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Remember Southwest Two Fares Structure?  
User currently offlineJayDavis From United States of America, joined Jan 2001, 2000 posts, RR: 15
Posted (8 years 7 months 1 week 6 days 15 hours ago) and read 2290 times:

Back when I first started to fly them in the mid-70's from LBB to DAL they had Executive Class flights and Pleasure Class flights.

All the flights M-F from 6:00 a.m. (I think) to 6:59 p.m. were the Executive Class fares, from 7:00 p.m. and on, M-F, Pleasure Class fares. Then on the weekend, ALL flights were Pleasure Class fares.

Do you think an airline such as Southwest could still be profitable with just a two-fare type structure? Would it save man-hour costs in terms of filing all the differents fares to all the GDS services and their own website?

Just curious.

5 replies: All unread, jump to last
 
User currently offlineTxAgKuwait From United States of America, joined Aug 1999, 1803 posts, RR: 42
Reply 1, posted (8 years 7 months 1 week 6 days 12 hours ago) and read 2222 times:

Jay, I posted about this very topic on another bulletin board a week or so ago.

I'm a huge advocate of a two tier fare structure.

I think it is time to experiment with it again in the TX intrastate.

What it does is generate two separate and distinct markets. It also does utilization in short hauls a whole lot of good (flights go fuller later and Sat/Sun flights are packed).


User currently offlineDfwRevolution From United States of America, joined Jan 2010, 1001 posts, RR: 51
Reply 2, posted (8 years 7 months 1 week 6 days 12 hours ago) and read 2215 times:

Quoting JayDavis (Thread starter):
Do you think an airline such as Southwest could still be profitable with just a two-fare type structure?

WN could do a lot of things and still be profitable.. the question is, how profitable would they be?

I have little doubt that WN's yield management is more sophisticated and more efficent in 2006 than it was in 1976. So much is done electronically that I don't suppose man-hours stand in the way of precisely offering the right price for a seat.


User currently offlineDLKAPA From , joined Dec 1969, posts, RR:
Reply 3, posted (8 years 7 months 1 week 6 days 12 hours ago) and read 2199 times:

The only drawback of a two-tier system is that people paying the higher tier are going to expect a better product than those in the lower tier. How do you differentiate? New interiors on some aircraft but then you need a dedicated fleet. Costs could go up quick if they do decide to switch.

User currently offlineMidway2airtran From United States of America, joined Jul 2003, 864 posts, RR: 2
Reply 4, posted (8 years 7 months 1 week 6 days 11 hours ago) and read 2169 times:

Very good question, it would be scary to most carriers if they simplified to two fares.

Generally the more fares you have, the more options you have to generate the most revenue out of the passenger. It's almost like buying a car from a used car lot. Technology makes another twist in the game too.

I personally feel that simplifed fare structures benefit customer service and cost savings by eliminating complication.

However many IMO have gone too far (mostly Legacy carriers) with this and it backfires, turning potential passengers away.

Southwest is still fairly simple, I believe 6-7 fare tiers; same goes for other lowfare carriers too. Notice that I mentioned "lowfare", not just LCCs!!

As with anything, its all about balance!



"Life is short, but your delay in ATL is not."
User currently offlineJayDavis From United States of America, joined Jan 2001, 2000 posts, RR: 15
Reply 5, posted (8 years 7 months 1 week 5 days 17 hours ago) and read 2056 times:

Well when WN had the two-fare structure, the only difference was that on the Executive Class flights, drinks were free !!  Smile

I think that was the only difference, PLUS, the time of day the flights were, that was the only difference.

TxAgKuwait, I wonder if somebody with a TON of cash to plow through could start another LCC within Texas? Maybe with some Dash 8's, the new ones that are REALLY fast and quiet? Just a thought.

p.s. We (Texas Tech !!) creamed your team in football last year!  Smile


Jay


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