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Fare War: LAX/SFO To JFK/BOS  
User currently offlineFlyboyaz From , joined Dec 1969, posts, RR:
Posted (11 years 2 months 1 week 2 days 15 hours ago) and read 3560 times:

Looking for some opinions on how you think the big 3 (AA, UA, DL) will handle having to match HP's fares on their new nonstop transcontinental flights.

Looking at availability the nonstop fare from LAX-JFK, one way on 10/25...the day before HP starts their service... is $929 on all three airlines. From then on they are matching (or pretty close) HP's one way fare of $314. That's a big decrease!

Assuming the HP flights will last....can the big 3 manage to take that much of a cut on the revenue from flights I would consider to be pretty much the bread n' butter of their domestic service?

I see that AA is still flying nonstop from JFK-LGB...but LAX is a whole different story!

19 replies: All unread, jump to last
 
User currently offlineDesertJets From United States of America, joined Feb 2000, 7811 posts, RR: 16
Reply 1, posted (11 years 2 months 1 week 2 days 14 hours ago) and read 3499 times:

With just 2 flights a day in each direction you'd think that the big 3 shouldn't worry. But looking at advance purchase business/first class fares they start at a low of ~ $1200 before America West starts non-stop service, and drop to ~$820 after HP starts flying non-stop between LAX and JFK. Granted only 2 A319s a day is small potatoes compared to 6-7 767-200s that American and United are running, especially counting premium seats... the impact can be seen. Plus America West is offering some really nice offers too. Fly two roundtrips on the new coast-to-coast nonstops and you get Silver elite status for 2004.


Stop drop and roll will not save you in hell. --- seen on a church marque in rural Virginia
User currently offlineAndersjt From United States of America, joined Jul 2003, 390 posts, RR: 1
Reply 2, posted (11 years 2 months 1 week 2 days 13 hours ago) and read 3444 times:

A benefit from the fare war may to be generate interest in getting flyers to travel that otherwise would not. If so, then all should benefit by filling seats that might go empty. JetBlue and American will see traffic drop off out of LGB now that LAX has a cheaper alternative.


Oh how I long for the day when the skies were truly Friendly!
User currently offlinePROSA From United States of America, joined Oct 2001, 5644 posts, RR: 4
Reply 3, posted (11 years 2 months 1 week 2 days 13 hours ago) and read 3394 times:

JetBlue and American will see traffic drop off out of LGB now that LAX has a cheaper alternative.

Price isn't the only factor. I flew JFK-LAX on AA in 2001 and JFK-LBG on B6 in 2002. Without question, I'd use LGB again unless it were significantly more expensive than flying into LAX. LGB is ultra-convenient and uncrowded, totally unlike the madhouse at LAX. The rental cars are about a three-minute walk from the gates, no slow shuttle buses required as at LAX!



"Let me think about it" = the coward's way of saying "no"
User currently offlineLeskova From Germany, joined Oct 2003, 6075 posts, RR: 70
Reply 4, posted (11 years 2 months 1 week 2 days 13 hours ago) and read 3359 times:

Doesn't this smell just a bit like predatory pricing? I remember that (I think) AA had to get through some legal proceedings concerning behavior like that a while back, but I guess since HP is already a well established airline and generally not a "new entrant" (with the obvious exception of this routing), the big ones will probably not have to fear any problems resulting from this, or will they?

I mean, reducing the fare from $900 to $300 is a little more than what can be explained by pure "goodwill" or wanting to get some new customers...



Smile - it confuses people!
User currently offlineATA767 From United States of America, joined Jul 2003, 419 posts, RR: 1
Reply 5, posted (11 years 2 months 1 week 2 days 12 hours ago) and read 3307 times:

From the looks of things both UA and CO has had to drop there fare on the EWR-SFO routes and ATA is still the cheapest non-stop on that route. These LCC are really going to force fares down and not sure the big boys will be able to counter easily.

User currently offlineFlyboy7974 From United States of America, joined Jan 2003, 1540 posts, RR: 2
Reply 6, posted (11 years 2 months 1 week 2 days 12 hours ago) and read 3304 times:

just checked on line and i received an email from america west that the fare one way is down to $99, but that's probably without taxes and airport fees

User currently offlineFlyboyaz From , joined Dec 1969, posts, RR:
Reply 7, posted (11 years 2 months 1 week 2 days 11 hours ago) and read 3258 times:

The $99 is a special that according to our website expires today! Cheap, cheap, cheap fares!!

User currently offlineAAR90 From United States of America, joined Jan 2000, 3494 posts, RR: 46
Reply 8, posted (11 years 2 months 1 week 2 days 10 hours ago) and read 3220 times:

Doesn't this smell just a bit like predatory pricing?

Nope.

I remember that (I think) AA had to get through some legal proceedings concerning behavior like that a while back,

Correct, AA won on all counts.

...but I guess since HP is already a well established airline and generally not a "new entrant" (with the obvious exception of this routing), the big ones will probably not have to fear any problems resulting from this, or will they?

The "predatory pricing" issue is not a factor when a company responds to a competitor's pricing by matching that price. If a company is proactive (action prior to competitor's entry) or beats a competitor's price then market monopoly position and possible preditory activity will become a consideration. Until then the courts have consistently maintained that it is not illegal to react by matching a competitor's actions.





*NO CARRIER* -- A Naval Aviator's worst nightmare!
User currently offlineAA777MIA From United States of America, joined Aug 2003, 686 posts, RR: 3
Reply 9, posted (11 years 2 months 1 week 2 days 9 hours ago) and read 3181 times:

Predatory pricing...

Put the shoe on the other foot, for an airline to come in and UNDERCUT everyone else, isn't that predatory pricing? I call it competetion! May the best bird win...


User currently offlineATA767 From United States of America, joined Jul 2003, 419 posts, RR: 1
Reply 10, posted (11 years 2 months 1 week 2 days 7 hours ago) and read 3119 times:

It actually works well for the consumer in the beginning. I thing that after time and demand levels off the price will rise for both the established and the new entrant. Certain routes never make it even without competition. ATA dropped SFO-PIE after 6 months or so because the demand and yield was not there. The demand will always be Strong on a SFO-JFK/LAX so in the end all parties will benefit.

User currently offlineFlyboyaz From , joined Dec 1969, posts, RR:
Reply 11, posted (11 years 2 months 1 week 2 days 7 hours ago) and read 3098 times:

Well the intent of introducing the service was not to put anyone out of business. It was simply to give our passengers an easier way to get to where they want to go!

I was bored at work one day and decided to check the number of our passengers travelling between LAX and JFK....with either connections in PHX or LAS. Just in 1 day we had almost 130 passengers...that was probably their reasoning for putting in the nonstops and to perhaps attract more passengers that might use SNA, BUR, LGB, etc. It also eases up the loads on the PHX and LAS flights and lets more people get on them going elsewhere. We no longer use RJ's out of LAX so the point to point service to PHX is gone. Only the flights bound for connecting banks are left.


User currently offlineJetdeltamsy From United States of America, joined Nov 2000, 2987 posts, RR: 7
Reply 12, posted (11 years 2 months 1 week 2 days 5 hours ago) and read 3045 times:

it depends on how much market share hp pulls. i think there's a good chance fares will fall on the big 3.


Tired of airline bankruptcies....EA/PA/TW and finally DL.
User currently offlineMX340LOV From Mexico, joined Oct 2003, 39 posts, RR: 0
Reply 13, posted (11 years 2 months 1 week 2 days 4 hours ago) and read 3024 times:

Ladies and gentleman, what we have here is an oligopoly-like behavior, caused because AA, DL and UA were a de-facto oligopoly in those non-stop segments and they like that and it shows.

I would love to say that the people runign those companies are SOBs, abusing a semi-captive market, but since I am in a good mood today I´ll just thank the free market and deregulation.

Best to all!
F


User currently offlineLeskova From Germany, joined Oct 2003, 6075 posts, RR: 70
Reply 14, posted (11 years 2 months 1 week 2 days 3 hours ago) and read 2990 times:

You're right - it's not predatory pricing, although I think that the question whether an airline is reacting or being proactive is not the right way to decide.

To perhaps prove my point, this is a situation that we had here in Germany: LH runs somewhere between 14 and 18 round trips between FRA and MUC daily, and they have a monopoly on that route. A while back, DBA introduced flights on that route and they were a lot cheaper than LH, but only had 5 or 6 round trips per day.

The reaction by LH was that they undercut DBAs fares, if only by a single Euro per ticket - and put massive capacity on the route, flying 744s and 342/343s occasionally, obviously making the lowest fares much more available.

It wasn't long before a court ordered LH to raise its fares above DBAs fares, so they increased them a bit, but retained the higher capacity.

And it didn't take long before DBA anounced that it was pulling the plug on the route - I think they flew that one for only 5 or 6 months.


In this case, LH was only reacting to DBAs fares, it was a decision that consumers profited immensly at first - but just to complete the story - the day after the last DBA flight operated on that route, LH went back to its original, much higher fares and to the lower capacity, even more reducing the availability of the lowest fares.

This is why I think that the reacting/proacting criteria is not the best to decide whether it's predatory or not - but in the case of these coast-to-coast routes it's not HP going against a single big airline, but several, and I'd say that this is the point that makes it non-predatory: even if HP should pull the route, there will still be competition between the other ones...



Smile - it confuses people!
User currently offlineBN747 From United States of America, joined Mar 2002, 5620 posts, RR: 51
Reply 15, posted (11 years 2 months 1 week 2 days 3 hours ago) and read 2977 times:

What??? No more HP RJs out of LAX? Say it ain't so!


BN747



"Home of the Brave, made by the Slaves..Land of the Free, if you look like me.." T. Jefferson
User currently offlineFlyboy7974 From United States of America, joined Jan 2003, 1540 posts, RR: 2
Reply 16, posted (11 years 2 months 1 week 2 days ago) and read 2935 times:

i am glad that somebody else here backs america west, flyboyaz, i fly america west, and only america west, as i am elite with them. thank god for companies like america west that after 9/11 stopped screwing over pax on routes, and offered affordable airfares for once. the airline is safe, the name has changed, and their reputation is much different than 3 or 4 years ago. if i were to fly coach, i would much rather fly hp than ua or aa from lax to any east coast market, because america west lately is making flying not only fun, but affordable again. i am flying from prc to lax the beginning of dec, yes, look at that route, 16 legs total, for under $300. not ua, not aa, but an airline that makes it easier. sorry flyboyaz that you have to put with all the troubles with express down in tus, but, someday, mainline will be back....

User currently offlineFlyboyaz From , joined Dec 1969, posts, RR:
Reply 17, posted (11 years 2 months 1 week 1 day 22 hours ago) and read 2902 times:

Thanks Flyboy1974.....we hope we get mainline back too someday. They are actually telling us that it might be in about another year when we get more planes. We simply do not have enough anymore to fly them to TUS, they would rather use them in markets where they can make more money...makes sense, though doesn't make us happy!

I'm glad you have good experiences with us.....it is fun to fly us now and I always look forward to nonreving....actually with my discount I can buy a confirmed ticket on the new routes for only $169 with tax! Might have to take advantage of that!

Thank you again for your support....and everyone else's for that matter!


User currently offlinePe@rson From United Kingdom, joined Jan 2001, 19259 posts, RR: 52
Reply 18, posted (11 years 2 months 1 week 1 day 22 hours ago) and read 2884 times:

You can get extremely cheap flights (with at least one stop enroute) from LAX to, say, JFK. Indeed, I have seen them at about £70-£90, mainly via ATL and sometimes Florida or via LAS and PHX.


"Everyone writing for the Telegraph knows that the way to grab eyeballs is with Ryanair and/or sex."
User currently offlineLGB Photos From , joined Dec 1969, posts, RR:
Reply 19, posted (11 years 2 months 1 week 1 day 15 hours ago) and read 2794 times:

overall the best way to go for cheap price is jetblue. no question about it and i highly doubt traffic on the jfk-lgb route will drop off.

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