7E72004 From United States of America, joined Mar 2004, 3586 posts, RR: 1 Posted (9 years 3 weeks 6 days 22 hours ago) and read 1628 times:
I was wondering if foreign airlines are run differently than the us airlines. It seems to me that the foregin carriers such as ANA (to be able to order 50 7E7s) and other airlines are doing pretty good...what are they doing that the us carriers are not doing. I have never flown on a foreign carrier but when i go overseas this year i would like to fly one
The next generation of aircraft is just around the corner!
AA737-823 From United States of America, joined Mar 2000, 5340 posts, RR: 11 Reply 3, posted (9 years 3 weeks 6 days 22 hours ago) and read 1600 times:
Our carriers here have got themselves in a bind. We have an ENTIRELY different operating environment- we have to deal with AirTran, Southwest, Frontier, JetBlue, ATA, et al. The majors have to offer better service at a low price to compete with loco's. Unfortunately, that equation doesn't add up, and the majors have a VER LOW profit margin. So when times get bad, their world crumbles, while Southwest and Airtran keep raking in the dough.
IndustrialPate From , joined Dec 1969, posts, RR: Reply 5, posted (9 years 3 weeks 6 days 22 hours ago) and read 1579 times:
I'd expect somebody who lists their occupation as a lawyer to be higher-educated. Different airlines operate in different operating enviroments... fares within Asia are generally higher-yield (in fact, it often costs as much to fly JFK-SIN as it does NRT-SIN, even though one may connect via SIN)... there's little LCC compeition... even in Europe, LCC don't fly to premium airports like LCC do -- and when they do, fares are higher.
One can fly transcontinental within the USA for OW$79-$129 restricted. Try finding a similiar fare across a similar distance elsewhere in the world, keeping in mind economics.......
7E72004 From United States of America, joined Mar 2004, 3586 posts, RR: 1 Reply 6, posted (9 years 3 weeks 6 days 22 hours ago) and read 1551 times:
My occupation has nothing to do with airline economics...your comment is flawed. That is like asking a doctor who has never flown before to take control and fly a plane. Going to law school is not going to school to learn about airline economics or economics for that matter.
The next generation of aircraft is just around the corner!
ANA From United Kingdom, joined Feb 2004, 294 posts, RR: 1 Reply 8, posted (9 years 3 weeks 6 days 21 hours ago) and read 1500 times:
Well, non-unionised airlines don't have the same pressures put on them that the majors have on wage/pension/healthcare issues. Views of course vary on unionisation.
I think lo-cost has a lot to do with this issue. To a degree incumbent euro airlines have had the same issues as the US majors competing with the lo-cost market, which has lead to big changes in the way the large carriers, such as BA, now operate their short-haul fleet. But also lo-cost don't have long-haul operations, which are more price sensitive as well as suffering more from external fears (SARS/terror). The Asian market has only just seen serious lo-cost carriers emerging; expect a change in the price of 1 - 3 hr routes in south east Asia.
There are of course loads of other reasons the big us carriers have trouble which the lo-costs have minimized including
hub and spoke costs inc aircraft waiting on the ground
historical over-burdened head offices
higher crew costs
base op costs
high maintenance costs
all with downward pressureon prices - it goes on forever!
Iluv2pilot From United States of America, joined Apr 2004, 95 posts, RR: 0 Reply 9, posted (9 years 3 weeks 6 days 21 hours ago) and read 1463 times:
Airlines in Europe and Asia face the same LCC issue that we do here in the states. Asia is adding them almost monthly, and Europe has seen them grow the last few years. As ANA has stated there are a myriad of reasons that there are many reasons that some airlines are doing better, regardless of location.
I believe there is a perceptions here in the states that foreign airlines are doing better. In fact most of the flag carriers from Europe were subsidized and only recently have been privatized. Every carrier has face financial pressure and problems regarldess of what flag is on the tail.
Airbazar From United States of America, joined Sep 2003, 6879 posts, RR: 7 Reply 10, posted (9 years 3 weeks 6 days 21 hours ago) and read 1437 times:
It's simple: They have lower operating costs and higher yields. But this is painting the whole canvas with a wide brush. There are plenty of airlines around the World living on a day-to-day basis too.
Another difference is customer demand driven by culture. In the US all that matters really is price. People will put up with any kind of crap if the "price is right". Turn the TV on, you'll see people eating dog sh*t for a quick buck. What this does is it causes companies to slim down, lower their margins, and live on the edge. If the slightest thing goes wrong, they're toast.
In Asia, and to a lower extent Europe, service still matters. People expect good service. They can provide this service because of what I said above, lower operating costs and higher yields. They have a greater buffer zone to keep the company above water during bad times.
In short, companies respond to market forces. In some parts of the World people are willing to pay a bit more for service. Here we're not. It's as simple as that.
Richard28 From United Kingdom, joined Aug 2003, 1570 posts, RR: 6 Reply 11, posted (9 years 3 weeks 6 days 17 hours ago) and read 1304 times:
Airbazar, I think its simplistic to say price matters less in Europe.
Ryanair's famous 1p (plus tax) fares are very common, and are a headache for competing LCC's, let alone the majors.
LCC's are also not just a US thing, there are many LCC's in Europe - I can think of 6 in the UK alone - although I'm sure there are more.
The trick the US majors seem to be falling into, is to lower their ticket price, without proportionately reducing their cost base, whilst at the same time reducing customer service.
To compound things, some majors have then launched LCC's, with better on board service than the main product (IFE for example), the effect being promoting LCC's more, and harming their brand and bottom line.
I'd suggest that the BA tactic of reducing prices to a reasonable surplus above average LCC tickets, whilst still differentiating their service by offering food and drinks service, keeps the pax - indeed I understand that BA's euro operation is now in profit, after years of being subsidized by their longhaul ops.
BA also learnt the lesson of selling their LCC (Go) at an early stage, to concentrate on their core business.