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WN & B6 To Drop Fare Caps  
User currently offlineLogos From United States of America, joined Jan 2000, 792 posts, RR: 1
Posted (5 years 10 months 4 days 5 hours ago) and read 5659 times:

This is a developing story on the Drudge Report right now. I take this to mean that there will now be no cap on unrestricted fares. Anybody heard this from any other source?

Cheers,
Dave in Orlando


Too many types flown to list
30 replies: All unread, showing first 25:
 
User currently offlineOPNLguy From , joined Dec 1969, posts, RR:
Reply 1, posted (5 years 10 months 4 days 5 hours ago) and read 5583 times:

Maybe that's what's spiked the stock prices up...

http://www.airliners.net/aviation-fo...eneral_aviation/read.main/4034292/


User currently offlineMaverickM11 From United States of America, joined Apr 2000, 16934 posts, RR: 48
Reply 2, posted (5 years 10 months 4 days 5 hours ago) and read 5571 times:

I always thought fare caps were the dumbest idea. Why would you want to put a cap on what a passenger is willing to pay you?


E pur si muove -Galileo
User currently offlineOPNLguy From , joined Dec 1969, posts, RR:
Reply 3, posted (5 years 10 months 4 days 5 hours ago) and read 5532 times:



Quoting MaverickM11 (Reply 2):

I always thought fare caps were the dumbest idea. Why would you want to put a cap on what a passenger is willing to pay you?

OPNLguy not know, and a good reason handle isn't MKTGguy...  Wink


User currently offlineXT6Wagon From United States of America, joined Feb 2007, 3321 posts, RR: 4
Reply 4, posted (5 years 10 months 4 days 4 hours ago) and read 5481 times:



Quoting MaverickM11 (Reply 2):

I always thought fare caps were the dumbest idea. Why would you want to put a cap on what a passenger is willing to pay you?

It keeps people from finding $1000 Y class fares that drive them off flying you again even when your normal price on most of the routes they fly is very low.

I somehow doubt its "removing" the cap, instead raising it some.


User currently offlineDeltaAVL From United States of America, joined Mar 2007, 1893 posts, RR: 6
Reply 5, posted (5 years 10 months 4 days 4 hours ago) and read 5387 times:



Quoting XT6Wagon (Reply 4):
It keeps people from finding $1000 Y class fares that drive them off flying you again even when your normal price on most of the routes they fly is very low.

I somehow doubt its "removing" the cap, instead raising it some.

However, if all airlines removed their price caps, wouldn't the number of people being driven off and finding other airlines balance each other out?



"We break, We bend, With hand in hand, When hope is gone, Just hang on." -Guster
User currently offlineMaverickM11 From United States of America, joined Apr 2000, 16934 posts, RR: 48
Reply 6, posted (5 years 10 months 4 days 3 hours ago) and read 5282 times:



Quoting XT6Wagon (Reply 4):
It keeps people from finding $1000 Y class fares that drive them off flying you again even when your normal price on most of the routes they fly is very low.

But there's no such thing. Either you pay the fare or you don't, and that $1000 walk up fare is not meant for the person that is offended by it--it's meant for the non-price sensitive traveler that has to buy it. I don't know who came up with the idea that a high fare has some sort of negative halo effect on travelers. It's so nonsensical.



E pur si muove -Galileo
User currently offlineRdwelch From , joined Dec 1969, posts, RR:
Reply 7, posted (5 years 10 months 4 days 3 hours ago) and read 5276 times:



Quoting OPNLguy (Reply 3):
Quoting MaverickM11 (Reply 2):

I always thought fare caps were the dumbest idea. Why would you want to put a cap on what a passenger is willing to pay you?

OPNLguy not know, and a good reason handle isn't MKTGguy...

OPNLguy, just pawn in game of dispatch, but he like Sheriff Bart!!!!

Gus.


User currently offlineXT6Wagon From United States of America, joined Feb 2007, 3321 posts, RR: 4
Reply 8, posted (5 years 10 months 4 days 3 hours ago) and read 5225 times:



Quoting MaverickM11 (Reply 6):
But there's no such thing. Either you pay the fare or you don't, and that $1000 walk up fare is not meant for the person that is offended by it--it's meant for the non-price sensitive traveler that has to buy it. I don't know who came up with the idea that a high fare has some sort of negative halo effect on travelers. It's so nonsensical.

you say this, but if you have been here any time at all, you will see plenty of people burning airlines at the stake for a $1000 fare when its normaly well under $500.

I don't know who you are trying to convince, but most people I know only have to have a stupidly priced fare pop up once or twice before they just stop looking at that airline.


User currently offlineTxAgKuwait From United States of America, joined Aug 1999, 1803 posts, RR: 43
Reply 9, posted (5 years 10 months 4 days 3 hours ago) and read 5208 times:



Quote:
OPNLguy, just pawn in game of dispatch, but he like Sheriff Bart!!!!

What a great quote, and how appropriate. After all, Southwest's original president (and the man who built a system so sound Herb coudln't screw it up) was named after Hedley Lamarr.

Not to mention a lot of the original "hostesses" (later 'Flight Attendants') looked a lot like Lillie Von Shtupp.


User currently offlineOPNLguy From , joined Dec 1969, posts, RR:
Reply 10, posted (5 years 10 months 4 days 3 hours ago) and read 5174 times:



Quoting Rdwelch (Reply 7):
OPNLguy, just pawn in game of dispatch, but he like Sheriff Bart!!!!

Aw, shucks, OPNLguy straight!  Wink

Quoting TxAgKuwait (Reply 9):
After all, Southwest's original president (and the man who built a system so sound Herb coudln't screw it up) was named after Hedley Lamarr.

Hey, it's 1872, you can sue her..

My favorite line in the whole movie is when the preacher is admonishing the pissed-off town folks not to be too hasty and as he's waving his Bible in the air one of the town folks shoots a fist-size hole through it, whereupon the preacher says to Bart, "Son, you're on your own..."

Sort of like today's airline industry...  Wink


User currently offlineRdwelch From , joined Dec 1969, posts, RR:
Reply 11, posted (5 years 10 months 4 days 1 hour ago) and read 5007 times:



Quoting TxAgKuwait (Reply 9):
Not to mention a lot of the original "hostesses" (later 'Flight Attendants') looked a lot like Lillie Von Shtupp.



Quoting OPNLguy (Reply 10):
My favorite line in the whole movie is when the preacher is admonishing the pissed-off town folks not to be too hasty and as he's waving his Bible in the air one of the town folks shoots a fist-size hole through it, whereupon the preacher says to Bart, "Son, you're on your own..."

Sort of like today's airline industry...

With share holder meetings being led by Gabby Johnson.....

"I was hired here, I work here, and dad gummit, I'm gonna retire here. And no sidewindin', bushwackin' frikerfrakin' is gonna merge/aquire/liquidate me from here!!!"

Ah...the classics with a modern twist. Love you guys

Gus


User currently offlineMaverickM11 From United States of America, joined Apr 2000, 16934 posts, RR: 48
Reply 12, posted (5 years 10 months 4 days 1 hour ago) and read 4966 times:



Quoting XT6Wagon (Reply 8):
you say this, but if you have been here any time at all, you will see plenty of people burning airlines at the stake for a $1000 fare when its normaly well under $500.

Those aren't the people airlines expect to buy that last seat on the plane though. It just doesn't make any economical sense.

Quoting XT6Wagon (Reply 8):
I don't know who you are trying to convince,

Nobody, but after Ted, fare caps has to be one of the dumbest ideas I've seen in the industry. If someone were to come up with a cogent argument why having a high fare is a bad thing or a deterrent to people buying low fares when they are available I'd love to hear it.



E pur si muove -Galileo
User currently offlineIowaman From United States of America, joined May 2004, 4312 posts, RR: 6
Reply 13, posted (5 years 10 months 4 days 1 hour ago) and read 4917 times:
AIRLINERS.NET CREW
FORUM MODERATOR

As of right now, WN is still fare capped, but it has been upped to $404 o/w (from $399). I highly doubt WN will completely eliminate them.

User currently offlineTxAgKuwait From United States of America, joined Aug 1999, 1803 posts, RR: 43
Reply 14, posted (5 years 10 months 4 days 1 hour ago) and read 4854 times:



Quote:
Nobody, but after Ted, fare caps has to be one of the dumbest ideas I've seen in the industry. If someone were to come up with a cogent argument why having a high fare is a bad thing or a deterrent to people buying low fares when they are available I'd love to hear it.

I could argue that charging people different prices for the same product based solely upon the time of purchase is discriminatory, but you would counter that the product is not the same....that people buying at the last minute are paying extra for the convenience of being able to avoid planning.

Still, it would suck being the guy who paid $899 one way when the person sitting next to you paid $79.

In the perfect world, airlines would toss all these advance purchase fares in to the blue water of that aluminum toilet and price their product like WalMart prices a 12 pack of Coca-Cola. One standard fare....maybe with some special fares for seniors, youth, and military. But none of these $99 to $1200 swings you see nowadays.

The biggest problem with the advance purchase fare is that it is contrary to the real value of the seat being sold. Four or five months before the flight....that seat is worth quite a bit. There's no telling how much you might get for it if you wait to sell it, but Noooooooooo....Airlines will darned near give the thing away four months out.

As you get closer and closer to flight time, the seat devalues.....because your chances of selling it become less and less. Finally, at the moment the door is closed and the aircraft is pushed back, the empty seat becomes absolutely valueless.

I call this the Spoiled Banana corollary. Most of you are too young to remember when grocery stores closed on Sundays....but in my somewhat wayward childhood they did.

As a result, if you went in to the grocery on Saturday afternoon late, right before the store closed....you would find all the almost-ready-to-throw-out produce marked down to unbelievably low prices. My parents had some acquaintances who would do the bulk of their shopping late Saturday, and their kitchen always smelled of overripe bananas, purchased for a nickel a pound.

Thus the airline seat declines in value, rather than appreciating....up until the time the door closes at which time it becomes a spoiled banana.

But there are few good ways to make seats cheaper and cheaper until departure...because folks would postpone making travel decisions and it would make schedule planning difficult and airlines would probably offer real cheap standby fares thus people would book false reservations under assumed names, then go out to the airport to stand by and reap a cheap fare when the fictitious people failed to show.

No, the best way to do things would be for airlines to figure out what it costs them to provide the service, and set their fares at some point higher than this.....hopefully at a level low enough to generate enough passengers buying said fares to manage to make a profit.

It would not be as ugly as some people think. American has a CASM of 13.69 cents. It is roughly 2470 miles from NYC to El Lay. That means it is costing AA $338 to fly a seat across there. You figure a 65% load factor, and American breaks even with a one way fare of $520.

Yes, Southwest has lower costs and yes, they would probably choose to charge a lower price. With their costs, it would cost them $242 per seat ISP-LAX. Knowing how they preferred a peak/off peak pricing system back in those thrilling days of yesteryear before Crandall went voila' and gave the industry the "SuperSaver" fare.....they would set their daytime price to break even at about a 55% LF ($ 440 ow) and their evening/weekend economy flight price to break even at 80% (which gives you a ow fare of $300).

If the government wanted to regulate things.....telling airlines how much to charge is not the way to go. Instead, a much better solution would be to force the airlines to swallow the bitter pill by dictating that they must set their fares at a level sufficient to break even if the flight was full. That would eliminate a lot of these "loss leader" "Bait & switch" "Predatory Pricing" fares.

Once upon a time airlines were able to publish their fares in their flight schedule because they (A) weren't ashamed of them and (B) they didn't change based upon the phase of the moon, the tides, or whether or not the Airline president;s wife had a headache the previous evening.


User currently offlineIowaman From United States of America, joined May 2004, 4312 posts, RR: 6
Reply 15, posted (5 years 10 months 3 days 20 hours ago) and read 4661 times:
AIRLINERS.NET CREW
FORUM MODERATOR



Quoting Iowaman (Reply 13):
As of right now, WN is still fare capped, but it has been upped to $404 o/w (from $399). I highly doubt WN will completely eliminate them.


Correcting myself:

$404 is the highest o/w non-stop.

$414 o/w is the highest connection/one-stop.


User currently offlineLTBEWR From United States of America, joined Jan 2004, 12878 posts, RR: 12
Reply 16, posted (5 years 10 months 3 days 17 hours ago) and read 4562 times:

There have been several news stories that broke yesterday that the LCC's like WN are raising their top fares on all routes and aiming for more business travelers. WN will no longer have a Nationwide $299 cap on any flight but they will not be charging the checked bag, or other fees, still offer frequent service and still offer free beverages and snacks. One news report I read said that the highest fares will not have change of reservation fees and the like aimed for the business traveler. Still their highest fares will be significantly cheaper the majors highest ones. This change in top fare policies by the LCC's means the legacy airlines will also be to raise their top and other fares. That may explain the airline stock price raises yesterday.

User currently offlinePHLBOS From United States of America, joined Mar 2004, 7482 posts, RR: 24
Reply 17, posted (5 years 10 months 3 days 17 hours ago) and read 4481 times:

Quoting LTBEWR (Reply 16):
WN will no longer have a Nationwide $299 cap on any flight

IIRC, WN raised their fare cap to $399 about 2 years ago.

Quoting Rdwelch (Reply 11):
Ah...the classics with a modern twist.

One more to add:
Relats to the scene when everyone is inside the church singing:

There's no point avoiding it...
Other airlines are turning into sh#t.


[Edited 2008-06-20 05:02:00]


"TransEastern! You'll feel like you've never left the ground because we treat you like dirt!" SNL Parady ad circa 1981
User currently offlineCuriousFlyer From United States of America, joined Oct 2006, 675 posts, RR: 0
Reply 18, posted (5 years 10 months 3 days 17 hours ago) and read 4448 times:

It's sad, I really liked the concept of the capped fare, and thought everyone should do that.

My view is: stop selling JFK-SFO one way for $79 and then stop selling it for $1,000, it really annoys people.

Above all it really made sense for low cost carriers, it was a strong argument to differentiate them.

I never flew Southwest, it's impractical from NY, but when I fly JetBlue, it is because they are $300 less than Continental, I don't care about DirecTV and free snacks this much, particularly if I'll end up in FLL when I'm going to MIA...


User currently offlineLogos From United States of America, joined Jan 2000, 792 posts, RR: 1
Reply 19, posted (5 years 10 months 3 days 15 hours ago) and read 4181 times:

Here's a link to the Bloomberg.com article that Drudge is now referencing. Sounds like an increase in the cap, not its complete elimination for now. Also discusses jetBlue's toying with First (or premium) Class, which is being discussed in another thread.

http://www.bloomberg.com/apps/news?pid=20601103&sid=ah5Jxh.Nqzq0

Cheers,
Dave in Orlando



Too many types flown to list
User currently offlineMaverickM11 From United States of America, joined Apr 2000, 16934 posts, RR: 48
Reply 20, posted (5 years 10 months 3 days 15 hours ago) and read 4038 times:



Quoting CuriousFlyer (Reply 18):
stop selling it for $1,000, it really annoys people.

It doesn't annoy the people that count on having that least seat available for them to buy, and that's all that matters. 99.99% of the time those high fares never see the light of day anyway. LGAMCO probably has a $1000 walk up on some carriers but how often do you think anyone has to pay that? Especially when B6 probably has a walk up that is half that....



E pur si muove -Galileo
User currently offlineFrmrCAPCADET From United States of America, joined May 2008, 1690 posts, RR: 1
Reply 21, posted (5 years 10 months 3 days 13 hours ago) and read 3664 times:

When facts change intelligent people (inc. the odd airline or two) change their mind. What was to be expected is that SW and Jetblue have adjusted fares upward following their normal straight forward way of pricing from previous years. The NYT's article noticed that the passengers considered it an non-event.


Buffet: the airline business...has eaten up capital...like..no other (business)
User currently offlineScottB From United States of America, joined Jul 2000, 6578 posts, RR: 32
Reply 22, posted (5 years 10 months 3 days 12 hours ago) and read 3500 times:



Quoting MaverickM11 (Reply 6):
Either you pay the fare or you don't, and that $1000 walk up fare is not meant for the person that is offended by it--it's meant for the non-price sensitive traveler that has to buy it.

Except that the "non-price sensitive traveler" may not be the type of person for whom price typically is no object, but may be, for example, a person traveling due to a family medical emergency or death of a close relative. Or she may be a small business owner who watches all her expenses very closely but had to make a business trip on short notice. For these people, the oh-my-God-it's-how-much? walk-up fares have the tendency to destroy goodwill.

You probably could have sold bags of ice in New Orleans after Katrina for $20 apiece, but would it have been appropriate to do so? When the public thinks of drug companies, do they think of the often-miraculous things their products do or do they think of how exorbitant the pricing for brand-name prescriptions can be?

Part of WN's business niche is the price-sensitive business traveler -- the type of person who might take that last-minute trip if the airfare is priced reasonably. Or a couple in Houston who might take a spur-of-the-moment trip to New Orleans for the weekend (and fly instead of drive because the ticket wasn't $500 each way).

Quoting MaverickM11 (Reply 12):
If someone were to come up with a cogent argument why having a high fare is a bad thing

Simply stated: it damages the airline's reputation. Southwest has a good reputation with the public in part because people have come to expect that Southwest won't have nosebleed fares, even if they aren't always the cheapest. It's like shopping at Costco -- it's not always the cheapest, but you know the price will be fair and the quality will be good.

Quoting MaverickM11 (Reply 20):
It doesn't annoy the people that count on having that least seat available for them to buy

Selling the last seat on the plane for $1,000 or even $10,000 doesn't necessarily mean it will be available if someone else already bought it.


User currently offlineMaverickM11 From United States of America, joined Apr 2000, 16934 posts, RR: 48
Reply 23, posted (5 years 10 months 3 days 10 hours ago) and read 3206 times:



Quoting ScottB (Reply 22):
it damages the airline's reputation

I don't think it does, certainly not by any meaningful amount. The whole thing had a nice PR ring to it, but likely is ultimately revenue negative, like Simplifares.

Quoting ScottB (Reply 22):
It's like shopping at Costco

But Costco still has some very expensive items, and they're obviously not meant for the person shopping for bulk jeans and cheap muffins.

Quoting ScottB (Reply 22):
Or a couple in Houston who might take a spur-of-the-moment trip to New Orleans for the weekend (and fly instead of drive because the ticket wasn't $500 each way).

Airlines can and do still match WN's price.



E pur si muove -Galileo
User currently offlineTom in NO From United States of America, joined Nov 1999, 7194 posts, RR: 35
Reply 24, posted (5 years 10 months 3 days 10 hours ago) and read 3148 times:

Quoting OPNLguy (Reply 10):
Sort of like today's airline industry...

Continuing in that vein.....

Bart: "Are we making money???"
Jim: "We're not sure.....are we Southwest?"

Tom at MSY

[Edited 2008-06-20 12:38:55]


"The criminal ineptitude makes you furious"-Bruce Springsteen, after seeing firsthand the damage from Hurricane Katrina
25 TxAgKuwait : Yes, and in so doing they lose buttloads of money. But nobody ever claimed that the managers of legacy airlines were smart.
26 Incitatus : Here is where this breaks down. Say Southwest starts charging a flat $242 per seat ISP-LAX. Then comes startup Generic Airlines paying one third of w
27 Post contains images EA CO AS : 1874.
28 MaverickM11 : Everyone is converging at this opint--I think legacies have probably posted more quarterly operating profits, ex fuel hedges, recently than WN.
29 ScottB : But it does. Ask people in the formerly captive US Airways markets what they thought of US's pricing in the 1990's. They do have expensive items, but
30 MaverickM11 : They never bothered to fly the competition. US wouldn't charge those fees if it didn't believe they could get them from someone, and again 99% of the
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