incentives for cost efficiency pays off in the end.

Couldn't have said this better!! Bean-counters don't ever get this concept though. Sales guys do, but they have very little say in management policy.


As for the rest of this thread, did everyone forget that the government subsidizes many of these flights?

Speaking of Macon...

http://www.usatoday.com/news/washington/2007-12-30-cheap-flights_N.htm?loc=interstitialskip


Check out how much they subsidize the Lewistown to Billings route!!
 
Bean-counters don't ever get this concept though. Sales guys do, but they have very little say in management policy.

Good financial managers (aka bean-counters) should be able to identify trends and solve problems. I suspect many of them do "get it", but are held down by an autocratic or possibly corrupt team of upper managers.
 
As an occasional passenger, mostly for vacations, I agree with the prior posting regarding budgeting the whole vacation.

That said: I HATE being nickeled and dimed to death. If the cost of the plane ticket is REALLY $450, then charge me $450.

But please, for the love of god, dont charge me $220 for the ticket, $50 for the fuel surcharge, $10 for the TSA fee, $60 for the taxes, $25 for my 1st bag, $50 for my second bag, $10 for chips, $5 for soda, $3 for use of the bathroom, $2 for the flight attendant forced smile (per smile), $15 for the window versus aisle seat, etc. etc.

Can you all imagine going to buy a set of wine glasses at wall mart that are advertised for $10, only to find out that there is a charge of $.50 extra for the cardboard box they came in, $.25 for the transport charge, $2 for a fuel surcharge, $1 for the use of a checkout person, $3 for use of the shopping cart and so on?!? You would likely go to traget instead where, perhaps their glasses cost $13, but at least they arent upcharging up the wazoo.
 
Barty, you also need to recall that the ATL-MCN line is an EAS route.

PCL_128, don't rack your brain anymore man. The yield manager defender was CF.
 
As a consumer, I'd rather just pay less and do without the "services."
I say let the airlines charge more. They have high costs which need to be covered, and if you can't afford it, there are alternative forms of transportation. Airline workers have some pretty demanding challenges to put with and deserve to be well compensated. These fair increases are very justified in my book, and lower fairs should have never been implemented in my book.
 
Sad is some of the of flights not listed. AirTran used to get funding from the city of Witchita for the ICT-ALT flights. They still might :(
 
So the airlines should charge more so they can: 1) offer more services, and 2) pay you more. As a consumer, I'd rather just pay less and do without the "services."

Thats ok. Your tax dollars are just going to bail out the airlines and pay for the food stamps for my FO's. This is as close as I get to caring what the consumer wants.
 
Sad is some of the of flights not listed. AirTran used to get funding from the city of Witchita for the ICT-ALT flights. They still might :(

I'm not sure about ICT, but there are other cities that still provide us with "incentives" for providing service. To see why, take a look at what happens when we leave a city. We're going to be leaving SAV soon, and I'll bet you that Delta jacks up the fare by at least 50% when we do. Happens like clockwork every single time we leave a market. As soon as we start a new market, Delta chops their fare in half to undercut us. As soon as we leave a market, they jack their fare back up, sometimes even higher than it was originally. This is why cities provide us with subsidies for service.
 
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