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What Should The Majors Do?  
User currently offlineGr8slvrflt From United States of America, joined Jan 2002, 1608 posts, RR: 10
Posted (11 years 3 months 1 day 22 hours ago) and read 4010 times:

There are a lot of armchair quarterbacks on this forum (myself included) that have been quick to jump on the majors (cartels, legacies, whatever) at every turn. The basic problem is that these airlines have lost the ability to set fares at a level that covers their costs. So far they have reacted to this in numerous ways:

1. Reduced capacity by grounding older, less-efficient aircraft and canceling or delaying deliveries of new planes. Also, many have tried to increase daily utilization.

2. Reduced staff by massive layoffs, furloughs and voluntary leaves and by replacing people with computerized technology.

3. Further reduced labor costs by pay and benefit cuts and by outsourcing (often to third-world countries).

4. Reduced service levels by eliminating meals and/or charging for meals.

5. Entered new markets (US Airways build up in the Caribbean, for example).

6. Scrapped lower-cost divisions (United Shuttle, MetroJet, Delta Express) and launched new versions (Song, Starfish).

7. Greatly increased reliance on commuter affiliates.

8. Filed bankruptcy to facilitate the above.

So far, Continental seems to have changed it's business model the least but is still losing large sums of money. US Airways emerged from Chapter 11 quickly and much stronger but, again, is still losing a bundle. American, United, Delta and Northwest are still bleeding profusely despite huge cutbacks.

My question: If you were making the decisions for any of these carriers, what you do? I don't think standing pat is an option.




26 replies: All unread, showing first 25:
 
User currently offlineTxAgKuwait From United States of America, joined Aug 1999, 1803 posts, RR: 42
Reply 1, posted (11 years 3 months 1 day 22 hours ago) and read 3982 times:

Let's pretend I owned and was a benevolent dictator over at AA or UA. Or even pretend that the stockholders owned it, but I was running it partially for their benefit (instead of what has happened to the stockholders in most of the so-called major airlines):

1. Increase the number of flights. Nobody ever "really" shrunk themselves to long term prosperity. I would work on my utilization and try to raise the avg daily utilization, hence more flights. The marginal cost of adding capacity is almost nil...the marginal savings from eliminating flights is also very small.

2. Where would I put these flights? Duh. I'd put them where people wanted to fly, not necessarily where I have a hub. Yes, I would bust my hubs. Connecting dots between "out-stations" is a wonderful way to increase the workload placed upon your folks at the out-stations, and the more flights they handle during their 8 hr shift, the more efficient and productive they become.

3. How am I going to get people to ride my planes? I am not going to be stupid with my fare structure. Let's say I am Delta and I fly ATL-BNA. Instead of a walkup fare of $450 ea way for this 50 minute flight, I set my walk up fare at $ 100 and my advance purchase fare at $ 50. Oh nooooooooo, you'll lose money....you think. It's roughly 250 miles. 100 bucks gives me a 40 cent yield. 50 bucks give me a 20 cent yield. My ASM cost is a dime. So where have I lost money, assuming I carry some passengers? And if you have ever tried to drive I-75 N from Atlanta, a hundred bucks would be a bargain. I WOULD DO THIS WITH MY FARES SYSTEMWIDE, MARKET BY MARKET. And I would eschew the idea of taking advantage of people in markets where I have a monopoly. If you treat people right by not screwing them in a monopoly market, they will appreciate it and prefer your airline in a non-monopoly market.

4. Cancel all my orders for RJs./ If the commuter affiliate wants them, fine. But as the mainlne carrier, I do NOT need a plane with a 15 cent ASM cost.

5. Sell all the drink service carts as scrap metal. FAs can walk back and forth between passengers and the galley to conduct a beverage service.


User currently offlinePotomac From United States of America, joined Jul 2003, 713 posts, RR: 0
Reply 2, posted (11 years 3 months 1 day 21 hours ago) and read 3941 times:

again, its important to understand the difference between what a major should do vs. what they can do, as dictated by their operating model.

yes, it would be great for a major to revamp its fare structure to match that of the LCCs. the problem is that it just doesn't work like that - the majors' cost and operating structures are too complex to accomodate a simplified, low-cost fare structure to generate revenue. and yes, we all know that they dug their own hole on that one. but LCC fare structures work and work well bcs they compliment the simplicity of their service.


User currently offlineNWAA330 From United States of America, joined Jun 2003, 213 posts, RR: 1
Reply 3, posted (11 years 3 months 1 day 21 hours ago) and read 3918 times:

They could start by giving us more reason to fly them than "we fly to more places than LCC's do" Unless their completely clueless they must have noticed that their domestic products have been surpassed entirely. By not offering meals on most routes there is nothing to make a passenger pick a major carrier. Look at Jetblue, they have PTV's. Why the hell would anyone not pick Jetblue over any major on a competing route when they get a better product for less cash on the LCC. Fact: in the main cabin LCC's have equaled or surpassed major carriers in terms of product offered. Fact: Majors have downgraded their first class offerings to such an extent that no one is willing to pay for them anymore, its just not worth it and 90% of the people flying a domestic premium cabin are free elite upgrades. Fact: LCC's aren't flying dated, high maintenance aircraft anymore. WN, Airtran, F9, and Jetblue all have new planes on order (A320's, 717's, 737's) and operate well maintained and relatively young fleets. Tell me where is my incentive to pay 3 times as much so I can fly a DC-9 or MD-88? Its only going to get worse for the majors as the LCC's grow and invade their precious "smaller markets" where people have no choice but to fly them. Unless they give pax reasons to fly them fast were going to see far more mainline carriers follow UA right into Chapter 11. Bottom line: Stop cutting services to save costs, add services to make more. Costly gamble? Yes! But your heading towards bankruptcy anyway so you have to do something, and you have to do it fast.

NWAA330



To Fly is to Live.
User currently offlineJafa From United States of America, joined Aug 2003, 782 posts, RR: 4
Reply 4, posted (11 years 3 months 1 day 19 hours ago) and read 3854 times:

Dump excess capacity, by retiring older less efficient aircraft

Increase aircraft utilization by reducing turn times

Look into non hub markets that could make money

Adopt and promote self service technology-buying,changing tickets/checkin/ mileage program etc.

eliminate first class on domestic non-transcontinental flights

create a new domestic business class, using convertible coach class seats.
this way business class could be quickly sized according to that flight or market. (the middle seat would have a section in the seat back that folds down to create a large arm rest) this seat back would also have a place to hang a coat or jacket. A few extra inches on legroom would be provided in this section.

Meals would be served in business class for free and for sale in main cabin. Depending on the length on the flight. Beer and wine would be free in business class, cocktails for sale in all classes. No predeparture drinks except during delays on the ground.

Create a policy that we would never charge more than $349 for a single flight even at the last minute or more than $399 for trips involving a connection.

Install an advanced entertainment system on aircraft that fly longer trips, tv for free, pay for movies on demand.

Create a theme or gimmick that's clever. Like Africa, Asia, Tropical, customize the decor, uniforms, food and drinks to reflect this.

Of course some of this involves spending money, which most majors are trying to conserve right now.

Keep all drink and food carts

[Edited 2003-08-27 20:13:05]

User currently offlineYyz717 From Canada, joined Sep 2001, 16335 posts, RR: 56
Reply 5, posted (11 years 3 months 1 day 19 hours ago) and read 3839 times:

They need to emulate the LCC's asap.

Air travel is a commidity business. The spoils go to the low cost carrier. The majors must reduce costs to the level of the LCC's. Any service differentiation (meals etc) should be passed on the customer as a surcharge or fee (or pay as you go).




Panam, TWA, Ansett, Eastern.......AC next? Might be good for Canada.
User currently offlineL.1011 From United States of America, joined Aug 2001, 2209 posts, RR: 9
Reply 6, posted (11 years 3 months 1 day 19 hours ago) and read 3810 times:

Actually, most of the majors were profitable last quarter.
Operating Profit (loss), followed by net (in millions) SORTED BY ORPERATING PROFIT
Continental Airlines $238 $79
Delta Air Lines $196 $184
American Airlines $87 ($75)
US Airways $67 $13
Northwest Airlines ($73) $227
United Airlines ($431) ($623)





User currently offlineAirways6max From United States of America, joined Aug 2003, 494 posts, RR: 0
Reply 7, posted (11 years 3 months 1 day 18 hours ago) and read 3767 times:

Provide decent service and on-time flights. The other problem is that there are too few airlines--not enough competition. Before Deregulation in 1978, there were forty airlines in the United States. Today, there are just ten. More competition and more choices for the consumer are what's needed.

User currently offlineNWAA330 From United States of America, joined Jun 2003, 213 posts, RR: 1
Reply 8, posted (11 years 3 months 1 day 16 hours ago) and read 3728 times:

Airways6max,

I completely disagree. The exact opposite is needed. First and foremost consolidation is required to combat the industry's biggest problem: overcapacity. There is competition just not what it was in the 70's. Today airlines fight to shuttle passengers through their hubs, though this may not be conventional head to head competition its sufficient competition none the less.

NWAA330



To Fly is to Live.
User currently offlineGoingboeing From United States of America, joined Dec 1999, 4875 posts, RR: 16
Reply 9, posted (11 years 3 months 1 day 11 hours ago) and read 3690 times:

1. Implement value pricing - revenues will rise when you encourage travel, and it should put a stop to much of the ludicrious loss leader pricing that is going on. For example, I am flying MCI-ATL on Delta on 9/20 for $140 round trip. On the seat mapper, they show just 10 available seats. So I have to ask...why the hell are you charging a loss leader fare if the flight is damn near full 3 weeks out? Include first class in the value pricing mix. You want to encourage people to actually pay for the first class product, and not give upgrade privleges because some company's employee is sitting in your seat on a ticket that was purchased well in advance. If the company buys the employee a loss leader coach seat and the employee wants to fly first class, make him pay the difference between his fare and the "value" first class fare. It's the revenue's stupid - you offer the company a deal they can't refuse...if the employee doesn't like it, they can always quit, but it should be the employers place to provide perks for the job...not the airlines.

2. Here's one that won't be terribly popular, but then again, what is right isn't always easy to swallow ...drastically alter the frequent flyer programs. They cannot afford to give away product - free trips to Europe for flying around the USA on dirt cheap tickets - free upgrades to First class from a loss leader fare and the like. Limit mileage accruals based on the fare paid...21 day advance fare accrues mileage at 50%, 14 day at 75% and 7 day or less at full credit. Accrue any mileage from a "code share" partner at 50%. Accrue a paid first class fare at double. Increase mileage requirements for international travel. As bad as it seems, giving away product is not the way to improve your financial situation. As I said, an employer should be responsible for perks...not the airline. Loyalty programs were great when times were good, but with the "loyal" flyers flying on super cheap tickets, the airlines have to ask themselves "do we really need that kind of loyalty?".


User currently offlineCapt078 From United States of America, joined Jul 2003, 421 posts, RR: 1
Reply 10, posted (11 years 3 months 1 day 1 hour ago) and read 3640 times:

many of the above comments seem logical and should be considered. i also think that the ceo's of the major airlines should look at each other to learn some valuable lessons. for instance, of the major hub airlines, continental is certainly the best positioned, having lost the least amount of money relative to size, and currently realizing its highest load factors. airlines such as american and ual need to realize how important it is to maintain positive employee relations (as continental has done), among other things. likewise, everyone will be looking at delta to see how well their song unit does. similarly, us airways should look at alaska, to see how best to adapt itself into becoming a regional niche carrier (assuming that's the direction us airways is going). lastly, everyone (particularly the smaller majors) should be looking at america west to see how well their newly adopted pricing structure does.

while it is important that the major hub carriers try to adopt the best practices of the low cost carriers, it might be more practical that they adopt the best practices of their peers too.


User currently offlineAndersjt From United States of America, joined Jul 2003, 390 posts, RR: 1
Reply 11, posted (11 years 3 months 21 hours ago) and read 3593 times:

You will notice that all the majors will emulate each other to compete; however, there is one aspect of running any business successfully that the majors have a hard time with, especially United, American and Delta - consistency in the quality of service offered.

Here are some examples of my recent experiences that have me truly confused as to why this behavior continues when a business is fighting for survival (keep in mind that my last 3 flights have been in First Class, this is where my frame of reference lies):

1. Dirty aircraft interiors. Why is it, as a first class customer, I have to brush crumbs off the seat, or find used newspapers in the seat pocket? What is wrong with replacing used and worn in flight magazines with new ones. Please air out and clean the lavatories too.

2. Some in-flight staff are more attentive than others. In a regular business, employees are all judged by and rewarded, or disciplined by quality service standards. Imagine if a customer could count on consistent, high-quality attention from the in-flight staff on all flights? I know I would switch to an airline that I could count on a quality experience 90-95% of the time, rather than 60-70%. For me, I dread getting on a United flight with LAX based pursers. Why has that always been a disappointment for me, when ORD or DEN based seem to go above and beyond?

3. Finally, it is time to start giving things back that were taken away, especially for full fare paying first class passengers (the type of customer you want to win back). Meal service for example - I think economy passengers would not mind paying $10 for a nicely presented meal. The disappointment is not being able to get one when you expect it. Domestic first class would like to see the return to hot meals. How much more can that cost, over the cold sandwiches and salads that you now serve?

My point in all this is that the majors have to realize that there are little, low-cost items that have to be attended to in order to not disappoint. If word of mouth gets to me that American has their act together, and United continues to disappoint me, I will defect. United cannot afford to lose anyone. I think a return to some quality of service standards that were in place before de-regulation might be what the majors need, and I cannot think it would bankrupt them.

I'll close by copying other posts I have seen by saying this is my $.02.




Oh how I long for the day when the skies were truly Friendly!
User currently offlineStevenUhl777 From , joined Dec 1969, posts, RR:
Reply 12, posted (11 years 3 months 17 hours ago) and read 3558 times:

Jim:

I'd contact either Chris Bowers or John Tague...higher-ups in cust. service at UAL about F/C service and LAX-based pursers. There may even be a special department that oversees quality control in first class at United, who knows. That what you're describing above is just piss-poor....they need to find out about this and do something about it before its "too late". I expect stuff like that in coach, but F/C? I'd be pretty upset, too.

Good luck!


User currently offlinePVD757 From United States of America, joined Aug 2003, 3418 posts, RR: 16
Reply 13, posted (11 years 3 months 17 hours ago) and read 3530 times:

I believe that the majors still have a hangover like the rest of Wall Street had from the late 1990's. It seemed that no matter where a plane would fly, it made someone money. With less yield overall in the marketplace, airlines need to fly what makes money. It seems like the majors (exception WN) are trying to be an airline to go everywhere and do everything. It's not that everyone needs to be a LCC, they need to get back to being focused on their core business. Let WN, F9, and the others do their point to point leisure routes. If your niche is getting the most people to the Far East, that's where you start and build on that. The airlines are too spread out and they need to concentrate on the hubs THAT MAKE SENSE. If you are going to have a hub, you need to capitalize on that aspect as much as possible. That is their competitive advantage over a point to point carrier. In this marketplace, I believe an airline can reduce their costs in dealing with non-labor issues. Ex: if the alternative to losing a major carrier's hub versus lowering their landing fees, overhead, etc. I think the airport involved as well as the airline can sit down and find common ground. For all of you who think WN is going to rush in and fill the voids, you have not seen or heard any major movement with them in STL. If STL was so great, the two major carriers there would have found a way to make it work. Airlines like F9 and WN stick to a plan and that's why they succeed.

User currently offlineAndersjt From United States of America, joined Jul 2003, 390 posts, RR: 1
Reply 14, posted (11 years 3 months 16 hours ago) and read 3507 times:

Steven:

Thank you. In fact, I wrote to Mr. Bowers last summer of my complaint. In my letter I mentioned my upcoming 9/11/2002 trip taking me through DEN and ORD and back to LAX. While waiting at the Red Carpet Club in ORD, I got paged. I was surprised to be greeted by someone sent out from WHQ to welcome me and thank me for my business. That gesture went a long way, until I boarded the flight from ORD to LAX. The purser and most of the flight attendants were LAX based, and there seemed to be no desire to go beyond what they were required to do (see number 2 below for an example).

Here are examples of above and beyond:

1. DEN to IAD (6 out of 6 trips taken), the Denver based purser and flight attendant working in first finished the flights with hand written thank you notes to the United First passengers.

2. For flights without LAX pursers, short and long, I will receive a superb meal service that is attentive, not rushed (salads and appetizers first, entree next, and then dessert) and well thought out by offering coffee, after dinner drinks or water without my having to ask. Once on a long flight from IAD to LAX, with an LAX based purser, meal service (appetizers, entree, and dessert) was brought out on one tray. Once everyone was served, they begin the process of clearing trays. There was no offer of wine, nor was there an offer for coffee with dessert, I had to ask. For the remaining 4 hours of the flight, the purser and flight attendant working first sat and talked in the galley most of the time. Passengers were getting up to go the galley, or using their call buttons to get additional service. What has been disappointing is that this same lack of attentiveness is consistent with all flights that I have been on with LAX based pursers.

3. I have had ORD based pursers who will recognize me as having flown before whether it be a few days or months ago, and will remember what I had to drink!

4. My last trip was LAX to DEN, back in July. From LAX to DEN, again an LAX based crew, the attentiveness was the minimum required. The purser seemed more interested attending to and getting autographs from a couple of Hollywood VIP's sitting across from me. However, on the return from DEN to LAX, the purser was SFO based, and I didn't have to ask for a thing.

Anyway, I know this is not the thread for petty complaints, and I have experienced similar problems on Delta and American. The point of my posts is that the majors lose a lot of revenue by these kinds of mistakes. One mistake, and a high-fare paying business traveler can defect.

We can discuss how the majors need to models themselves after the LCC's, but with everyone copying each other, why would I want to choose one carrier over another? Eventually everyone will have PTV's in all classes, but I will choose that carrier that gives me a consistent, and quality experience (for what I am paying) on all flights. If I'm paying a low fare in economy, I don't expect a hand written thank you note, but I do expect that if I do have a good experience in economy one time, that I will have a good experience on my next flight. The high fare paying business traveler that the majors once relied on, and will need to rely on again, remember where they had a nice flight and will return.

As much as I hate to say it, much of Southwest's success is tied to the consistent quality of their in-flight service. There may not be a meal, nor a pre-assigned seat, but the passengers know not to expect those. What they are getting time and time again on Southwest is friendly and attentive in-flight service.



Oh how I long for the day when the skies were truly Friendly!
User currently offlineTxAgKuwait From United States of America, joined Aug 1999, 1803 posts, RR: 42
Reply 15, posted (11 years 3 months 11 hours ago) and read 3465 times:

Anders writes in, and I quote: >>"As much as I hate to say it, much of Southwest's success is tied to the consistent quality of their in-flight service. There may not be a meal, nor a pre-assigned seat, but the passengers know not to expect those. What they are getting time and time again on Southwest is friendly and attentive in-flight service."<<

Thank you.

That is what I have been saying for a long time, but nobody seems to be listening.

Meals? Nobody gives you a meal in Y anymore. Not from MIA to DFW, not from ATL to ELP at suppertime. No meal for you.

Everyone wants to think WN carries a lot of leisure point to point passengers. That is true. They also carry a lot of business point to point passengers. And connecting passengers of both ilks.

Here is the real deal. Last night I flew ELP-LBB with my son, had dinner with my sister and her kids, then continued on LBB-DAL.

LBB to DAL was 44 minutes in the air.

Right after take off the FA asked what we wanted to drink, I ordered a coke, my son had a sprite.

After I guzzled my coke and ate my 4 bags of peanuts (he didn't want his) I set my cup on the seat next to me.

The FA was prowling the aisle a few minutes later, picked up my glass, and said "are you through or would you like another coke?"

From ATL to ELP on a nonstop the other day, 3+ hrs, I got one soda and one bag of pretzels. My cup was sitting on the seat next to me. It was swept away by the FA picking up all service items maybe 10 minutes after the cart had been parked. When I suggested I might like a refill, I was told we didn;t have time.

We were still over an hour from landing in El Paso. You do the math.

What the majors OUGHT to do is put their FAs on Southwest, and tell them to emulate what they see when they get back to work.


User currently offlineEA CO AS From United States of America, joined Nov 2001, 13702 posts, RR: 61
Reply 16, posted (11 years 3 months 11 hours ago) and read 3461 times:
Support Airliners.net - become a First Class Member!

It's too bad that it would be collusion, since one MAJOR way of stemming the flow of red ink would be for all carriers to simultaneously discontinue their mileage programs.

Think of it...no more coddling freeloaders in First Class who used upgrades. No more free tickets anywhere. No more promotions for X number of miles, etc.

Not to mention the fact that they could suddenly be rid of the HUGE liabilities they carry; unused miles that are just sitting there.

And, the airlines wouldn't have to spend money trying to one-up each other with better incentives, or keeping their own customers from being wooed by other carriers' programs.

That money would be better spent in the SERVICE, where it belongs. And maybe, just maybe, their CASM would go down in the process.  Smile


(And for you Perry Mason wannabes out there, YES, the airlines own those miles, the programs, and can change or terminate them at any time with a reasonable, usually 60 days, notice)



"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan
User currently offlineSWAFA30 From , joined Dec 1969, posts, RR:
Reply 17, posted (11 years 3 months 10 hours ago) and read 3440 times:

In deference to my brethren at some of the other majors, I can't imagine trying to go to work and give 110% not knowing from one day to next if I was even going to have a job.


As an SWA F/A, I'm glad to hear that some of you have been well taken care of by of my fellow stews. There are over 7,000 of us out there, so I'm not so naive as to think that each and every one of us always gives our passengers a great inflight experience. I'll admit that by the end of a 4 day trip my patience is worn thin and my people skills are somewhat lacking. I have learned over the years that the difference comes from treating people like actual human beings. For the time being we have no PTVs, spacious wide-body jets or meal service so a friendly face is pretty much all we have to keep folks coming back.

On my last trip we were running over and hour late on a PM trip and I just wanted to be done. I was passing out peanuts and I handed this guy one package...he took it, asked me for more so I gave him one more package and continued on. On the way back to the galley he asked me for more peanuts and I stopped, rolled my eyes and gave him a few more packs. Passing out extra peanuts has always been one of my pet peeves often I end up picking up the extra, half-eaten packs that are left behind when I'm cleaning the plane after arrival. The guy saw the look of annoyance that crossed my face and apologized for being a bother. He explained that he had not had a chance to get a sandwich in the airport. Once I got back to my galley, I realized that this poor man was on a flight at 9 pm that was over an hour delayed, eating peanuts for dinner and I was giving him a hard time for asking for an extra pack we paid all of 1/15 of a cent for....and he was apologizing to me. I dug around in the cabinet and found a package of crackers from an earlier flight and offered them to this poor guy. My point is that my attitude changed completely when I took 2 seconds to put myself in this persons place.

Operating close to 2,700 flights a day, we're not going to make everybody happy but we get it right more often than not and I think people appreciate that we try.



User currently offlineStevenUhl777 From , joined Dec 1969, posts, RR:
Reply 18, posted (11 years 3 months 10 hours ago) and read 3419 times:

TxAgKuwait: Please clarify on not getting a meal in Y class....I was just in economy on UA last Saturday, and had a fairly decent hot meal. Perhaps only on transcons.?

EA CO AS: I'd say you're on target there...but unless each major network carrier CEO secretly meets in a concrete bunker someplace, it will never happen. The airlines who started sure got themselves into a fine mess, because FF mile plans are now an item people can't live without these days, right up there with cell phones and sliced bread. It has gotten way out of control, if you ask me! But, I'm guilty too....I'm using my miles to fly halfway to LHR next summer on UA!

For some reason, UA has a major problem in LAX! I'm usually one of the first to stand up for United , and I always fly them, but can't say I'll be in a big hurry to do so in/out of LAX anytime soon. Ignoring f/c passengers! I can't imagine, but sadly, true. Break/lunch is one thing, but geez....

While I certainly expect a consistent level of quality service when I fly, I have to admit I am very sympathetic to ALL the employees of ALL major airlines...morale is very low across the board, regardless of whether their airline is in Ch. 11 or not. In many cases, they've taken big pay cuts they couldn't afford to or are being pressured to do so. Yet every day they have to go above and beyond 110% of the time just to keep the airline going and customers to keep coming back. Not knowing the future of the company or their job at all times has got to be a huge morale killer...I know a 17-year F/A vet from AA, and she can't take it anymore, in fact, I think she just threw in the towel and has moved on to a different part of her life now. I was just in Boston this past Saturday, and asked one of the UA customer service agents which gate UA175 left from on 9/11, figuring there was a plaque there (there's actually a US flag flying above C19 at BOS). He later came up to me and asked if I knew anyone on the plane, which I didn't. Turns out he worked that flight that fateful morning, and his roommate/best friend was on the flight...he was nearly in tears. Can you imagine having to go back to that same gate to work after that? I used to want to be a pilot or work for an airline, but not anymore...not these days.



User currently offlineArtsyman From United States of America, joined Feb 2001, 4745 posts, RR: 34
Reply 19, posted (11 years 3 months 8 hours ago) and read 3385 times:

Meals? Nobody gives you a meal in Y anymore
********************

Continental does, and in truth, most of the things that have been mentioned above don't apply to them either. They offer a good service, seem to be more consistent than the other majors, and as mentioned still give you a meal in Y on more or less every flight.

Lastly, there is always this referal to the fact that the first class cabin being filled by mileage upgrades, or oh, they are just miles. These guys are paying good money for their coach seat, this gets them the upgradeable ticket, and even though they didn't pay the max fare, they paid a lot more than the bargain fare.

These customers are loved at Continental, mileage or not and they are not taken for granted


User currently offlineLoneStarMike From United States of America, joined Jul 2000, 3859 posts, RR: 34
Reply 20, posted (11 years 2 months 4 weeks 1 day 22 hours ago) and read 3349 times:

You make good points, goingboeing.

You want to encourage people to actually pay for the first class product, and not give upgrade privleges because some company's employee is sitting in your seat on a ticket that was purchased well in advance. If the company buys the employee a loss leader coach seat and the employee wants to fly first class, make him pay the difference between his fare and the "value" first class fare. It's the revenue's stupid - you offer the company a deal they can't refuse...if the employee doesn't like it, they can always quit, but it should be the employers place to provide perks for the job...not the airlines.

Exactly. And while we're at it, there's just too much elitism at the majors, IMHO. Why should these people have to have a special check in line? Why should these people get to board first? I know the standard answer is "Because they're spending more money per year with the airline than the once or twice a year leisure traveler."

I say so what? If I'm in the checkout line at the supermarket and I've got about $40.00 worth of groceries in my cart, should the mother of four with her cart filled with $200.00 worth of groceries behind me be allowed to go ahead of me or have a special check out lane? Or maybe she should just have a special lounge that she can go to and after they've rung up the groceries, loaded up her car and driven it over to the front entrance, they can tell her what the total is, she can write the check and be on her way.

Oh but the rest of you poor slobs with less than $100.00 worth of groceries in your carts can just wait your turn in line and take your own groceries out to your own car and load them yourself and PLEASE BRING THE CART BACK when you're done!  Smile

And in her cart, amongst the groceries she has 6 boxes of generic store-brand Macaroni and Cheese that was on sale at 50 cents each. But, hey, since she's such a good customer, and shops frequently and spends a lot of money in the store, let's "upgrade" those boxes of macaroni and cheese to Kraft Velveeta Shell Macaroni and Cheese that retail for $1.89 without charging her the difference.

I guess the point I'm trying to make is sure, the frequent flier business traveler spends more money, but he gets more "travel", just like the woman at the grocery store who spends more money gets more food. The grocery stores don't give their "best customers" elite "priveleges."

2. Here's one that won't be terribly popular, but then again, what is right isn't always easy to swallow ...drastically alter the frequent flyer programs. They cannot afford to give away product - free trips to Europe for flying around the USA on dirt cheap tickets - free upgrades to First class from a loss leader fare and the like.

Limit mileage accruals based on the fare paid...21 day advance fare accrues mileage at 50%, 14 day at 75% and 7 day or less at full credit. Accrue any mileage from a "code share" partner at 50%. Accrue a paid first class fare at double.

I agree with you in theory, but then again I wouldn't be happy if Southwest did that. I just booked an AUS-DAL-AUS roundtrip for $77.00 all taxes included. That's less than the one way walkup fare for that route. Should I only get 2 credits instead of 4? If I had to be honest, I'd say yes, but I sure wouldn't like it  Sad

LoneStarMike

User currently offlineAndersjt From United States of America, joined Jul 2003, 390 posts, RR: 1
Reply 21, posted (11 years 2 months 4 weeks 1 day 20 hours ago) and read 3337 times:

There are a couple of points posted that are bothering me:

1. The concept of "value pricing," paying for what you are getting, eliminating loss-leader fares. Under the yield management systems used by the majors, pricing is based on the demand for city pairs, and not on making each seat profitable point to point. Someone posted the example of a discounted fare MCO to ATL of $140.00. Granted, that seat may be at a loss. What is counted on under yield management is getting a high fare for MCO to MSY, or MCO to BNA. Both those city pairs may route you on the same flight through ATL, but the demand for those two city pairs may mean the airline can charge as much as $600.00 or more. The airline is then getting a higher fare for both seats on both segments. With your loss leader seat, and the revenue from the other passenger going beyond ATL, the airline still comes out ahead. Additionally, those "loss leaders" are cash in the pocket now for the airline, and they are guaranteed revenue.

2. The same post asked why sell "loss leaders" when the flight is showing full? The seat mapper example in the MCO-ATL post states that $140.00 fare showed only 10 seats available and the rest of the flight full. That doesn't necessarily mean the fight is full, the seat mapper is limiting the choice based on the lower fare. This keeps more desirable seats open for elite passengers, or those selecting a higher fare (refundable, no Saturday night stay). When I use United.com's seat mapper, the choice of seats changes dramatically when I log on with my Premier Mileage Plus number.

3. Another post suggested that airline seats should be marketed as a commodity such as buying groceries at the supermarket. First, even supermarkets now have loyalty programs offering discounts to those belonging to their "shoppers clubs." Secondly, everyone going shopping for groceries knows what to expect in terms of service. Airline travel, no matter how it is presented, or priced, will not be considered a commodity by a majority of the traveling public. Knowing that there can be some additional level attention, or service, I will choose to travel more frequently, than if it became an experience like going to the supermarket. I need to go to the supermarket to eat, I do not necessarily have to travel.

4. If frequent flyer programs, and the privileges that come with them are eliminated, how do the majors develop customer loyalty? These frequent flier programs mean that their customer is going to choose their airline when making travel decisions. If you keep rewarding your loyal customers with little, low-cost, privileges such as dedicated check-in lines they will come back more often for business and leisure. For those that may consider this "elitism," there are the LCC's.

5. Value pricing for first class has been tried by both America West and United and didn't work as expected. In fact, I've noticed UA has reduced the amount of discounted first ("A" fare) seats available. It may be that they weren't selling them, or their premier customers were angry about losing out on upgrades. The majors hope to sell the higher fare first class seats to those that can afford them, but what better way to reward your loyal customers than a chance for an upgrade.

6. For a company to tell their employees they have to fly coach, or Southwest or quit - sorry that doesn't always work. As an example, there is a lot of travel for studios here out of LAX for location shooting. I do not think a studio is going to tell a valued writer, director, or actor that they have to fly coach.

The frequent flyer miles are an additional reward for those employees when their job requires they be away from their home or family. Employees may have limited expense accounts, but those FF miles belong to them and cannot be taken away. Businesses that need employees to travel will also book them on an airline that rewards their employees at no cost to them.

7. The liability of accrued FF miles on the Balance Sheet is not such a bad thing. This is a liability that the airline can control. There will not be a sudden run by customers to use their miles unless the airline allows it. United has had a sudden rush by their customers to use miles, and to their credit they have not restricted available seats that much. Yes, those seats going out are not profitable, but the cost would be far greater if they lost that customer forever. When those miles are used, they do generate non-cash revenue for the airline.

8. Rewarding miles based on the fare paid. For the majors, that is already in place, with F passengers getting fare bonuses. The idea of rewarding bonuses is a better marketing tool, than taking something away from those who pay discounted fares.


The way the majors operate is a sophisticated, and fascinating system of marketing, technology and finance. Their capacities are designed to have seats available for any type of passenger whether it be discount leisure, business traveler who has to be there, or the "elitist" "capitalist" first class passenger. Yield management means optimizing the revenue stream from the demand generated across that spectrum. The LCC's cannot match that.

Some posts have used Continental as a shining example of customer service now which is true, but Continental has gotten to this point only after they made many mistakes and 2 trips through BK. Management and employees finally caught on that it is about the customer. United is re-learning that concept once again. I have seen some improvements in service, and I have seen some mistakes that I hope they will change. Layoffs have meant that there are only senior employees left who love their job and the product they offer. United Airlines on its own is a marketing powerhouse that can really take off when their house is in order. United management and employees need to value what they have and not make any more mistakes.





Oh how I long for the day when the skies were truly Friendly!
User currently offlineBeltwaybandit From United States of America, joined Mar 2003, 495 posts, RR: 0
Reply 22, posted (11 years 2 months 4 weeks 1 day 20 hours ago) and read 3302 times:

For the majors to emulate LCC model, they would have to file bankruptcy and either liquidate (which means their assets get dispersed and re-constituted) or implement a true zero-baseline restructuring where ALL the fat gets cut and ALL compensation is reset to entry-level, and ALL extraneous assets are dumped. This sort of draconian reorg seems to be impossible.

User currently offlineStarrion From United States of America, joined Jul 2003, 1128 posts, RR: 2
Reply 23, posted (11 years 2 months 4 weeks 1 day 20 hours ago) and read 3290 times:

As far as the FF miles go, if the majors dump those programs the business travelers will all be hunting the lowest fares rather than sticking to one carrier for the bulk of their travel. If there are no loyalty recognition programs there will be no loyalty. And given that the majors now have equal/worse service compared to the LCC's in coach, then ending the FF programs will force them to all restructure as LCC's.


Knowledge Replaces Fear
User currently offlineArtsyman From United States of America, joined Feb 2001, 4745 posts, RR: 34
Reply 24, posted (11 years 2 months 4 weeks 1 day 20 hours ago) and read 3269 times:

For the majors to emulate LCC model, they would have to file bankruptcy and either liquidate (which means their assets get dispersed and re-constituted) or implement a true zero-baseline restructuring where ALL the fat gets cut and ALL compensation is reset to entry-level
*************************

How would you feel at your job if you had your wages cut back to entry level after you put in 30 years of service ?. The LCC will face all this stuff down the road when repairs and wages start to catch up with them

Jeremy


25 Potomac : if there is a smiley face icon to show someone throwing up their arms in exasperation, please send it to me now. as andersjt touched on, the majors fa
26 Beltwaybandit : How would you feel at your job if you had your wages cut back to entry level after you put in 30 years of service ?. The LCC will face all this stuff
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