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Steenland: Expect Higher Plane Ticket Prices In 08  
User currently offlineKarlB737 From United States of America, joined Mar 2004, 3145 posts, RR: 10
Posted (7 years 2 days 19 hours ago) and read 3231 times:

This is the exact opposite that I expected from Northwest. Steenland had been on TV with an interview and talked about the significant progress that Northwest had made when they were coming out of bankruptcy. They bought some aircraft for Northwest and Mesaba. It seemed like despite rising oil prices that every component had been taken into consideration. Now this. At what price do passengers more seriously consider alternatives?

Courtesy: KARE-TV

Steenland: Expect Higher Plane Ticket Prices In 2008

http://www.kare11.com/news/news_article.aspx?storyid=490934

36 replies: All unread, showing first 25:
 
User currently offlineFlyf15 From , joined Dec 1969, posts, RR:
Reply 1, posted (7 years 2 days 18 hours ago) and read 3197 times:

All airlines should charge higher prices... and I hope they do. Its ridiculous that you can buy a ticket across the country cheaper than it is to drive. Those cheap tickets are riding on the sacrifices of the employees, of safety, and of the financial success of the airlines and it has to end.

User currently offlinePhilSquares From , joined Dec 1969, posts, RR:
Reply 2, posted (7 years 2 days 18 hours ago) and read 3201 times:



Quoting KarlB737 (Thread starter):
At what price do passengers more seriously consider alternatives?

I guess I am somewhat confused. With oil now the greatest cost to airlines how can one really expect airfares to decrease? US travellers have been out of touch with reality in the past years and due to over capacity fares have been artifically low. Now with the shakeout over of the post 9/11 fallout, airlines are in a position where they do have some pricing power and they will use that power to ensure they remain profitable in the next few years. If not, they will not be able to embark on any fleet renewal or cabin upgrades due to the lack of positive cash flow.


User currently offlineEvilForce From , joined Dec 1969, posts, RR:
Reply 3, posted (7 years 2 days 18 hours ago) and read 3190 times:



Quote:
Steenland said high oil prices will be the chief challenge facing the Eagan-based carrier in 2008.

"If fuel prices stay at the level that they are at now, airfares will have to go up. If airfares go up to reflect this price of fuel, I think there will be fewer passengers," Steenland told the newspaper.

Northwest expects to earn more than $700 million this year, and Steenland anticipates that the carrier will remain profitable in the coming year.

"It becomes harder to maintain your profit margins when fuel is at $90 a barrel versus the $65 a barrel that we had in our business plan," Steenland said.

I don't see any way around not raising airfares. Oil goes up, fares go up. Pretty simple.


User currently offlinePGNCS From United States of America, joined Apr 2007, 2858 posts, RR: 48
Reply 4, posted (7 years 2 days 17 hours ago) and read 3122 times:



Quoting PhilSquares (Reply 2):


Quoting KarlB737 (Thread starter):
At what price do passengers more seriously consider alternatives?

I guess I am somewhat confused. With oil now the greatest cost to airlines how can one really expect airfares to decrease? US travellers have been out of touch with reality in the past years and due to over capacity fares have been artifically low.

Thank you, Phil. It would certainly seem obvious, but you put it more eloquently than anyone else. Merry Christmas!


User currently offlineCrj200faguy From United States of America, joined May 2007, 400 posts, RR: 0
Reply 5, posted (7 years 2 days 14 hours ago) and read 3041 times:

Airfares are ridiculously low. $200 roundtrip same day price MSP-ATL. That's a joke. I think the prices in the last 2 months have been so low that now everyone in America has flown. I've been having people ask for peanuts or pretzels. I haven't had that question in 2 years. Flying is a privilege not a right. People should pay no less than $300 roundtrip domestically. This should make non reving easier.

User currently offlineAsuflyer05 From United States of America, joined Feb 2004, 2373 posts, RR: 3
Reply 6, posted (7 years 2 days 14 hours ago) and read 3030 times:

Airlines will start to raise fares until WN has a fare sale and starts whoring out seats.

User currently offlineBrisseDK From Denmark, joined Nov 2007, 383 posts, RR: 0
Reply 7, posted (7 years 2 days 12 hours ago) and read 2971 times:

You absolutely lost me when you said this:

Quoting Crj200faguy (Reply 5):
Flying is a privilege not a right.

in the same sentence with:

Quoting Crj200faguy (Reply 5):
This should make non reving easier.

Somebody is definitely out of touch...  Yeah sure

To all you dinosaurs:

  • Flying is not a privilege!
  • customers (pax) are not doing you a favor when they choose to fly!
  • you are supposed to provide a service to your customers, because they darn well pay for it!
  • if customers only want to pay $200 for your service, it's probably not worth a cent more!


Besides, some companies are perfectly capable of turning a profit with even ridiculously low fares. It's all about the business models and giving the customers what they want.

Quoting Crj200faguy (Reply 5):
I've been having people ask for peanuts or pretzels.

Of course they ask, and it is your prerogative to say: "Sorry dude, you get what you pay for". But don't blame the customer for asking!

Sorry for the harsh words, but blaming your customers is never the answer to any difficult business situation  Smile

Regards,
BJ



Frequent flyer based in CPH - mostly heading to: OSL, HEL, KEF, FAE and EWR
User currently offlineFlyf15 From , joined Dec 1969, posts, RR:
Reply 8, posted (7 years 2 days 12 hours ago) and read 2956 times:



Quoting BrisseDK (Reply 7):
Flying is not a privilege!

Yes it is, it is done by private corporations. It is not written down in any law or bill of rights that passengers have the right to fly. They have the privilege to fly if they are offered the chance and can afford the ticket price.

Quoting BrisseDK (Reply 7):
if customers only want to pay $200 for your service, it's probably not worth a cent more!

The problem here is that the $200 doesn't go towards service (in the traditional sense). $200 doesn't even begin to cover the costs of fuel, equipment, salaries, infrastructure, etc... let alone having money left over to pay for service. Passengers have time and time again shown that all they want is a cheap ticket ignoring everything else.

Its like the people on United that complain of a lack of legroom... then you say "well, you could've bought a ticket in economy plus with more legroom" and they respond with "No way, that would've cost more money!". You can't have your cake and eat it to. Service / comfort / ontime / respect / etc comes at a price... airlines are businesses... and its a price most passengers have shown they're not willing to pay.


User currently offlineDLOnur From United States of America, joined Jun 2007, 290 posts, RR: 1
Reply 9, posted (7 years 2 days 12 hours ago) and read 2941 times:

There is no way airlines are going to survive the massive increase in costs (esp. fuel) if they are charging ticket prices that really haven't increased (in fact, they have decreased) since the mid-1980's.

They haven't even been adjusted for inflation!

I've always argued: charge people more, get rid of the stupid nickel and dime fees and service charges, and increase the quality of service for that price tag.



What you believe is what you see.
User currently offlineBrisseDK From Denmark, joined Nov 2007, 383 posts, RR: 0
Reply 10, posted (7 years 2 days 12 hours ago) and read 2915 times:



Quoting Flyf15 (Reply 8):
Yes it is, it is done by private corporations. It is not written down in any law or bill of rights that passengers have the right to fly. They have the privilege to fly if they are offered the chance and can afford the ticket price.

Corporations are slaves to their owners/shareholders, and trust me, they want an $ss in every seat. It is no longer a privilege as the air we breath (which might not be a privilege for eternity, but that's a whole other discussion). I agree with you, that the corporations have every right to refuse doing business with whomever they like, as long as they aren't doing it for the wrong reasons (race, sex etc.) So in that sense, you can call it a "privilege" or what ever you like.

A plane is a means of transportation. Some might even see it as a fancy, and slightly more sophisticated Greyhoundbus. Unfortunately some people within the industry hasn't acknowledged that change in perception and that is a problem. For them!

Quoting Flyf15 (Reply 8):
You can't have your cake and eat it to.

I completely agree with you! But the customer has every right to ask - just as you have every right to tell them the price!

Quoting Flyf15 (Reply 8):
Service / comfort / ontime / respect / etc comes at a price

Honestly, remove respect from your list. Every customer on a plane deserves respect until proven otherwise, regardless of the price paid!

Quoting Flyf15 (Reply 8):
$200 doesn't even begin to cover the costs of fuel, equipment, salaries, infrastructure, etc...

I simply do not believe that all customers pay those fares. If that is the case, then everybody in yield-management should be fired! But, some companies eg. FR actually make it work with fares like that. I'm not saying that FR is the only way, but it can definitely be done!

I fly all over Europe in Y, Y+ and C. The difference between them: Flexibility, a sandwich and a whole lot of money! For me, the product simply isn't differentiated enough, except for the flexibility part, that it should warrant any price premium for Y+ and C.

In conclusion: Find out what kind of product your customers want and at what price. If you can't figure out that equation, then get the h€ll out of the game!

Regards,
BJ



Frequent flyer based in CPH - mostly heading to: OSL, HEL, KEF, FAE and EWR
User currently offlineFlyf15 From , joined Dec 1969, posts, RR:
Reply 11, posted (7 years 2 days 12 hours ago) and read 2911 times:



Quoting BrisseDK (Reply 10):
In conclusion: Find out what kind of product your customers want and at what price.

I agree with you. The main point of what I'm saying is that airlines have already done that. Most customers want the absolute lowest fair possible with no regard to service, punctuality, comfort, etc. They want these things, but until they're willing to pay for them, they're not going to get them.


User currently offlineBrisseDK From Denmark, joined Nov 2007, 383 posts, RR: 0
Reply 12, posted (7 years 2 days 12 hours ago) and read 2909 times:



Quoting DLOnur (Reply 9):
I've always argued: charge people more, get rid of the stupid nickel and dime fees and service charges, and increase the quality of service for that price tag.

Completely agree with you, but be sure that your customers actually feel that they get their moneys worth, otherwise they will vote with their feet and run to the competitors.

Personally I feel silly paying C-fare and only getting a sandwich. That's is laughing in my face, and I will take my business elsewhere.

Regards,
BJ



Frequent flyer based in CPH - mostly heading to: OSL, HEL, KEF, FAE and EWR
User currently offlineWesternA318 From United States of America, joined Oct 2004, 5726 posts, RR: 24
Reply 13, posted (7 years 2 days 12 hours ago) and read 2900 times:



Quoting BrisseDK (Reply 10):
Some might even see it as a fancy, and slightly more sophisticated Greyhoundbus.

Unless your on Skybus, Southwest or ick, jetBlew or Frontier...



Check out my blog at fl310travel.blogspot.com!
User currently offlineBrisseDK From Denmark, joined Nov 2007, 383 posts, RR: 0
Reply 14, posted (7 years 2 days 11 hours ago) and read 2892 times:



Quoting WesternA318 (Reply 13):
Unless your on Skybus, Southwest or ick, jetBlew or Frontier...

Please add Ryanair to that list. Might be the one who resembles Greyhound the most.

I actually like Jetblue. As a customer I feel like I'm getting more than I pay for when I fly them. But, it's been a year since last time and to be honest, I were never a frequent traveller on B6, so don't really have valid empirical data to support me joining the group of cheerleaders.

Regards,
BJ



Frequent flyer based in CPH - mostly heading to: OSL, HEL, KEF, FAE and EWR
User currently offlineWesternA318 From United States of America, joined Oct 2004, 5726 posts, RR: 24
Reply 15, posted (7 years 2 days 11 hours ago) and read 2885 times:



Quoting BrisseDK (Reply 14):
Please add Ryanair to that list

LOL, Skybus is the American equivalent. Ive flown B6 a handful of times, and none of the flights impressed me. The crew all had that same head-so-far-up-their-ass attitude that I couldnt wait to get back on CO.



Check out my blog at fl310travel.blogspot.com!
User currently offlineJBLUA320 From United States of America, joined May 2002, 3180 posts, RR: 19
Reply 16, posted (7 years 2 days 11 hours ago) and read 2871 times:
Support Airliners.net - become a First Class Member!

Is anyone surprised? Gas prices are up on an industry that is bent on frequency. People are willing to pay, as they have been through every other fare increase these past few years -- be it for leisure or business -- and the load factors and, for some carriers, yields are proving it.

JBLU


User currently offlineBrisseDK From Denmark, joined Nov 2007, 383 posts, RR: 0
Reply 17, posted (7 years 2 days 11 hours ago) and read 2860 times:



Quoting JBLUA320 (Reply 16):
industry that is bent on frequency

The whole "frequency" debate is actually quite interesting. I keep hearing that the US is all about frequency, but to what degree? What if carriers start reducing frequency on some routes, replacing RJs with mainline and thus reducing CASM significantly. Would be interesting to toy around with that idea instead of the whining and blaming the customers that they don't want to pay more for the tix.

So, the Qs are:
  • How much are customers willing to pay for frequency?
  • How long are they willing to wait for the next flight to save a buck?
  • Will the customer choose airline X over Y if X was cheaper than Y, but Y departs Z minutes before X (sorry for the alphabet-game)


Regards,
BJ



Frequent flyer based in CPH - mostly heading to: OSL, HEL, KEF, FAE and EWR
User currently offlineBmacleod From Canada, joined Aug 2001, 2384 posts, RR: 0
Reply 18, posted (7 years 2 days 11 hours ago) and read 2824 times:

AC might be able to avoid the increase in fuel surcharges in 2008 if not smaller surcharges as the Canadian $ is now higher than the U.S $ and is expected to hover around $1.05-1.10 for most of 2008.

WS fuel surcharges haven't been as high as AC and I don't see them increasing fares in 2008.

[Edited 2007-12-25 15:00:34]


The engine is the heart of an airplane, but the pilot is its soul.
User currently offlineECONOMICS From , joined Dec 1969, posts, RR:
Reply 19, posted (7 years 2 days 10 hours ago) and read 2800 times:



Quoting Flyf15 (Reply 1):
All airlines should charge higher prices... and I hope they do. Its ridiculous that you can buy a ticket across the country cheaper than it is to drive. Those cheap tickets are riding on the sacrifices of the employees, of safety, and of the financial success of the airlines and it has to end.

This doesn't take into account leisure travellers who will not travel if fares get too high.

Average fares will increase, as they have to with oil prices & consumption heading the way they are, but there still will have to be big sales, but maybe not so many seats & maybe at slightly higher prices.

Interesting that Maxjet have gone into chapter 11, with something like 60% load factors using 4 of their 5 aircraft only. Surely, they could increase their load factor, with lower yielding fares resticted to certain market segments, like industry fares, student fares, package with things like car hire, accommodation or whatever, without disclosing the breakdown price.

Hey they could do a contra ... swap so many widgets for so many seats & then give the widgets away "FREE" with the flights that aren't selling well or conditions like must buy a return(round trip). Air NZ now has a grab a seat, where they clear unsellable inventory-this helps their bottom line slightly, but also gets people looking at their website & creating goodwill.


User currently offlineJBLUA320 From United States of America, joined May 2002, 3180 posts, RR: 19
Reply 20, posted (7 years 2 days 8 hours ago) and read 2748 times:
Support Airliners.net - become a First Class Member!



Quoting BrisseDK (Reply 17):
The whole "frequency" debate is actually quite interesting. I keep hearing that the US is all about frequency, but to what degree?

Well, people want planes to fly where they want them, when they want them -- this is what regional jets have allowed for in many markets. Frequency was and is a huge selling point, especially in major business markets (look at the DL/US Shuttle), but also in big connecting markets. Continental is running 11 daily flights IAH-AUS in March!

What I wonder is whether or not the airlines have found a way to band-aid a system that is actually unsustainable. The markets are stimulated and these frequency-based flights are going out quite full. A lot of the majors are reporting solid load factors and decent-to-good yields. With such a huge demand for air travel, it seems like fuel factors are costing the airlines a pretty penny consumers have so far been willing to burden. The obvious issue-- ATC restrictions and slots (or lackthereof)-- has been the front-running concern. One would think that the fix here is to just "shrink" the market, reduce frequency and charge the higher fares that people WILL pay. But airlines have invested so much money into labor, and new equipment to meet this demand... not to mention inflating the second-hand market with planes, what about labor contracts and disputes?

So what does one do??

JBLU


User currently offlineFlyf15 From , joined Dec 1969, posts, RR:
Reply 21, posted (7 years 2 days 8 hours ago) and read 2728 times:



Quoting WesternA318 (Reply 13):
Southwest or ick, jetBlew or Frontier...

Frontier is an experience 10x better than the legacy carriers. Availability of satellite tv, clean aircraft, happy employees who care about their customers, etc. Although everyone bashes Southwest, I am also always greeted by happy employees who give me a smile back, they have food onboard for free, and also are clean and punctual. I've never been on jetBlue but I've heard its similar.

These airlines are on the top end of the customer service spectrum, not the bottom. They're much less of a Greyhound bus than the legacies are...


User currently offlineFiveMileFinal From United States of America, joined Oct 2005, 232 posts, RR: 0
Reply 22, posted (7 years 2 days 7 hours ago) and read 2681 times:

Huh.

I'll tell you this much: I feel like I'm getting more bang for my buck on the LCCs than I have on any legacy carrier (particularly United). At least with the LCCs we can all dispense with the pecking-order nonsense and just get on the plane and fly.

And it's not like you get all that much more by going with the legacies anyway. Upgrades you can't ever use...buy-on-board meals that taste worse than anything you could buy at the airport..."economy plus" seating that's barely more than what's offered in economy...I don't see how any body here can they they're remotely getting what they pay for. And it's not all that much better up front unless you're on something like Etihad or Singapore: Overcooked steaks and undercooked vegetables, broken seats and PTV screens.

And if you get displaced, it's not like the legacies won't leave you stuck in an airport all night if you happen to miss your connection. Or two or three if there's bad WX.

Give me a flight on SleazyJet or The WN anyday. Until legacies start offering a markedly better product for the added price, what's the point?



You goin'? We fly you dere! You been? We done already flew up in dere!
User currently offlineWesternA318 From United States of America, joined Oct 2004, 5726 posts, RR: 24
Reply 23, posted (7 years 2 days 7 hours ago) and read 2664 times:



Quoting FiveMileFinal (Reply 22):
Upgrades you can't ever use...

I've never had a problem on CO, and I've been different levels of the elite program since 1997.

Quoting FiveMileFinal (Reply 22):
buy-on-board meals that taste worse than anything you could buy at the airport...

CO doesnt do this, you either get a snack (usually a burger or other sandwich) or a meal. I know what you mean about UA not giving a rats ass about their pax, I was on an SLC-LHR trip and the way to London was so bad that I ditched the return part of my ticket and went with AA home instead.



Check out my blog at fl310travel.blogspot.com!
User currently offlineEvilForce From , joined Dec 1969, posts, RR:
Reply 24, posted (7 years 2 days 7 hours ago) and read 2658 times:

I love both Frontier and Jet Blue. Now that Jet Blue's 320's have 36"+ legroom it's awesome! I do like Continental a whole lot too. But as far as anyone else..... it's just a commodity really. USAirways - United - Delta - NWA..... all the same to me. None better, none worse than the other.

25 SNCntry32 : So true.. So so true. 'I have pringles or a trail mix type snack for $2.' 'Everything is $2!'
26 BrisseDK : Of course the customers want planes to fly where and when they want them to. The big question regarding this topic is: If you have 2 choices of flyin
27 AMFAproud : Was it not just a couple of years ago before the mechanics strike at NW that Steenland bemoaned the fact that they must have employee cuts and could N
28 Bobnwa : The situation changed, but yes Steenland did say that along with the CEO's of AA,UA,DL,US, and AA.
29 KarlB737 : You are right and I was wrong................
30 Isitsafenow : Karl...is there really an alternative for the pax? I guess on short hops, like GRR-CVG,CLE-PHL or STL-OMA, one could drive it. safe
31 FiveMileFinal : See, if we had a ground transportation network worth a damn (i.e. a decent high-speed rail system -- sorry, our dilapidated, overworked interstate sys
32 JBLUA320 : Here's a difference for starters... Continental's meals are not BOB?!
33 Asuflyer05 : Since when does CO offer buy on board? I've never paid for a meal on CO.
34 Post contains images Breaker1011 : Raise my fare when I travel on leisure, I agree it's too cheap, and if I have to fly or just desire to do so, I should pay a rational price. But, I th
35 WesternA318 : I actually like switching flights in IAH, Terminal E is superb, and so are the connectionopportunities afforded to me, not to mention the new Preside
36 Mir : Amen to that! Their service may be a little slow (which is probably a result of the removal of the extra row of seats to allow the 36" pitch, and the
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