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Free Alcohol In UA's Transpac+intra-Asia Y Class?  
User currently offlineUnited Airline From Hong Kong, joined Jan 2001, 9168 posts, RR: 15
Posted (2 years 4 months 3 weeks 6 days 3 hours ago) and read 10208 times:

With the UA-CO merger, UA no longer offers free alcohol onboard its transpacific/intra-asia economy class. Why? Will they bring this back?

They took this off back in 2008 and reinstated it back in late 2009.

122 replies: All unread, showing first 25:
 
User currently offlineSuperfly From Thailand, joined May 2000, 39854 posts, RR: 74
Reply 1, posted (2 years 4 months 3 weeks 6 days 3 hours ago) and read 10198 times:

Quoting United Airline (Thread starter):
With the UA-CO merger, UA no longer offers free alcohol onboard its transpacific/intra-asia economy class. Why? Will they bring this back?

Are you sure about this?



Bring back the Concorde
User currently offlineDocGATTACA From Singapore, joined May 2011, 46 posts, RR: 0
Reply 2, posted (2 years 4 months 3 weeks 6 days 2 hours ago) and read 10160 times:

I'm pretty sure it was only on the pre-merger Continental aircraft that there was a charge for alcohol. I was under the impression that this had now been rationalized and that alcohol is now free on all UA trans-Pac flights.

Anyway, I can report back tomorrow since I will be flying EWR-HKG-SIN and will definitely have a drink or two.


User currently offlineSuperfly From Thailand, joined May 2000, 39854 posts, RR: 74
Reply 3, posted (2 years 4 months 3 weeks 6 days 2 hours ago) and read 10144 times:

Quoting DocGATTACA (Reply 2):
I'm pretty sure it was only on the pre-merger Continental aircraft that there was a charge for alcohol. I was under the impression that this had now been rationalized and that alcohol is now free on all UA trans-Pac flights.

I've flown United many times across the Pacific and there was always free booze.
I thought the only trans-Pacific carrier that charged for booze in coach was Delta.



Bring back the Concorde
User currently offlinepanamair From United States of America, joined Oct 2001, 4898 posts, RR: 25
Reply 4, posted (2 years 4 months 3 weeks 6 days 1 hour ago) and read 10062 times:
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Quoting DocGATTACA (Reply 2):
Continental aircraft that there was a charge for alcohol. I was under the impression that this had now been rationalized and that alcohol is now free on all UA trans-Pac flights.

The "new" United website states that there is a charge for alcohol now (i.e., following CO's Policy)

http://united.com/web/en-US/content/...avel/inflight/economy/default.aspx

However, it appears that in practice, sUA flights (e.g., SFO-HKG) are still offering free alcohol on trans-Pac, while sCO flights (e.g., EWR-HKG) are charging).

Quoting Superfly (Reply 3):
I thought the only trans-Pacific carrier that charged for booze in coach was Delta.

Delta has free beer, wine, and sake on all trans-Pac flights; cocktails and liquors however are US$7.


User currently offlineSuperfly From Thailand, joined May 2000, 39854 posts, RR: 74
Reply 5, posted (2 years 4 months 3 weeks 6 days 1 hour ago) and read 10006 times:

Quoting panamair (Reply 4):
cocktails and liquors however are US$7.

What a shame.  
Quoting panamair (Reply 4):
The "new" United website states that there is a charge for alcohol now (i.e., following CO's Policy)

That doesn't surprise me. I never hear of mergers that benefits customers and employees.



Bring back the Concorde
User currently offlineAngMoh From Singapore, joined Nov 2011, 483 posts, RR: 0
Reply 6, posted (2 years 4 months 3 weeks 5 days 23 hours ago) and read 9914 times:

Quoting panamair (Reply 4):
Delta has free beer, wine, and sake on all trans-Pac flights; cocktails and liquors however are US$7.


NW used to charge for all alcohol from about 2004 onward. Even before that their service was shit (a poor lady from China was yelled at by the 250 pound FA for having the audacity to ask for both a orange juice and a glass of wine as the same time - this was when they still served beer and wine for free - and she was told clearly that "it is company policy to only serve one drink per service...") I never flew them again. Stupid way to lose a customer...

Same for a colleague of mine: last time he came from BOS to SIN, he flew UA. He had one leg HKG-SIN on SQ and he was amazed that he had a proper meal and free drinks on just a 4 hour flight, but no decent service flying 14 hours ORD-HKG. Next month he is coming again but this time flying SQ/LH just because of food and drinks...


User currently offlinemax999 From United States of America, joined Dec 2005, 1039 posts, RR: 0
Reply 7, posted (2 years 4 months 3 weeks 5 days 23 hours ago) and read 9867 times:

Quoting panamair (Reply 4):
Delta has free beer, wine, and sake on all trans-Pac flights; cocktails and liquors however are US$7.

I believe this Delta policy applies to all of their intercontinental flights globally.



All the things I really like to do are either immoral, illegal, or fattening.
User currently offlinehb88 From United Kingdom, joined Sep 2005, 816 posts, RR: 31
Reply 8, posted (2 years 4 months 3 weeks 5 days 23 hours ago) and read 9857 times:

Paying for drinks? Good grief, no wonder hardly any US carriers can compete with the rest of the world in terms of service/quality in the cabin.

As for mergers, they're invariably a race to the bottom.


User currently offlineDocGATTACA From Singapore, joined May 2011, 46 posts, RR: 0
Reply 9, posted (2 years 4 months 3 weeks 5 days 18 hours ago) and read 9662 times:

Quoting panamair (Reply 4):
The "new" United website states that there is a charge for alcohol now (i.e., following CO's Policy)

http://united.com/web/en-US/content/...avel/inflight/economy/default.aspx

However, it appears that in practice, sUA flights (e.g., SFO-HKG) are still offering free alcohol on trans-Pac, while sCO flights (e.g., EWR-HKG) are charging).

That's rather unfortunate. I thought they would be trying to improve their on-board offering. Little things like that do leave an impression.


User currently offlineViscount724 From Switzerland, joined Oct 2006, 25154 posts, RR: 22
Reply 10, posted (2 years 4 months 3 weeks 5 days 15 hours ago) and read 9471 times:

Quoting max999 (Reply 7):
Quoting panamair (Reply 4):
Delta has free beer, wine, and sake on all trans-Pac flights; cocktails and liquors however are US$7.

I believe this Delta policy applies to all of their intercontinental flights globally.

On transatlantic routes, U.S. carriers are virtually the only ones that charge for any alcohoic drinks in Y class. Champagne is an exception but even that's free on AF. Air Berlin is the only significant European carrier I can thnk of that charges for alcoholic drinks in Y class on their U.S. routes. All alcoholic drinks (except Champagne) are also free on AC.


User currently offlinepanamair From United States of America, joined Oct 2001, 4898 posts, RR: 25
Reply 11, posted (2 years 4 months 3 weeks 5 days 14 hours ago) and read 9386 times:
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Quoting Viscount724 (Reply 10):
On transatlantic routes, U.S. carriers are virtually the only ones that charge for any alcohoic drinks in Y class. Champagne is an exception but even that's free on AF. Air Berlin is the only significant European carrier I can thnk of that charges for alcoholic drinks in Y class on their U.S. routes.

Finnair offers free beer and wine during mealtime on JFK and BKK flights in Y; all other times it has to be purchased. For the other long-haul destinations (PVG, PEK, NRT, KIX, ICN, etc.), beer and wine are free throughout, but other cocktails/liquors cost.

SAS is the other one that charges for alcohol in Y on long-haul: it is free during the pre-meal drink service and during the main meal; other times, it has to be purchased.

[Edited 2012-04-03 15:19:13]

[Edited 2012-04-03 15:19:54]

User currently offlineDavidYYC From Canada, joined Sep 2004, 238 posts, RR: 0
Reply 12, posted (2 years 4 months 3 weeks 5 days 10 hours ago) and read 9186 times:

Quoting panamair (Reply 11):
All alcoholic drinks (except Champagne) are also free on AC.

Sshhh! Dont give AC any ideas? Pretty soon they will "enhance" this, making us pay for this perk. Of course when it happens they will promote some aspect of it as an "enhancement", like better choice etc etc.


User currently offlineMaverickM11 From United States of America, joined Apr 2000, 17439 posts, RR: 46
Reply 13, posted (2 years 4 months 3 weeks 5 days 10 hours ago) and read 9186 times:

Quoting hb88 (Reply 8):
Good grief, no wonder hardly any US carriers can compete with the rest of the world in terms of service/quality in the cabin.

Give it a couple years; it'll change for the other carriers too.



E pur si muove -Galileo
User currently offlinejoeljack From United States of America, joined Feb 2005, 937 posts, RR: 0
Reply 14, posted (2 years 4 months 3 weeks 5 days 9 hours ago) and read 9129 times:

There is lots on this subject on Flyertalk.com. UA is still doing free alcohol across the pacific for old UA metal. For old Continental Metal, they do not serve free alcohol. This was a big factor in choosing PMUA metal over PMCO metal for my May trip to HKG. On a flight this long, I don't want to pay for alcohol or I'm going to fly somebody that provides it for free like NH!

User currently offlineUnited Airline From Hong Kong, joined Jan 2001, 9168 posts, RR: 15
Reply 15, posted (2 years 4 months 3 weeks 4 days 18 hours ago) and read 8842 times:

Quoting joeljack (Reply 14):
There is lots on this subject on Flyertalk.com. UA is still doing free alcohol across the pacific for old UA metal. For old Continental Metal, they do not serve free alcohol. This was a big factor in choosing PMUA metal over PMCO metal for my May trip to HKG. On a flight this long, I don't want to pay for alcohol or I'm going to fly somebody that provides it for free like NH!

So what will happen at the ultimate end when both airlines fully integrate? Will they still provide free alcohol onboard transpacific/intra asian economy flights?


User currently offlineTOMMY767 From United States of America, joined Aug 2003, 6584 posts, RR: 9
Reply 16, posted (2 years 4 months 3 weeks 4 days 18 hours ago) and read 8826 times:

Quoting panamair (Reply 4):

Why does PMCO cost money but PMUA free? It doesn't make any sense, they are officially one airline now.



"Folks that's the news and I'm outta here!" -- Dennis Miller
User currently offlinejoeljack From United States of America, joined Feb 2005, 937 posts, RR: 0
Reply 17, posted (2 years 4 months 3 weeks 4 days 18 hours ago) and read 8804 times:

Quoting United Airline (Reply 15):
So what will happen at the ultimate end when both airlines fully integrate? Will they still provide free alcohol onboard transpacific/intra asian economy flights?

Million dollar question. UA experimented around with charging for alcohol a few years back and United stated that it hurt bookings because Asians expect free alcohol. They reversed their policy and brought back the free booze. Hopefully the new UA has enough common sense to keep it free.

What kills me is that it's one airline now and yet they haven't aligned their services yet!


User currently offlineUnited Airline From Hong Kong, joined Jan 2001, 9168 posts, RR: 15
Reply 18, posted (2 years 4 months 3 weeks 4 days 6 hours ago) and read 8577 times:

Quoting joeljack (Reply 17):
Million dollar question. UA experimented around with charging for alcohol a few years back and United stated that it hurt bookings because Asians expect free alcohol. They reversed their policy and brought back the free booze. Hopefully the new UA has enough common sense to keep it free.

EVERYONE expects free alcohol on long haul flights. And every airline provides free alcohol on long haul flights except US airlines.


User currently offlinebobbypsp From United States of America, joined Oct 2004, 31 posts, RR: 0
Reply 19, posted (2 years 4 months 3 weeks 3 days 21 hours ago) and read 8387 times:
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I'm more interested that United is not offering a consistent product. Yes, it takes time with a merger, however this is very easy to implement. Charge or don't charge.

User currently offlineMaverickM11 From United States of America, joined Apr 2000, 17439 posts, RR: 46
Reply 20, posted (2 years 4 months 3 weeks 3 days 20 hours ago) and read 8354 times:

Quoting United Airline (Reply 18):
EVERYONE expects free alcohol on long haul flights. And every airline provides free alcohol on long haul flights except US airlines.

That's because there's much more competition in the US. You'll get there soon enough don't you worry .



E pur si muove -Galileo
User currently offlineAngMoh From Singapore, joined Nov 2011, 483 posts, RR: 0
Reply 21, posted (2 years 4 months 3 weeks 3 days 20 hours ago) and read 8323 times:

Quoting MaverickM11 (Reply 20):
That's because there's much more competition in the US. You'll get there soon enough don't you worry 

Because of competition, service levels are going up in Asia  
Something you probably can't comprehend....


User currently offlineMaverickM11 From United States of America, joined Apr 2000, 17439 posts, RR: 46
Reply 22, posted (2 years 4 months 3 weeks 3 days 20 hours ago) and read 8278 times:

Quoting AngMoh (Reply 21):
Something you probably can't comprehend....

It's no where near the level of the US. There's still tons of regulation and government owneship/meddling that has yet to really free up the markets but it's getting there. SQ/CX profits are way down, TG/MH are reeling, SQ is starting Scoot, JL/NH/QF/JQ are starting umpteen LCCs throughout the region. Believe me, you'll get there. Asia is a good 5-10 years behind the EU and they're finally enjoying the benefits/horrors of deregulation.

[Edited 2012-04-05 09:24:11]


E pur si muove -Galileo
User currently offlineEASTERN747 From United States of America, joined Oct 2006, 536 posts, RR: 0
Reply 23, posted (2 years 4 months 3 weeks 3 days 18 hours ago) and read 8186 times:

Well whether UA charges for drinks is meaningless. Just try and find a F/A to serve you. An hour after takeoff they seem to melt away until 30 minutes before landing. And that's in Business! Never again.

User currently offlineUnited Airline From Hong Kong, joined Jan 2001, 9168 posts, RR: 15
Reply 24, posted (2 years 4 months 3 weeks 2 days 19 hours ago) and read 7886 times:

Quoting MaverickM11 (Reply 22):
SQ/CX profits are way down, TG/MH are reeling, SQ is starting Scoot, JL/NH/QF/JQ are starting umpteen LCCs throughout the region. Believe me, you'll get there. Asia is a good 5-10 years behind the EU and they're finally enjoying the benefits/horrors of deregulation

CX posted a record high net profit/revenue last year. SQ and TG are still doing very well. Perhaps US airlines should learn from SQ and CX on how to run a top airline

Asian airlines compete severely too


User currently offlineViscount724 From Switzerland, joined Oct 2006, 25154 posts, RR: 22
Reply 25, posted (2 years 4 months 3 weeks 2 days 19 hours ago) and read 8173 times:

Quoting United Airline (Reply 24):
SQ and TG are still doing very well.

TG is doing very well? They reported a net loss of over $300 million for the year 2011 (10.2 billion Thai Baht).


User currently offlineMaverickM11 From United States of America, joined Apr 2000, 17439 posts, RR: 46
Reply 26, posted (2 years 4 months 3 weeks 2 days 18 hours ago) and read 8155 times:

Quoting United Airline (Reply 24):
Asian airlines compete severely too

Asian carriers benefit from much more state support and much less deregulation. There is no comparison, but the markets are freeing up.

Quoting United Airline (Reply 24):
Perhaps US airlines should learn from SQ and CX on how to run a top airline

Asia is likely to see only increases in competition, liberated markets, and costs, so while that once may have been true, EU and Asia carriers are going to look ever more toward US carriers to manage these growing challenges. And it's going to be *fantastic* to watch from the sidelines.



E pur si muove -Galileo
User currently offlinepenguins From United States of America, joined Mar 2010, 324 posts, RR: 0
Reply 27, posted (2 years 4 months 3 weeks 2 days 9 hours ago) and read 8194 times:

I flew UA from SFO to SYD and got free booze. Does this count as TransPac though? Another question of mine is, I flew UA from MEL-SYD at 8am in the morning. If I had flown at 6pm would I have received free drinks, let alone drinks at all.

User currently offlinetugger From United States of America, joined Apr 2006, 5506 posts, RR: 8
Reply 28, posted (2 years 4 months 3 weeks 2 days 9 hours ago) and read 8118 times:

Anyone who wants/supports free alcohol must also support no bag fees. After all who is willing to pay extra for a ticket so someone else can drink for free?

If you want it you should pay for it as it is a significant expense for an airline and it will also be an excellent source of additional revenue.

Tugg



I don’t know that I am unafraid to be myself, but it is hard to be somebody else. -W. Shatner
User currently offlineUnited Airline From Hong Kong, joined Jan 2001, 9168 posts, RR: 15
Reply 29, posted (2 years 4 months 3 weeks 2 days 7 hours ago) and read 8018 times:

Quoting Viscount724 (Reply 25):
TG is doing very well? They reported a net loss of over $300 million for the year 2011 (10.2 billion Thai Baht).

WOW how come?

Quoting MaverickM11 (Reply 26):
Asia is likely to see only increases in competition, liberated markets, and costs, so while that once may have been true, EU and Asia carriers are going to look ever more toward US carriers to manage these growing challenges. And it's going to be *fantastic* to watch from the sidelines.

I doubt SQ, CX, TG etc will charge for food/wine/drinks even in the long run.


User currently offlinemichman From United States of America, joined Dec 2006, 504 posts, RR: 0
Reply 30, posted (2 years 4 months 3 weeks 1 day 10 hours ago) and read 7732 times:

Quoting AngMoh (Reply 6):
NW used to charge for all alcohol from about 2004 onward

Not true. NW did not start charging for alcohol on trans-pacific flights until 2006. All alcohol remained free on NW trans-atlantic flights due to their JV agreement with KLM. After the merger, DL instituted the free beer/wine in coach policy (but charges for liquor).


User currently offlinemichman From United States of America, joined Dec 2006, 504 posts, RR: 0
Reply 31, posted (2 years 4 months 3 weeks 1 day 10 hours ago) and read 7725 times:

Quoting max999 (Reply 7):
I believe this Delta policy applies to all of their intercontinental flights globally.

Beer and wine are free in coach on Delta on international flights that are 6 hours or longer. The Economy Comfort pax get free liquor as well.


User currently offlinekfitz From , joined Dec 1969, posts, RR:
Reply 32, posted (2 years 4 months 3 weeks 1 day 9 hours ago) and read 7657 times:

Quoting tugger (Reply 28):
Anyone who wants/supports free alcohol must also support no bag fees. After all who is willing to pay extra for a ticket so someone else can drink for free? 

If you want it you should pay for it as it is a significant expense for an airline and it will also be an excellent source of additional revenue. 

Tugg

Oh really? So where does the unbundling stop and do we just admit a lot of it is quick talk from the company looking for a perfect line to spin cuts as "enhancements"? You know, for cuts that have a vauge amorphous relationship at best to the " price of a ticket"? It's a steep slope this one.


User currently offlineAvianca From Venezuela, joined Jan 2005, 5925 posts, RR: 40
Reply 33, posted (2 years 4 months 3 weeks 1 day 9 hours ago) and read 7647 times:

Quoting michman (Reply 31):
Beer and wine are free in coach on Delta on international flights that are 6 hours or longer.

I had even free beer on a ATL-CCS run and thats under 6 hours...


a shame an airline can not even provide a free beer or wine on long flights...

here in southamerica its still common to get on short internatoinal flights or even on domestic flights, free Beer and some other booze!

Cheers
Avianca



Colombia es el Mundo Y el Mundo es Colombia
User currently offlinecmf From , joined Dec 1969, posts, RR:
Reply 34, posted (2 years 4 months 3 weeks 1 day 9 hours ago) and read 7623 times:

Quoting MaverickM11 (Reply 26):
Asia is likely to see only increases in competition, liberated markets, and costs, so while that once may have been true, EU and Asia carriers are going to look ever more toward US carriers to manage these growing challenges. And it's going to be *fantastic* to watch from the sidelines.

While competition is set to increase there is nothing stating they must go about it the same way as US.

Quoting tugger (Reply 28):
If you want it you should pay for it as it is a significant expense for an airline and it will also be an excellent source of additional revenue.

Passengers already pay for it. The question is if it is included in the ticket or charged on top. What will happen depends on if enough airlines start charging it separably and ticket price difference to those who don't.

You may look at hotels as an example where many US hotels now include breakfast and often even drinks in the early evening to attract customers. Including internet access is another. Look at how Starbucks opened up Internet access to everyone. Look at how many resorts and cruises include "unlimited" meals.

Point is that it is well established that nickel and dime-ing very often isn't providing optimal return.


User currently offlinespacecadet From United States of America, joined Sep 2001, 3624 posts, RR: 12
Reply 35, posted (2 years 4 months 3 weeks 1 day 5 hours ago) and read 7535 times:

Quoting tugger (Reply 28):
If you want it you should pay for it as it is a significant expense for an airline and it will also be an excellent source of additional revenue.

And this is why fares on Asian carriers are typically more expensive. But guess what? People pay, because you get what you pay for. On the JFK-NRT route that I fly a couple times a year, the Japanese carriers always do well while the US carriers are constantly struggling. The Japanese carriers can fill a plane that's 80% business class and still manage to make money off economy class passengers even giving away free booze. The American carriers, by contrast, can't fill up planes on this route at any price, to the point that Northwest - which had a hub in Narita - had to withdraw from the route until they got bought by Delta. And it's because the service on the US carriers is so, so inferior.



I'm tired of being a wanna-be league bowler. I wanna be a league bowler!
User currently offlineAngMoh From Singapore, joined Nov 2011, 483 posts, RR: 0
Reply 36, posted (2 years 4 months 3 weeks 1 day 4 hours ago) and read 7510 times:

Quoting spacecadet (Reply 35):
Quoting tugger (Reply 28):
If you want it you should pay for it as it is a significant expense for an airline and it will also be an excellent source of additional revenue.

And this is why fares on Asian carriers are typically more expensive. But guess what? People pay, because you get what you pay for.

  

Airlines have lots of expenses but wine or beer is not a significant expense. A can of beer is probably 30 cents in bulk duty free. And if I drink a coke instead of beer, they save maybe 10 cents. The cost of a glass of wine is probably 10 -20 cents above the cost of a glass of orange juice (keep in mind that the glasses used are much smaller than standard wine glasses). The problem is that some idiot probably came up with a great calculation of how much extra revenue they would get selling beer instead of giving it away, but that idiot forgot (or deliberately left out) how much advertising and how much fare reduction is required to offset the reduction in customer satisfaction this creates.


User currently offlinerunzel From Australia, joined Dec 2011, 26 posts, RR: 0
Reply 37, posted (2 years 4 months 3 weeks 22 hours ago) and read 7389 times:

It seems that the OP's intent was to North Pacific so maybe I'm drifting somewhat off-topic, but recent experience on SYD-LAX&;v.v. plus SYD-SFO&v.v. on UA leads me to think that UA is prepping us for payment for alcohol, or further restriction of services. To be told that I had already had a drink, and that I must wait another hour before additional service would be allowed; and not just this pax, several others in earshot similarly advised, and warned that other cabin crew had been informed of our temerity in seeking such accellerated service frequency.

It would be thought that being crammed into what must be the shortest seat-pitch, oldest seats and practically non-existent IFE, even on otherwise delightful 744s, UA would smarten up cabin services, rather than the latter.

Experiencing the deterioration in customer amenities in Y, it must be close to time to restrict flights in Y on UA to shorthaul only. Economy+ - when available - at circa USD150 per sector is no longer good value.

Has anyone else had similar experiences?

[Edited 2012-04-08 07:20:45]

[Edited 2012-04-08 07:23:26]

User currently offlinehhslax2 From Bahrain, joined Jan 2012, 123 posts, RR: 0
Reply 38, posted (2 years 4 months 3 weeks 17 hours ago) and read 7305 times:

Quoting runzel (Reply 37):
To be told that I had already had a drink, and that I must wait another hour before additional service would be allowed;

I got told this on UA flight 3 years ago from IAD to SAN on a 3 class 763. The FA said that UA policy was one drink per hour. That was the only time I had ever heard/seen this policy. The FA also found out that you should not say that to a GS in J, as she was promptly moved back to the Y cabin by the purser. I was then given 2 drinks and a $250 voucher for my inconvenience.


User currently offlineAeroWesty From United States of America, joined Oct 2004, 20534 posts, RR: 62
Reply 39, posted (2 years 4 months 3 weeks 13 hours ago) and read 7210 times:

Quoting runzel (Reply 37):
Has anyone else had similar experiences?

Not on UA, but on KLM flying AMS-LAX some years ago. After the meal service, liqueurs were served from full-sized bottles on a cart in Y. When the FA was heading back through the cabin to the galley to close up and store the cart, she declined every refill request with a response of "no, you've had enough for now."

Personally, I don't mind paying for a cocktail in Y. I don't drink much, so the price is nominal. Free beer and wine during meal services confirms a certain level of hospitality from an airline that doesn't cost them that much. It is usually positively received, which in turn builds goodwill.



International Homo of Mystery
User currently offlineMaverickM11 From United States of America, joined Apr 2000, 17439 posts, RR: 46
Reply 40, posted (2 years 4 months 3 weeks 7 hours ago) and read 7037 times:

Quoting United Airline (Reply 29):
I doubt SQ, CX, TG etc will charge for food/wine/drinks even in the long run.

Perhaps not for longhaul. Those three carriers have a lot more leeway in terms of government support and weaker labor protections so cost cutting is not as fraught with tradeoffs.

Quoting Avianca (Reply 33):
here in southamerica its still common to get on short internatoinal flights or even on domestic flights, free Beer and some other booze!

South America has even less competition and more protection than most bits of Asia.

Quoting cmf (Reply 34):

While competition is set to increase there is nothing stating they must go about it the same way as US.

Unless they find some new way to increase revenue or lower costs that no one else has tried before, it's pretty much going to pan out the same way the US did and the EU is doing.



E pur si muove -Galileo
User currently offlineLJ From Netherlands, joined Nov 1999, 4418 posts, RR: 0
Reply 41, posted (2 years 4 months 3 weeks 2 hours ago) and read 6900 times:

Quoting MaverickM11 (Reply 40):
Unless they find some new way to increase revenue or lower costs that no one else has tried before, it's pretty much going to pan out the same way the US did and the EU is doing.

However no EU airline will start charging for alcohol in Y for long haul flights... It's becoming very clear that comeptition on Europe - Asia is between the European, Asian and Middle Eastern Airlines, where the Middle Eastern airlines have high service agains low prices as their unique selling point. Thus EU airlines can't reduce service in Y or risk losing the Y pax, which isn't always low yield as some Y class pax pay a lot of money for their flights. Thus, EU airlines have no choice but to offer descent service against competitive prices on long haul or else the Y pax will go to the Middle Eastern airlines.

Quoting MaverickM11 (Reply 26):

Asia is likely to see only increases in competition, liberated markets, and costs, so while that once may have been true,

That means you assumes that Asia will liberate their markets. However, that's not a given (and not in the interest of many government officials).


User currently offlinecmf From , joined Dec 1969, posts, RR:
Reply 42, posted (2 years 4 months 3 weeks ago) and read 6848 times:

Quoting MaverickM11 (Reply 40):
Unless they find some new way to increase revenue or lower costs that no one else has tried before, it's pretty much going to pan out the same way the US did and the EU is doing.

With all due respect put the focus on just revenue and cost pretty much summarize the problem with (typical) US business mentality.

Reality is that the actual cost and revenue are not important.

What is important is to have in demand product and price combination at cost and volume to make the company viable.

Reducing the formula to just two elements is a big part of the US, and increasingly EU, problem.


User currently offlinepanamair From United States of America, joined Oct 2001, 4898 posts, RR: 25
Reply 43, posted (2 years 4 months 2 weeks 6 days 23 hours ago) and read 6807 times:
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Quoting LJ (Reply 41):
However no EU airline will start charging for alcohol in Y for long haul flights.

Both AY and SK already do have some sort of pay-for-alcohol system on their long-haul flights to Asia and the U.S. in Y (see my post #11 above) today...


User currently offlinerogercamel From Singapore, joined Feb 2012, 87 posts, RR: 0
Reply 44, posted (2 years 4 months 2 weeks 6 days 23 hours ago) and read 6805 times:

Quoting MaverickM11 (Reply 40):
Unless they find some new way to increase revenue or lower costs that no one else has tried before, it's pretty much going to pan out the same way the US did and the EU is doing.

My experience with intra-Asian flying is that the full service airlines are improving their service levels to justify the price difference, rather than reducing service to compete on price. (Both VN and MI have improved their food offering in the two years that I've been here).

As for me, I'll happily pay a little for a beer if it saves a lot on the ticket. The trouble is, it rarely does save that much on the ticket.


User currently offlineMaverickM11 From United States of America, joined Apr 2000, 17439 posts, RR: 46
Reply 45, posted (2 years 4 months 2 weeks 6 days 22 hours ago) and read 6787 times:

Quoting LJ (Reply 41):
It's becoming very clear that comeptition on Europe - Asia is between the European, Asian and Middle Eastern Airlines, where the Middle Eastern airlines have high service agains low prices as their unique selling point.

US carriers have been competing with European/Asian/Latin/African carriers that have higher service standards and still manage to turn out profitable quarters on generally increasing international flying. Moreover, US/EU carriers offer something to their home populations that Asian/Middle Eastern carriers cannot: nonstop flights--something people do pay a premium for.

Quoting LJ (Reply 41):
That means you assumes that Asia will liberate their markets. However, that's not a given (and not in the interest of many government officials

Perhaps, although I think the cat is out of the bag with Air Asia expanding everywhere, and many Asian carriers trying strategies that failed 10-20 years ago in the US: carrier-within-a-carrier.

Quoting cmf (Reply 42):
What is important is to have in demand product and price combination at cost and volume to make the company viable.

Como? That's just a verbose way of saying it comes down to revenue and cost.

Quoting panamair (Reply 43):
Both AY and SK already do have some sort of pay-for-alcohol system on their long-haul flights to Asia and the U.S. in Y (see my post #11 above) today...

   *and* they're both total financial basket cases...

Quoting rogercamel (Reply 44):
My experience with intra-Asian flying is that the full service airlines are improving their service levels to justify the price difference, rather than reducing service to compete on price.

It's going to take a lot of trial and error, but they too will realize the growing middle class and really the majority of travelers aren't willing to pay extra for a TV dinner on a plane, just like everyone else on earth.



E pur si muove -Galileo
User currently offlineAngMoh From Singapore, joined Nov 2011, 483 posts, RR: 0
Reply 46, posted (2 years 4 months 2 weeks 6 days 22 hours ago) and read 6770 times:

Quoting rogercamel (Reply 44):
As for me, I'll happily pay a little for a beer if it saves a lot on the ticket. The trouble is, it rarely does save that much on the ticket.

And that is the core of the issue. Transpacific tickets on US airlines are not cheap. They are cheaper, but not enough to offset the agony of an old hard product (especially in Y) with no service. This is especially true for flexible tickets where Asia airlines have the additional benefits of better refundability and rebooking terms. And especially if the company pays and not one's own pocket, you go for the Asian airline. And this is also true for Asia to Europe, but in this case the gap is a lot smaller.


User currently offlinecmf From , joined Dec 1969, posts, RR:
Reply 47, posted (2 years 4 months 2 weeks 6 days 21 hours ago) and read 6733 times:

Quoting MaverickM11 (Reply 45):
Como? That's just a verbose way of saying it comes down to revenue and cost.

Not at all. It is that mentality that creates the mistake of thinking charging for every identifiable detail and bringing down cost to bare minimum is always the optimal solution.

If you must break it down to less variables it should be to; have the right product.


User currently offlineMaverickM11 From United States of America, joined Apr 2000, 17439 posts, RR: 46
Reply 48, posted (2 years 4 months 2 weeks 6 days 8 hours ago) and read 6584 times:

Quoting cmf (Reply 47):
It is that mentality that creates the mistake of thinking charging for every identifiable detail and bringing down cost to bare minimum is always the optimal solution.

No, it simply means your revenues have to cover your costs, by whatever means necessary. As costs rise across the EU/Pacific carriers and revenues are pushed down by competition, something has to change, whether it's charging for extras or asking your pilots to volunteer for unpaid leave like SQ .



E pur si muove -Galileo
User currently offlineSuperfly From Thailand, joined May 2000, 39854 posts, RR: 74
Reply 49, posted (2 years 4 months 2 weeks 6 days 8 hours ago) and read 6547 times:

Quoting cmf (Reply 34):
Point is that it is well established that nickel and dime-ing very often isn't providing optimal return.

When I feel that a company is cutting corners and nickel & dime-ing me then I go the competition that provides better service.

Quoting spacecadet (Reply 35):
And this is why fares on Asian carriers are typically more expensive. But guess what? People pay, because you get what you pay for. On the JFK-NRT route that I fly a couple times a year, the Japanese carriers always do well while the US carriers are constantly struggling. The Japanese carriers can fill a plane that's 80% business class and still manage to make money off economy class passengers even giving away free booze. The American carriers, by contrast, can't fill up planes on this route at any price, to the point that Northwest - which had a hub in Narita - had to withdraw from the route until they got bought by Delta. And it's because the service on the US carriers is so, so inferior.

Believe it or not but the Asian carriers are often the same price and in some cases, cheaper.
If you add the cost of luggage, drinks and God-forbid - have to make changes to your tickets, the cost of a US carrier will far exceed what the Asian carriers are charging.
If I'm paying almost $2000, flying 20 hours across the Pacific Ocean, it makes more sense to just pay the cost of one ticket and not worry about extra fees being tacked on.
It's sad to see US carriers behave like the telephone company or a bank with all of their extra hidden fees.

Quoting AngMoh (Reply 36):
Airlines have lots of expenses but wine or beer is not a significant expense. A can of beer is probably 30 cents in bulk duty free. And if I drink a coke instead of beer, they save maybe 10 cents. The cost of a glass of wine is probably 10 -20 cents above the cost of a glass of orange juice (keep in mind that the glasses used are much smaller than standard wine glasses). The problem is that some idiot probably came up with a great calculation of how much extra revenue they would get selling beer instead of giving it away, but that idiot forgot (or deliberately left out) how much advertising and how much fare reduction is required to offset the reduction in customer satisfaction this creates.

  

Quoting rogercamel (Reply 44):
My experience with intra-Asian flying is that the full service airlines are improving their service levels to justify the price difference, rather than reducing service to compete on price. (Both VN and MI have improved their food offering in the two years that I've been here).

You even get free meals on a 25 minute short hop from Chiang Mai to Pai and Mae Hong Song on a Nok Air Cessna 208 Caravan.

Quoting AngMoh (Reply 46):
And that is the core of the issue. Transpacific tickets on US airlines are not cheap. They are cheaper, but not enough to offset the agony of an old hard product (especially in Y) with no service.

I was shocked to see how much Delta charges for their flights to Asia. I had a friend of mine from LA visit me last year and he actually paid $200 more than what Thai Airways was charging. He had no idea he could have got a non-stop from LAX to BKK. He also had to pay extra for his luggage. The arrival & departure time in to BKK on Delta was terrible. They come in and leave under the cloak of darkness. The average fare on Thai is $2200 (although I've seen it for less) and he paid $2400 for his ticket. I told him to have me book his ticket next time.
He wanted to stay for an extra 3 days but the cost in fees would have been almost as much as a new ticket.


I once had to make changes to my flight on Philippines Airlines and I only had to pay $30 in fees.
A few years ago, I had to make changes to my flight on Aeroflot and didn't have to pay extra at all.



Bring back the Concorde
User currently offlinecmf From , joined Dec 1969, posts, RR:
Reply 50, posted (2 years 4 months 2 weeks 5 days 21 hours ago) and read 6390 times:

Quoting MaverickM11 (Reply 48):
No, it simply means your revenues have to cover your costs



If that isn't a natural in the back of your head at all times you will never be able to run a successful business.

Quoting MaverickM11 (Reply 48):
necessary. As costs rise across the EU/Pacific carriers and revenues are pushed down by competition, something has to change, whether it's charging for extras or asking your pilots to volunteer for unpaid leave like SQ .

I.e. the solution isn't in looking at revenue or cost. The solution is to look at the product and how it is provided. Looking beyond the MBA's charts there is the real world where the fingertip feeling for what is right is needed. It is art, not science.

McDonald's is a very viable business but it isn't the model for every restaurant. Many of the US policies can't even be implemented in many other places. For example, you can't tell people to go home without pay because the last 15 minutes sale wasn't high enough.

The most profit generating restaurants use very different models.

Personally I hope airlines are smart enough to not use the US aviation model that, let's face it, has not been very successful.


User currently offlineMaverickM11 From United States of America, joined Apr 2000, 17439 posts, RR: 46
Reply 51, posted (2 years 4 months 2 weeks 5 days 19 hours ago) and read 6332 times:

Quoting cmf (Reply 50):
The solution is to look at the product and how it is provided. Looking beyond the MBA's charts there is the real world where the fingertip feeling for what is right is needed. It is art, not science.

No, you still run into the same problem: airlines have to cover their costs, regardless of whether you're trying to be McDonald's or Le Cirque.

Quoting cmf (Reply 50):
Personally I hope airlines are smart enough to not use the US aviation model that, let's face it, has not been very successful.

That is because it has been going through decades of creative destruction that the EU is just beginning to grapple with, with Asia a good 5-10 years behind it, and Latin America and Africa even farther behind.



E pur si muove -Galileo
User currently offlineIrishAyes From United States of America, joined Jan 2008, 2183 posts, RR: 15
Reply 52, posted (2 years 4 months 2 weeks 5 days 18 hours ago) and read 6275 times:

Quoting tugger (Reply 28):
If you want it you should pay for it as it is a significant expense for an airline and it will also be an excellent source of additional revenue.

Seriously?? Beer and wine cost the airline next to nothing. When I flew to GRU in DL Y last January, the "wine" they served us was legit BOXED wine.

When I forked over $7 for a small bottle of wine on a domestic AA flight last month, I remember seeing the same bottle at the CVS in downtown Chicago the following day. Same brand, same label, offering 10 bottles for $10. I was pissed.

Charging for beer and wine on transatlantic flights is NOT akin to charging for bags. It is more on the level of charging for IFE, which is free on all long-haul flights for US carriers, and therefore beer and wine should be as well.

I agree, however, that cocktails and champagne are worthy of charges in discounted fare classes because they are more expensive to provide.

CO is also notoriously stingy about drinks. I asked for the can, and received some pretty nasty body language in response, although they (because this is happened on multiple occasions) fulfilled the request. I mean, come on, these things cost the airline PENNIES. That has never happened to me on UA.

Embarrassing that this merger is anything but a merger of equals.

Quoting AngMoh (Reply 36):
Airlines have lots of expenses but wine or beer is not a significant expense. A can of beer is probably 30 cents in bulk duty free. And if I drink a coke instead of beer, they save maybe 10 cents. The cost of a glass of wine is probably 10 -20 cents above the cost of a glass of orange juice (keep in mind that the glasses used are much smaller than standard wine glasses). The problem is that some idiot probably came up with a great calculation of how much extra revenue they would get selling beer instead of giving it away, but that idiot forgot (or deliberately left out) how much advertising and how much fare reduction is required to offset the reduction in customer satisfaction this creates.

   if even AA has figured this out on its int'l long-haul flights, then surely you'd think that UA would as well!!!



next flights: jfk-icn, icn-hkg-bkk-cdg, cdg-phl-msp
User currently offlineMaverickM11 From United States of America, joined Apr 2000, 17439 posts, RR: 46
Reply 53, posted (2 years 4 months 2 weeks 5 days 18 hours ago) and read 6228 times:

Quoting IrishAyes (Reply 52):
That has never happened to me on UA.

They charged for wine and wifi in their clubs. And remember when they wanted to charge for meals on Transatlantic flights?



E pur si muove -Galileo
User currently offlineordjoe From United States of America, joined Aug 2010, 699 posts, RR: 0
Reply 54, posted (2 years 4 months 2 weeks 5 days 17 hours ago) and read 6159 times:

Quoting AngMoh (Reply 36):
Airlines have lots of expenses but wine or beer is not a significant expense. A can of beer is probably 30 cents in bulk duty free. And if I drink a coke instead of beer, they save maybe 10 cents. The cost of a glass of wine is probably 10 -20 cents above the cost of a glass of orange juice (keep in mind that the glasses used are much smaller than standard wine glasses). The problem is that some idiot probably came up with a great calculation of how much extra revenue they would get selling beer instead of giving it away, but that idiot forgot (or deliberately left out) how much advertising and how much fare reduction is required to offset the reduction in customer satisfaction this creates.

Sort of playing devils advocate, but how much extra fuel gets burned to carry these heavy drinks.


User currently offlinecmf From , joined Dec 1969, posts, RR:
Reply 55, posted (2 years 4 months 2 weeks 5 days 8 hours ago) and read 6015 times:

Quoting MaverickM11 (Reply 51):
No, you still run into the same problem: airlines have to cover their costs, regardless of whether you're trying to be McDonald's or Le Cirque.

Caring about more than revenue and cost does not mean ignoring those two. It should have been very clear from my earlier posts.

My objection is about reducing the problem to just those two. Doing so setup short term gains and long term disaster. Sure you can push maintenance and for a short while you'll show better results because of lower cost but soon enough it can't be pushed anymore and then you almost always have a higher bill than if you had done it per normal schedule.

Same goes for investing in new aircraft, new hard product and so on.

If you start to charge for something that customers have come to expect to be included you better show that they feel they get something for it or that all other competition do the same or you will start loosing customers as they find the better deals.

The number of companies that have failed because management is just looking at revenue and costs but fail to look at product and market is a sad list.

This is why what you called the verbose version is so important. It isn't the same thing. The additional areas are important to keep customers and with them the company around for more than a short while.

Quoting MaverickM11 (Reply 51):
That is because it has been going through decades of creative destruction that the EU is just beginning to grapple with, with Asia a good 5-10 years behind it, and Latin America and Africa even farther behind.

Not that simple.


User currently offlinekfitz From , joined Dec 1969, posts, RR:
Reply 56, posted (2 years 4 months 2 weeks 5 days 8 hours ago) and read 6024 times:

With more and more of CO's "revenue maximizing" policies being brought to S-UA, I wouldn't be surprised in the least if the free booze is terminated. Recall the s-CO no pillows in domestic F policy which was brought to S-UA. The no complimentary BOB box for F passengers policy. What about the no full can of soda unless specified (a policy s-CO only shared with WN)?

User currently offlineSuperfly From Thailand, joined May 2000, 39854 posts, RR: 74
Reply 57, posted (2 years 4 months 2 weeks 5 days 8 hours ago) and read 6005 times:

I understand that airlines need to make profits but the cost cutting measures shouldn't be felt by the customer. Nickel & dime-ing your customers is a sure way to drive them to the competition.
I keep reading here that airlines in Asia enjoy more government subsidies and are able to provide superior service.
My question is, how much salary do the top execs at the Asian carriers earn compared to their American counterparts?
My guess is that the top execs at SQ, TG, CX and CI don't make as much as the top execs at Delta and CO/UA.



Bring back the Concorde
User currently offlinefxramper From United States of America, joined Dec 2005, 7263 posts, RR: 85
Reply 58, posted (2 years 4 months 2 weeks 5 days 8 hours ago) and read 6010 times:
Support Airliners.net - become a First Class Member!

Nothing is free on the new United. The cost of free booze is built into the pricing structure of the new ticket cost on any international ticket. You could drink yourself into coma and UA will still make money off you.

User currently offlineMaverickM11 From United States of America, joined Apr 2000, 17439 posts, RR: 46
Reply 59, posted (2 years 4 months 2 weeks 5 days 7 hours ago) and read 5979 times:

Quoting Superfly (Reply 57):
My guess is that the top execs at SQ, TG, CX and CI don't make as much as the top execs at Delta and CO/UA.

In 2011 it was quite the reverse. The CEO of CX made nearly $10MM in 2011
http://investing.businessweek.com/re...sp?personId=33842143&ticker=293:HK
versus $8MM for Richard Anderson
http://investing.businessweek.com/re....asp?personId=331864&ticker=DAL:US
and just over $4M for Jeff Smisek
http://investing.businessweek.com/re....asp?personId=331864&ticker=DAL:US

Quoting cmf (Reply 55):
The number of companies that have failed because management is just looking at revenue and costs but fail to look at product and market is a sad list.

They can look at only the numbers, or they can look at the threadcount of the carpet. No matter what, it has to be a viable business in the long run, which means revenues are greater than costs.

Quoting cmf (Reply 55):
Not that simple.

It is and it will be. People around the world look for the same things in the same order when buying a ticket, and for the vast majority of them product is way proven over and over to be behind schedule and price.



E pur si muove -Galileo
User currently offlineUnited Airline From Hong Kong, joined Jan 2001, 9168 posts, RR: 15
Reply 60, posted (2 years 4 months 2 weeks 5 days 5 hours ago) and read 5940 times:

Quoting MaverickM11 (Reply 53):

They charged for wine and wifi in their clubs. And remember when they wanted to charge for meals on Transatlantic flights?

Real asshole. Within the US all clubs charge for alcohol. Outside the US everything is free even for US airline clubs.

No wonder all US airlines are in the shits. They still don't understand and start to learn from CX, BA, SQ etc


User currently offlinehhslax2 From Bahrain, joined Jan 2012, 123 posts, RR: 0
Reply 61, posted (2 years 4 months 2 weeks 5 days 4 hours ago) and read 5884 times:

Quoting United Airline (Reply 60):
Within the US all clubs charge for alcohol.

Are you sure? I thought Delta's Crown Rooms had free booze. At least that's what I remember from 6 years ago.


User currently offlinecmf From , joined Dec 1969, posts, RR:
Reply 62, posted (2 years 4 months 2 weeks 4 days 23 hours ago) and read 5813 times:

Quoting MaverickM11 (Reply 59):
They can look at only the numbers, or they can look at the threadcount of the carpet. No matter what, it has to be a viable business in the long run, which means revenues are greater than costs.

You display the US problem very well. Repeating the revenue/cost mantra over and over and ignoring everything else.

Again, there is no question about revenue must be higher than cost for a viable business. It is not in question so no need to state it again.

What is questioned is the obsessive focus on revenue and cost at the loss of the product. Ignoring the product means that over time revenue will disappear. Without revenue your costs will quickly not be supported and you see the negative circle we have seen so often in US and sadly more frequently in other places.

Quoting MaverickM11 (Reply 59):
It is and it will be. People around the world look for the same things in the same order when buying a ticket, and for the vast majority of them product is way proven over and over to be behind schedule and price.

Schedule is part of the product, as is price. That people look for the same doesn't mean companies should provide the same product. If so we would have just one restaurant, one car, one tv channel, etc.

So no, it is not as simple as you try to make it. The world is multi-dimensional. Reducing it to just one or two dimensions means you lose sight of the total, and make bad decisions.


User currently offlineshufflemoomin From Denmark, joined Jun 2010, 478 posts, RR: 2
Reply 63, posted (2 years 4 months 2 weeks 4 days 23 hours ago) and read 5811 times:

Quoting panamair (Reply 11):
SAS is the other one that charges for alcohol in Y on long-haul: it is free during the pre-meal drink service and during the main meal; other times, it has to be purchased.

Don't think that's correct. Each time I've flown CPH-EWR recently, I've always asked for a beer during any drink service and never once paid for it.


User currently offlinerogercamel From Singapore, joined Feb 2012, 87 posts, RR: 0
Reply 64, posted (2 years 4 months 2 weeks 4 days 22 hours ago) and read 5777 times:

Surely charging for alcohol is a completely false economy on long haul flights?

Let's say a trans-pac ticket costs $2000. Charging for alcohol causes you to lose 1 pax. You then need to sell 200 drinks (across both flights admitedly) at $10 just to get the lost ticket revenue back - and you still haven't covered the cost of the drink itself!

Alcohol is ultimately an 'extra' revenue line - you need to have a good enough product to attract the core revenue (ticket sales) and that core product is enhanced by free alcohol.


User currently offlineUnited Airline From Hong Kong, joined Jan 2001, 9168 posts, RR: 15
Reply 65, posted (2 years 4 months 2 weeks 4 days 18 hours ago) and read 5704 times:

US airlines=all about cut this cut that charge this charge that. They are too stupid to understand. European/Asian airlines are way better.

User currently offlineViscount724 From Switzerland, joined Oct 2006, 25154 posts, RR: 22
Reply 66, posted (2 years 4 months 2 weeks 4 days 12 hours ago) and read 5626 times:

Quoting hhslax2 (Reply 61):
Quoting United Airline (Reply 60):
Within the US all clubs charge for alcohol.

Are you sure? I thought Delta's Crown Rooms had free booze. At least that's what I remember from 6 years ago.

It's still free according to the DL website. The name was changed from Crown Room to Sky Club some time ago.


User currently offlineMaverickM11 From United States of America, joined Apr 2000, 17439 posts, RR: 46
Reply 67, posted (2 years 4 months 2 weeks 3 days 22 hours ago) and read 5500 times:

Quoting cmf (Reply 62):
Repeating the revenue/cost mantra over and over and ignoring everything else.

I'm not ignoring everything else, however everything else still has to fit in the confines of economic reality.

Quoting United Airline (Reply 65):
US airlines=all about cut this cut that charge this charge that. They are too stupid to understand. European/Asian airlines are way better.

Which is going to make it even more exciting when SQ finds itself hammered between EK on one side and Jetstar/AirAsia/Scoot on the other...

Quoting cmf (Reply 62):
Schedule is part of the product, as is price

No it is not. They are three very distinct things; people change their behavior based on schedule or price, but product simply does not drive the premiums or buying decisions that a.net think they do, and this will be amplified over the coming years as competition grows and barriers to entry fall.



E pur si muove -Galileo
User currently offlineIrishAyes From United States of America, joined Jan 2008, 2183 posts, RR: 15
Reply 68, posted (2 years 4 months 2 weeks 1 day 12 hours ago) and read 5344 times:

What about India flights? I am assuming UA will charge on EWRDEL for example because it is a former CO flight...grrrrr


next flights: jfk-icn, icn-hkg-bkk-cdg, cdg-phl-msp
User currently offlineCO777DAL From United States of America, joined Feb 2007, 613 posts, RR: 0
Reply 69, posted (2 years 4 months 2 weeks 1 day 9 hours ago) and read 5267 times:

Quoting IrishAyes (Reply 68):

What about India flights? I am assuming UA will charge on EWRDEL for example because it is a former CO flight...grrrrr

All sCO flights charge for alcohol.



Worked Hard. Flew Right. Farewell, Continental. Thanks for the memories.
User currently offlinerunzel From Australia, joined Dec 2011, 26 posts, RR: 0
Reply 70, posted (2 years 4 months 2 weeks 1 day 7 hours ago) and read 5205 times:

When I stuck my nose into this topic (reply 37) I apologised for drifting off-topic. However I neglected to emphasise that the major component of my concern was the service aspect involved. I seek your forgiveness and indulgence.

Despite the attention given (rightly) to whether or not Y pax should pay for alcoholic drinks, as revealed in this thread, so my concern remains. In one of the specific instances with UA to which I earlier made reference, I was refused service of not an alcoholic beverage, but of any beverage at all. The FA triumphantly pointed to my plastic beaker, containing perhaps 40ml of watery dregs, as justification for her arbitrary action.

Is it possible for any airline, operating an international sector in excess of two hours gate-to-gate, to - with a straight face - justify denial of service of drinks on the basis of costs of supply? As the answer cannot be other than in the negative, what is the real reason for such apparent parsimony?

We are blessed with sufficient regulations, to adequately protect us from behavioural transgressions by any passenger(s), adversely affected by any subsequent, increased alcoholic availability. So I believe.


User currently offlinemichman From United States of America, joined Dec 2006, 504 posts, RR: 0
Reply 71, posted (2 years 4 months 2 weeks 1 day 7 hours ago) and read 5192 times:

Quoting Viscount724 (Reply 66):
It's still free according to the DL website. The name was changed from Crown Room to Sky Club some time ago.

Yes, DL still has free booze in the Sky Clubs. They've introduced a "Luxury Bar" concept in a number of lounges and charge for the higher end alcohol. But they still have an assortment of free stuff.


User currently offlineDocpepz From Singapore, joined May 2001, 1971 posts, RR: 3
Reply 72, posted (2 years 4 months 2 weeks 1 day 6 hours ago) and read 5171 times:

It is not fair at all to compare UA or AA within the US to SQ and CX. Of the nearly 100 destinations that SQ/Silk Air fly to, how many destinations does SQ alone fly to within a 3 hour radius:

Ho Chi Minh City
Jakarta
Bali
Bangkok

SQ and Silk Air jointly serve:

KUL
Hanoi (from Jun)

I haven't included Manila because it's slightly more than 3 hours (Actually Hanoi is too, but let's leave it there)

So on its own metal alone, SQ only serves 4 destinations within 3 hours, and with Silk Air serve another 2 more. AA from its DFW hub would serve the entire USA just about within 3 hours. And that's hundreds of destinations at high frequencies.

It's thus not fair to compare SQ's widebody shorthaul operations under 3 hours (Just 4 of about 100 Group destinations) compared to AA, UA or DL.


User currently offlineSuperfly From Thailand, joined May 2000, 39854 posts, RR: 74
Reply 73, posted (2 years 4 months 2 weeks 1 day 5 hours ago) and read 5137 times:

Quoting Docpepz (Reply 72):

I see your point but how come my 2 hour flight on Singapore Airlines from BKK to SIN in coach was better than the 12.5 hour flight between SFO to NRT in coach?



Bring back the Concorde
User currently offlinecmf From , joined Dec 1969, posts, RR:
Reply 74, posted (2 years 4 months 2 weeks 1 day 1 hour ago) and read 5053 times:

Quoting MaverickM11 (Reply 67):
I'm not ignoring everything else, however everything else still has to fit in the confines of economic reality.

Why are you going on about the economics when I have agreed it is important and must be included?

The issue is that you're downplaying the product. The product is what is being sold. It doesn't matter if your revenue and cost projections look good if people stop buying it. You can't downplay or take the product out of the equation. It is the central part tying everything else together. Change it and everything else changes. Unlike revenue and cost that can change in isolation.

If anything US (as total because there are islands of good) is an example of what not to do. Absolutely not something to follow, as you suggested in post 26.


User currently offlineAngMoh From Singapore, joined Nov 2011, 483 posts, RR: 0
Reply 75, posted (2 years 4 months 2 weeks 1 day ago) and read 5022 times:

Quoting Superfly (Reply 73):
I see your point but how come my 2 hour flight on Singapore Airlines from BKK to SIN in coach was better than the 12.5 hour flight between SFO to NRT in coach?

Because you flew the wrong airline SFO to NRT   Should have flown SFO-LAX-NRT and then you would have enjoyed LAX-NRT in comfort flying an A380 watching free movies in HD on a 10.6" display while eating toblerone with potato chips and drinking unlimited free alcohol (at least until you got drunk, got restrained and got arrested for public drunkenness and disturbing the flight    )


User currently offlineAngMoh From Singapore, joined Nov 2011, 483 posts, RR: 0
Reply 76, posted (2 years 4 months 2 weeks 23 hours ago) and read 5007 times:

Quoting AngMoh (Reply 75):
Because you flew the wrong airline SFO to NRT   Should have flown SFO-LAX-NRT and then you would have enjoyed LAX-NRT in comfort flying an A380 watching free movies in HD on a 10.6" display while eating toblerone with potato chips and drinking unlimited free alcohol (at least until you got drunk, got restrained and got arrested for public drunkenness and disturbing the flight    )


Just to follow up. I just tried to book a return LAX to NRT on Expedia. Lowest fare was Korean (A332) at $1714, followed by United codeshare(UA 757 to SFO, ANA 77W to NRT) at $1793 and the SQ (A380) at $1940.

Why DL/AA/UA with no service are at $2000 and above (UA $2070, AA $2894, DL $3274 - all 3 non stop, routing via other city could be cheaper but lowest for AA was $2460 via Dallas and DL $2766 via SFO) is a question to me. Maybe their 20 year old 744s burn a lot more fuel so that is why you need to pay more   

For those who want to check, it is departure on 6 May, return on 15 May with no restriction on flight timing. All chosen at random.


User currently offlineSuperfly From Thailand, joined May 2000, 39854 posts, RR: 74
Reply 77, posted (2 years 4 months 2 weeks 23 hours ago) and read 5028 times:

Quoting AngMoh (Reply 75):
Because you flew the wrong airline SFO to NRT   Should have flown SFO-LAX-NRT and then you would have enjoyed LAX-NRT in comfort flying an A380 watching free movies in HD on a 10.6" display while eating toblerone with potato chips and drinking unlimited free alcohol (at least until you got drunk, got restrained and got arrested for public drunkenness and disturbing the flight    )

Haha!  
United served me plenty of free booze. This was several years ago before Singapore was operating their A380 on that route. I've mostly been flying Thai Airways since then. Once they drop their A340 BKK-LAX, it will be Singapore, Air China or Philippines Airlines. I got to have 4-engines.
I stay quiet and drink till I fall asleep. I don't even watch the PTVs.



Bring back the Concorde
User currently offlineMaverickM11 From United States of America, joined Apr 2000, 17439 posts, RR: 46
Reply 78, posted (2 years 4 months 2 weeks 8 hours ago) and read 4849 times:

Quoting cmf (Reply 74):
You can't downplay or take the product out of the equation

Sure you can--product doesn't matter nearly as much as you think it does, and moreover people simply aren't willing to pay a premium for a free drink, or a reheated TV dinner. Air Asia proves that every day.

Quoting cmf (Reply 74):

If anything US (as total because there are islands of good) is an example of what not to do.

Then why are many Asian carriers trying to do what the US carriers were doing 10-15 years ago, starting an "LCC"?



E pur si muove -Galileo
User currently offlineEBGflyer From Denmark, joined Sep 2006, 1001 posts, RR: 0
Reply 79, posted (2 years 4 months 2 weeks 7 hours ago) and read 4841 times:

Quoting CO777DAL (Reply 69):
All sCO flights charge for alcohol.

Yes they do. Apparently. I was just on HKG-EWR and I couldn't believe they would charge for alcohol on a 15 hour flight. The food was so crappy as well that I almost couldn't eat it. Add to that that during the flight 7 out of 8 lavatories broke down which caused them not to serve the last meal as they were afraid of people having to go to the toilet.

On my way out to Asia it was a PM-UA flight and they did not charge, which also would have upset me the plane was delayed for 2.5 hours so I missed my connection in Narita.

All in all a pretty bad experience with United. Free drinks would have helped!



Future flights: CPH-BKK-MNL; MNL-GUM-TKK-PNI-KSA-KWA-MAJ-HNL-LAX
User currently offlinenethkt From Thailand, joined Apr 2001, 1081 posts, RR: 3
Reply 80, posted (2 years 4 months 2 weeks 7 hours ago) and read 4818 times:

I'm totally against the idea of charging for meals or beverages onboard on longer flights.
At least people need to eat something on a 6 hours gap!! So serve food on flights over 5:00 hrs of block time.

However, I think it's not the cost of free booze itself but also the extra weight they are carrying it.
At least they make money out of the weight they are carrying on the planes.

TG's heavy loss is just pure paperwork and calculation   There is much more things behind that.
They are not really literally loss!!

Quoting Superfly (Reply 77):
Once they drop their A340 BKK-LAX, it will be Singapore, Air China or Philippines Airlines. I got to have 4-engines. I stay quiet and drink till I fall asleep. I don't even watch the PTVs.

Air China runs 777-300ER one their daily PEK-LAX and rest 747-400 will be 777-300ER sooner or later! Book their 744 while you can!

Oh well, passenger need to stick to their PTV and stay awake! Stop snoring onboard! It's as bad as baby crying but nastier.  



Let's just blame it on yields.
User currently offlineAngMoh From Singapore, joined Nov 2011, 483 posts, RR: 0
Reply 81, posted (2 years 4 months 2 weeks 7 hours ago) and read 4811 times:

Quoting MaverickM11 (Reply 78):

Sure you can--product doesn't matter nearly as much as you think it does, and moreover people simply aren't willing to pay a premium for a free drink, or a reheated TV dinner. Air Asia proves that every day.

We were talking trans-pacific not Kuala Lumpur to Kuching. And I have just shown that trans-pacific, the airlines with free drinks and a general better product have lower fares...   

Quoting MaverickM11 (Reply 78):
Then why are many Asian carriers trying to do what the US carriers were doing 10-15 years ago, starting an "LCC"?

So did TED work out? Not that I know... Starting an LCC is a completely different strategy than taking your core product and cutting that to the bone while still charging a premium fare. And no LCC is going to go trans-pacific or Asia-Europe. Air Asia X has proven that LCC 10h+ does not work.


User currently offlinerogercamel From Singapore, joined Feb 2012, 87 posts, RR: 0
Reply 82, posted (2 years 4 months 2 weeks 7 hours ago) and read 4807 times:

Quoting Docpepz (Reply 72):
It is not fair at all to compare UA or AA within the US to SQ and CX. Of the nearly 100 destinations that SQ/Silk Air fly to, how many destinations does SQ alone fly to within a 3 hour radius:

Well - your comparison isn't exactly correct either; for shorthaul routes you should be comparing the product of MI with American domestic levels of service. In my experience, MI offers free food and alcohol on every flight.

Long haul it is entirely fair to compare the SQ product with the longhaul product of US carriers. US carriers tend to have an international product that is distinct from the domestic product.

Quoting MaverickM11 (Reply 78):
Quoting cmf (Reply 74):
You can't downplay or take the product out of the equation

Sure you can--product doesn't matter nearly as much as you think it does

Shorthaul - ok. Longhaul - product matters to me, and those who I talk to. Air Asia is primarily short haul.


User currently offlineSuperfly From Thailand, joined May 2000, 39854 posts, RR: 74
Reply 83, posted (2 years 4 months 2 weeks 5 hours ago) and read 4768 times:

Quoting nethkt (Reply 80):
Air China runs 777-300ER one their daily PEK-LAX and rest 747-400 will be 777-300ER sooner or later! Book their 744 while you can!

Is SFO still a 747-400?
SFO, LAX and ORD are all my home bases.

Quoting nethkt (Reply 80):
TG's heavy loss is just pure paperwork and calculation   There is much more things behind that.
They are not really literally loss!!

T.I.T.  



Bring back the Concorde
User currently offlinecmf From , joined Dec 1969, posts, RR:
Reply 84, posted (2 years 4 months 2 weeks ago) and read 4695 times:

Quoting MaverickM11 (Reply 78):
Sure you can--product doesn't matter nearly as much as you think it does, and moreover people simply aren't willing to pay a premium for a free drink, or a reheated TV dinner. Air Asia proves that every day.

Product doesn't matter if everyone provides the same product and people do not have the option of not buying, e.g. replacing a few hour flight with a day or two driving or multi-day boat ride isn't a real option.

People are prepared to pay premiums, if not we would only have economy class at single fair.

Quoting MaverickM11 (Reply 78):
Then why are many Asian carriers trying to do what the US carriers were doing 10-15 years ago, starting an "LCC"?

It may have been a valid argument if they dismantled their current operations and only went LCC. Better question, what happened to those LCC operations started by US mainlines. Another thing to ponder, why are US LCC's often providing better service than US mainlines?

Real management is much more than looking at revenue and cost charts.


User currently offlineMaverickM11 From United States of America, joined Apr 2000, 17439 posts, RR: 46
Reply 85, posted (2 years 4 months 1 week 6 days 14 hours ago) and read 4602 times:

Quoting AngMoh (Reply 81):
We were talking trans-pacific not Kuala Lumpur to Kuching. And I have just shown that trans-pacific, the airlines with free drinks and a general better product have lower fares...
Quoting AngMoh (Reply 81):
So did TED work out? Not that I know... Starting an LCC is a completely different strategy than taking your core product and cutting that to the bone while still charging a premium fare. And no LCC is going to go trans-pacific or Asia-Europe. Air Asia X has proven that LCC 10h+ does not work.
Quoting cmf (Reply 84):
Better question, what happened to those LCC operations started by US mainlines. Another thing to ponder, why are US LCC's often providing better service than US mainlines?

Of course none of them worked out. Much like none of these new airline-within-an-airline LCCs will likely work out. You have to remember this region is way behind in terms of deregulation and competition. The current crop of LCCs are only the first few of many more to come. LCC's haven't made longhaul work in the US either, but they've upended the domestic and regional market to a point where major cost cuts have been required across the network. The same thing is happening in the EU, and it's probably a few years down the road for the Pacific, but there's no reason why people in Asia would be willing to pay any more for certain services than anyone in Europe or the Americas.

Quoting cmf (Reply 84):
Real management is much more than looking at revenue and cost charts.

If you want to knit that onto a pillow or put it on an inspiring pretty picture go right ahead, but no matter what you do, if you're not covering your costs, you won't be doing it for long.



E pur si muove -Galileo
User currently offlineLawair From United States of America, joined Jan 2009, 198 posts, RR: 0
Reply 86, posted (2 years 4 months 1 week 6 days 8 hours ago) and read 4519 times:

Quoting MaverickM11 (Reply 85):
Of course none of them worked out. Much like none of these new airline-within-an-airline LCCs will likely work out. You have to remember this region is way behind in terms of deregulation and competition. The current crop of LCCs are only the first few of many more to come. LCC's haven't made longhaul work in the US either, but they've upended the domestic and regional market to a point where major cost cuts have been required across the network. The same thing is happening in the EU, and it's probably a few years down the road for the Pacific, but there's no reason why people in Asia would be willing to pay any more for certain services than anyone in Europe or the Americas.

A lot of the LCC craze has already played out regionally in Asia, but only regionally. My exposure has mainly been with TG. TG used to have a more extensive domestic network in the late 90s. Low fare competition ate into a lot of that as of 8 years ago, which spurred the creation of Nok Air in 2004. TG cut a significant amount of domestic flying, and since then it has also transferred some of that flying to Nok Air. As of now, I doubt TG is making money on its domestic routes. Its new carrier Thai Smile is its own hybrid carrier that isn't necessarily intended to compete with ultra low fare carriers, but is intended to supplement TG's regional feed from cities that cannot accommodate full premium TG widebody services. It's more of a Silk Air or Dragonair rather than an Air Asia. TG is also struggling somewhat with some regional flights of shorter distances. All of this, as you say, follows much of what happened in the US.

The difference for TG is that the airline is not really at all reliant on domestic feed or its domestic operations for its profitability. Part of this is evidenced by the fact that, despite the encroachment of low fare carriers in the region over the past 10 years, TG has maintained profitability for all but 2 years in its entire 52-year existence. In the US, on the other hand, the domestic and regional network plays a much larger role in the viability of local airlines, and since airlines like Southwest and the like have squeezed the profits from domestic flying, that has had a significant impact on the rest of the carriers' operations. The effect spills over into international operations, where airlines like UA begin proposing such silly ideas as BOB for transatlantic flights. However, the idea that TG would start cutting free alcohol on its European, Australian, and transpacific flights because of low fare competition domestically and regionally in Thailand is just silly. TG's main sources of profit are in medium and long haul flying, sectors that still have less low fare competition and are unlikely to have any in the long term, given the failures of Air Asia X, Oasis Hong Kong, etc. Its domestic routes have been loss-making for years. TG makes enough profit on the mere fact that people from London are trying to get to Bangkok, relying less on the London passenger who wants to connect through BKK to get to VTE, for example. DL, on the other hand, has to rely on the CDG passenger who may need to get to SLC, ATL, JFK, etc, and more importantly, dozens and dozens of cities beyond those hubs, routes that are typically in fierce competition with WN, B6, F9, etc. DL is not going to make enough purely on O&D between CDG and SLC. Likewise US probably wouldn't make enough purely on O&D between FCO and PHL or CLT. So when the domestic feed that the US carriers rely on becomes less profitable due to domestic competition, US carriers are more likely going to attempt to increase revenue or cut costs systemwide.

I get the impression SQ is in a similar position as TG. If we were to hypothetically say that their regional routes were unprofitable, there's little chance SQ would suddenly start charging for alcohol on its flights to the US to make up for this, among other potential revenue-boosting changes.

If anything, a stronger factor that would affect service quality (and lead to cost-cutting measures) would be the rise of fuel prices. It's more likely this and not low fare competition that has caused TG to cut baggage allowances, for example.

And lastly, even if we were to say that Asia was somehow following in the footsteps of the US carriers (which is true up to a certain extent), we still haven't really seen the bottom yet in our worldwide race to the bottom. In 10-15 years, if Asian airlines are charging for alcohol on their US flights, US carriers will probably be charging for blankets on their Asian flights by then.

[Edited 2012-04-16 21:30:29]

User currently offlinerogercamel From Singapore, joined Feb 2012, 87 posts, RR: 0
Reply 87, posted (2 years 4 months 1 week 6 days 7 hours ago) and read 4497 times:

Quoting Lawair (Reply 86):
I get the impression SQ is in a similar position as TG.

SQ's equivalent of domestic routes are flown by MI - SQ only do a few short haul routes themselves. CGK and DPS are both high volume (CGK for sure - DPS is 3x 777 a day and justifiy SQ size planes). They also do SGN (2x daily) and you could arguably include HAN and Manilla into that set.

Is MI financially successful? It'd be interesting to know whether they are reliant of SQ feed to secondary destinations in SE Asia.


User currently offlinecmf From , joined Dec 1969, posts, RR:
Reply 88, posted (2 years 4 months 1 week 5 days 22 hours ago) and read 4412 times:

Quoting MaverickM11 (Reply 85):
if you're not covering your costs, you won't be doing it for long

Repeating the mantra again. Ignoring, again, that I agree you need to cover cost.

The problem is that focusing on cost over product, hr and many other important areas will kill the company even more certainly than not covering cost. Have a good product and someone will come in and take over even if you fail to cover your costs. Have a bad product and you'r on the slope towards the end of the company even if you happen to have a positive margin right now.

One of the biggest problems with managing by cost is that it is a very late indicator. Saying that everything is fine because your costs are less than revenue is like the captain stating that everything is fine because the ship is floating. The good captain will instead rely on charts, look outs, radar, weather reports and the experience of the crew to keep it afloat.

Quoting MaverickM11 (Reply 85):
Of course none of them worked out.

But you think US shows the way by doing things you state were doomed to fail.

Quoting MaverickM11 (Reply 85):
there's no reason why people in Asia would be willing to pay any more for certain services than anyone in Europe or the Americas.

No-one wants to pay more than they have to for any specific service level. But it is extremely clear people do value services more than cost in many situations. I mentioned the different classes of service and the acceptance of paying more for a flight a few days out than for a flight further out.

Another good example is how people get to and from airports. Some drive themselves and often pay large amounts in parking fees. Some use taxi, that may be more or less than the parking cost alone. Some use van service that almost always is cheaper and slower than taxi. Then there are various forms of public transportation at generally lower cost but more time.

There are multiple choices because customers do look at more than just cost.

Quoting MaverickM11 (Reply 85):
If you want to knit that onto a pillow or put it on an inspiring pretty picture go right ahead

Send me your pillow and I will knit some words you need to sleep on.  


User currently offlineMaverickM11 From United States of America, joined Apr 2000, 17439 posts, RR: 46
Reply 89, posted (2 years 4 months 1 week 5 days 9 hours ago) and read 4288 times:

Quoting Lawair (Reply 86):
Part of this is evidenced by the fact that, despite the encroachment of low fare carriers in the region over the past 10 years, TG has maintained profitability for all but 2 years in its entire 52-year existence

It's also a government owned carrier, the same government that dictates bilaterals with other countries.

Quoting Lawair (Reply 86):
However, the idea that TG would start cutting free alcohol on its European, Australian, and transpacific flights because of low fare competition domestically and regionally in Thailand is just silly

The free alcohol is really just a symbol of what's to come. It may not be cut at all, but the Asian market is going to see huge growth that is going to spawn new competition and pressure the older, traditionally government owned/supported ones. Combine that with oil and labor costs that aren't going to go down in the long run, and a lot of the 'perks' people expect from Asian carriers but not their home based EU/US carriers will start to look like easy costs to cut.

Quoting Lawair (Reply 86):
In 10-15 years, if Asian airlines are charging for alcohol on their US flights, US carriers will probably be charging for blankets on their Asian flights by then.

It is always evolving; who knows where the US will be in 15 years, but I can tell you where EU/Pacific carriers will be .

Quoting cmf (Reply 88):
But you think US shows the way by doing things you state were doomed to fail.

Right--the US tried them, they didn't work, and the airlines eventually had to make some very hard decisions. The EU is doing that right now and Asia is not far behind.



E pur si muove -Galileo
User currently offlinecmf From , joined Dec 1969, posts, RR:
Reply 90, posted (2 years 4 months 1 week 5 days 6 hours ago) and read 4234 times:

Quoting MaverickM11 (Reply 89):
It is always evolving; who knows where the US will be in 15 years, but I can tell you where EU/Pacific carriers will be .

What an ignorant statement. You need to read up on history. US does not have exclusivity on coming up and being first with implementing new ideas.


User currently offlineLawair From United States of America, joined Jan 2009, 198 posts, RR: 0
Reply 91, posted (2 years 4 months 1 week 5 days 5 hours ago) and read 4218 times:

Quoting MaverickM11 (Reply 89):
Quoting Lawair (Reply 86):
Part of this is evidenced by the fact that, despite the encroachment of low fare carriers in the region over the past 10 years, TG has maintained profitability for all but 2 years in its entire 52-year existence

It's also a government owned carrier, the same government that dictates bilaterals with other countries.

I'm not sure I follow. Are you saying the Thai government is negotiating bilaterals that will benefit or protect TG, thereby ensuring TG profitability? If that is the case, why would that ever change if the government stays in control? Or do you feel that the Thai government is about to sell its controlling stake, such that it will negotiate more liberal bilaterals that will create more low-fare competition for TG (which seems to be your point)? I don't actually think the bilateral negotiations are necessarily helping TG anyway. I was saying that low fare competition domestically and in the region has existed for roughly a decade already, and TG has been profitable in all but two of those years (2008 during the airport blockade and fuel spike, and 2011 during the two/three-month flood crisis). Low fare competition is growing considerably, yes, but this doesn't undo my main point.

The main point of my post was that TG, like some other Asian carriers, is somewhat more insulated from low fare competition because the routes on which low fare carriers compete with TG make up a small part of TG's network and revenue. In 2011, for example, TG operations in Thailand (domestic), Indochina, and South Asia accounted for only 19.5% of total revenue. These are the routes on which low fare carriers are competing most successfully. Low fare competition is less strong on segments beyond these areas, and since we have yet to see a longhaul low fare carrier succeed, the situation is likely to stay this way. By contrast, UA's revenue from US and Canadian operations accounted for over 60% of revenue in 2010. When the source of 60% of your revenues comes under pressure from low cost carriers, you're more likely to make systemwide changes to your business as UA has. Since TG's low fare competition only really affects 20-30% of its operations, and is likely to stay that way, TG does feel pain but it's not enough pain such that it will affect the entirety of the airline's business.

To be sure, TG does face significant competition not from low-fare carriers, but rather Middle Eastern carriers. While there may be some price competition, it hasn't resulted in marked cuts in service quality, presumably because the carriers are competing extensively on service and not focusing on price. As an example, TG doesn't have the wherewithal to match EK's A380 service to BKK, but TG has upgraded its services to DXB over the years by using newer A330s with improved products. Sporadically even first class services have been tried (and failed) on TG's Middle Eastern routes in the past several years; all seem like an attempt to match service quality, not to cut costs and service standards in order to compete on price. In some respects, competition by Middle East carriers to BKK can be characterized as a race to the top, with TK, EY, EK, RJ, and WY, for example, improving their products both in the air and, in some cases, on the ground in BKK (ie. new lounges). TG may actually be a loser in all of this, with its revenues on these routes being squeezed while they still feel pressured to compete on product/service.

The Middle East, by the way, accounts for only 1.5% of TG's revenues. Low fare competition in BKK seems to have only thrived so far on routes less than 4-5 hours in length, primarily within Thailand, as well as to India, Indonesia, Indochina, Malaysia, and some secondary Chinese cities. Korea has also seen some low-fare competition to BKK in smaller doses. These all account for perhaps less than 40% of TG's revenues, with the worst of the competition affecting, again, 20-30%.


[Edited 2012-04-17 23:43:09]

User currently offlineMaverickM11 From United States of America, joined Apr 2000, 17439 posts, RR: 46
Reply 92, posted (2 years 4 months 1 week 4 days 23 hours ago) and read 4146 times:

Quoting cmf (Reply 90):
What an ignorant statement. You need to read up on history. US does not have exclusivity on coming up and being first with implementing new ideas.

Spare me the faux rage. The US deregulated first, and it's a continual experiment in how to deal with increasing competition and costs combined with decreased unit revenues. Anyone could come up with a new idea, but lots of ideas have already been tried all over the world and they all end up in the same place: cut costs, raise revenue.

Quoting Lawair (Reply 91):

I'm not sure I follow. Are you saying the Thai government is negotiating bilaterals that will benefit or protect TG, thereby ensuring TG profitability?

Government ownership brings lots of benefits, and often obstacles.

Quoting Lawair (Reply 91):
The main point of my post was that TG, like some other Asian carriers, is somewhat more insulated from low fare competition because the routes on which low fare carriers compete with TG make up a small part of TG's network and revenue

It's still very early in the development of LCCs in the region.



E pur si muove -Galileo
User currently offlineLawair From United States of America, joined Jan 2009, 198 posts, RR: 0
Reply 93, posted (2 years 4 months 1 week 4 days 20 hours ago) and read 4070 times:

Quoting MaverickM11 (Reply 92):
Quoting Lawair (Reply 91):

I'm not sure I follow. Are you saying the Thai government is negotiating bilaterals that will benefit or protect TG, thereby ensuring TG profitability?

Government ownership brings lots of benefits, and often obstacles.

Well yes that is understood...so despite those obstacles (and quite frankly there have been more obstacles than benefits) TG has made a consistent profit for all but 2 years.

Quoting MaverickM11 (Reply 92):
Quoting Lawair (Reply 91):
The main point of my post was that TG, like some other Asian carriers, is somewhat more insulated from low fare competition because the routes on which low fare carriers compete with TG make up a small part of TG's network and revenue

It's still very early in the development of LCCs in the region.

It's not as early as you think. Yes it's still growing quickly, but, again, based on history, that growth has a limit. That limit means that low fare competition will only affect less than 30 or 40% of TG's routes by revenue. Many have tried and failed over the past decade to conduct long haul low-fare operations. Until (and if) they become successful, TG and SQ will be in better shape from low fare competition than the US carriers are. TG has already faced loads of competition for many decades on routes to Europe, the US, and North Asia, but services have not been noticeably cut during that time. And besides parts of North Asia, low fare carriers are not going to have much success on routes from BKK to those areas. Even North Asia, where some low fare competition exists already, there isn't the same level of growth in volume than there is regionally. Only a small number of seats has been added at a time. So given that at least 50% of TG's route network will never see sustained low fare competition (Europe accounts for over 30%), we shouldn't see a quick cut to services, particularly on those routes.


User currently offlineMaverickM11 From United States of America, joined Apr 2000, 17439 posts, RR: 46
Reply 94, posted (2 years 4 months 1 week 4 days 10 hours ago) and read 3994 times:

Quoting Lawair (Reply 93):
Yes it's still growing quickly, but, again, based on history, that growth has a limit. That limit means that low fare competition will only affect less than 30 or 40% of TG's routes by revenue.

It's just not the LCC competition--it's everyone. TG, for example, will have plenty of LCCs pressuring its regional yields, as well as everyone else in the region. TG and the other network carriers in the region will compensate by growing their networks. That means hubs in HKG, CGK, SGN, SIN, who knows even VTE/RGN/PNH will all compete more agressively for the same connections. And the GCC carriers are going to overfly all of them and/or offer even more competitive destinations via their hubs, also under pressure from each other and European carriers flying more nonstops overhead. It's going to get very crowded very quickly, and not every hub is going to be able to survive.



E pur si muove -Galileo
User currently offlineLawair From United States of America, joined Jan 2009, 198 posts, RR: 0
Reply 95, posted (2 years 4 months 1 week 4 days 7 hours ago) and read 3937 times:

Quoting MaverickM11 (Reply 94):
It's just not the LCC competition--it's everyone. TG, for example, will have plenty of LCCs pressuring its regional yields, as well as everyone else in the region. TG and the other network carriers in the region will compensate by growing their networks. That means hubs in HKG, CGK, SGN, SIN, who knows even VTE/RGN/PNH will all compete more agressively for the same connections. And the GCC carriers are going to overfly all of them and/or offer even more competitive destinations via their hubs, also under pressure from each other and European carriers flying more nonstops overhead. It's going to get very crowded very quickly, and not every hub is going to be able to survive.

Well this is a different point from your previous posts, and I mostly agree with you here. I've actually said as much in my posts as well. TG has suffered for decades with competition on nearly every route it flies, and this has gotten worse in recent years. TG has definitely had to cut routes and is now honed in on controlling fuel costs. But...we could look also at the effect competition has had on one of TG's busiest routes, and one of the most competitive in the world-- BKK-HKG. There are 11 carriers on the route, including one ultra-low fare carrier, and this route has been in this competitive state for well over a decade, perhaps several decades. We're not seeing the cuts in service quality on this route that you might expect. TG in fact provides a first class option (despite the short stage of the flight), and every one of its flights on this route come with free hot meals in all classes, including multi-course meals in premium classes, and of course, lots of alcohol. This has stayed fairly consistent, whether to TG's detriment or not, despite the great amount of competition on this route. EK also flies the A380 on the route. My impression is that all of the other airlines on the route, save for Thai Air Asia, also provide full services on this short flight.

If this route is at all indicative of how airlines in the region will react to the increased competition, then we can't say that the airlines in the region will rush to cut their levels of service to the same extent that US carriers have. In some cases, they have actually increased services. Services and perks are very sticky in this part of the world.


User currently offlineSuperfly From Thailand, joined May 2000, 39854 posts, RR: 74
Reply 96, posted (2 years 4 months 1 week 4 days 3 hours ago) and read 3888 times:

Quoting Lawair (Reply 95):
BKK-HKG. There are 11 carriers on the route, including one ultra-low fare carrier, and this route has been in this competitive state for well over a decade, perhaps several decades. We're not seeing the cuts in service quality on this route that you might expect. TG in fact provides a first class option (despite the short stage of the flight), and every one of its flights on this route come with free hot meals in all classes, including multi-course meals in premium classes, and of course, lots of alcohol.

As well as access to their international first class lounge. I flew on this route several years ago on their 747-300 just days before it was retired. The service was phenomenal!
As a result, I am loyal to TG and fly them when every they're an option on that route.

Quoting Lawair (Reply 95):
If this route is at all indicative of how airlines in the region will react to the increased competition, then we can't say that the airlines in the region will rush to cut their levels of service to the same extent that US carriers have. In some cases, they have actually increased services. Services and perks are very sticky in this part of the world.

  
You get great service on just about every carrier here in the Far-East. Even the budget airlines such as Nok Air and Orient Thai offer great service with free meals.
As I stated in reply #49, you even get a free meal on a short 25 minute flight on Nok Mini which is just a little 14 seater single engine Cessna 208 Caravan, yet you have to buy your meal on a 6 hour flight between San Francisco to Boston.



Bring back the Concorde
User currently offlinecmf From , joined Dec 1969, posts, RR:
Reply 97, posted (2 years 4 months 1 week 3 days 18 hours ago) and read 3827 times:

Quoting MaverickM11 (Reply 92):
Spare me the faux rage.

 Wow! Spare us

Quoting MaverickM11 (Reply 92):
The US deregulated first, and it's a continual experiment in how to deal with increasing competition and costs combined with decreased unit revenues. Anyone could come up with a new idea, but lots of ideas have already been tried all over the world and they all end up in the same place: cut costs, raise revenue.



Yes US deregulated first. So what? Doesn't mean they will automatically be first with everything.

Look at the many bankruptcies and the enormous amount of capital lost, why would anyone want to follow that model?

The cut costs, raise revenue mentality you bring up is a big part of the problem.

US airlines have clearly demonstrated, as a group, there are exemptions, they are not able to keep revenue above cost despite cutting costs and nickle and diming.

Big part of the problem is the horrible pricing policy. Competing on price alone and not having the discipline to charge what is required has meant customer have price expectations that are not realistic to actual costs. Airlines reducing the product while charging more for it doesn't help. The resulting labor issues from cutting costs add to it.

Back to my original point. No company can remain successful by putting product and labor at a lower priority than revenue and cost. They all need to be there. This is why the US model isn't the one to follow. Why Asia will not look like US 15 years from now.


User currently offlineMaverickM11 From United States of America, joined Apr 2000, 17439 posts, RR: 46
Reply 98, posted (2 years 4 months 1 week 3 days 11 hours ago) and read 3760 times:

Quoting Lawair (Reply 95):
Well this is a different point from your previous posts,

I wasn't trying to focus on LCCs--network airlines everywhere are going to be caught between LCCs on one side, and fellow network carriers on the other.

Quoting Lawair (Reply 95):
But...we could look also at the effect competition has had on one of TG's busiest routes, and one of the most competitive in the world-- BKK-HKG

It's a good example but it's also only one route.

Quoting cmf (Reply 97):
Yes US deregulated first. So what? Doesn't mean they will automatically be first with everything.

The same things are going to happen everywhere else. The timeline looks the same as barriers to entry are lowered, costs increased, and competition grows. And on top of that, over and over it is proven that the majority of passengers, first and business class aside, aren't willing to pay a premium much of anything other than schedule.

Quoting cmf (Reply 97):
Look at the many bankruptcies and the enormous amount of capital lost, why would anyone want to follow that model?

They don't have a choice, as carriers like Malev, JAL, Malaysia, Spanair, Blue1, Alitalia, Sabena/Swissair, and many more have found out or are finding out, it's tough to change, and most of the stakeholders don't want to change anyway.

Quoting cmf (Reply 97):
The cut costs, raise revenue mentality you bring up is a big part of the problem.

Do you have a better solution that has ever been successfully used on earth anywhere, anytime, anyhow, that didn't either lower costs or increase revenues?

Quoting cmf (Reply 97):
not having the discipline to charge what is required

This and "why don't they just raise fares $5" are red flags pointing to a fundamental misunderstanding of a network business. "Charging what is required" means the other carrier gets the traffic; if all the legacy carriers charged "what was required" they'd be almost entirely replaced by WN, NK, and B6, and you'd be back to bare bones service once again.

[Edited 2012-04-19 18:24:46]


E pur si muove -Galileo
User currently offlinerogercamel From Singapore, joined Feb 2012, 87 posts, RR: 0
Reply 99, posted (2 years 4 months 1 week 3 days 8 hours ago) and read 3707 times:

Quoting MaverickM11 (Reply 98):
Quoting Lawair (Reply 95):
But...we could look also at the effect competition has had on one of TG's busiest routes, and one of the most competitive in the world-- BKK-HKG

It's a good example but it's also only one route.

I reckon it's the same for almost all of the heavily trafficked routes in Asia - CX and SQ haven't cut service on SIN-HKG despite the LCC (and US carrier) competition. SQ haven't reduced service on SIN-CGK in the face of competition from GR and the LCCs. You could perhaps exclude SIN-KUL which is dominated by a codeshare agreement between SQ, MH and MI.


User currently offlinecmf From , joined Dec 1969, posts, RR:
Reply 100, posted (2 years 4 months 1 week 1 day 22 hours ago) and read 3550 times:

Quoting MaverickM11 (Reply 98):
The same things are going to happen everywhere else. The timeline looks the same as barriers to entry are lowered, costs increased, and competition grows. And on top of that, over and over it is proven that the majority of passengers, first and business class aside, aren't willing to pay a premium much of anything other than schedule.

If the same thing is going to happen then all those airlines should just give up, i.e. liquidate to give their owners the best possible return. But I don't agree with the same thing is going to happen. Not if the managers of those companies have brains, and I think most of them do.

There is value in providing services outside of schedule. You discounted business and first but they, together with economy plus, are proof service levels attract. You dismissed other important differentiators. Route network is one with airports used being a significant differentiator in many places. Brand loyalty, in aviation linked with alliance loyalty, is another.

Brand loyalty is where items such as the included (not free) alcohol matters. Why do you think the Middle East airlines are serving alcohol? They are based in regions where most are legally not allowed to consume alcohol and the few who can have severe restrictions. Yet they spend large amounts on providing top brands.

Quoting MaverickM11 (Reply 98):
They don't have a choice, as carriers like Malev, JAL, Malaysia, Spanair, Blue1, Alitalia, Sabena/Swissair, and many more have found out or are finding out, it's tough to change, and most of the stakeholders don't want to change anyway.

Sure they do. If you can't compete close shop. Happens every day. But re-invent, instead of follow, is the option I like to see.

Quoting MaverickM11 (Reply 98):
Do you have a better solution that has ever been successfully used on earth anywhere, anytime, anyhow, that didn't either lower costs or increase revenues?

Sure do, something that is used successfully all over the world - Make your product attractive.

Let me give you a few examples. Hotels. Basically you get a place to sleep for a night. Yet prices vary dramatically. Looking out my window I see a row of hotels. Some charge 100 USD per night, some several 100 per night. One is 800 per night for the cheapest option. They are within walking distance of each other.

Restaurants. Essentially the same as hotels. I have lost track of the number of burger restaurants that opened around here the last couple of years. Not a single McDonalds or Burger King. Some charge just under 10 buck for a burger. Most between 10 and 20. There is one at 125 USD, first class  

Cars. Why is it that not everyone is driving a Tata? Heck, Mercedes India used Tata to paint there cars for a long time. Maybe they still do.

Clothing. Why are garments sold at so different prices? The difference is much more than the difference in raw material. Often they are produced at the same plants. Often by the same people.

Groceries. This is a two for one example. First you have the different pricing of same type products, e.g. paying more for organic vegetables or paying more for Heinz Ketchup. Then you have same SKU sold at different prices at stores next to each other. Here we have a smallish (100 stores) organic chain in the same block as the main regional chain. They carry many identical items, e.g. Coca-Cola. They do not charge the same. Often the difference can be more than 10%. Then you can go to the convenience store a block away and pay even more for the same identical item. Or you cross the bridge and get it a bit cheaper at the discount store.

A big problem with US legacy airlines is that from the customer perspective they are all the same. That is why customers will pick the cheapest each time. Why they move for 5 bucks. Whatever loyalty remain is due to frequent flyer privileges and the difficulty of switching.

Of course it affects both cost and revenue, but it is indirect. It isn't charging more for what we have now. It isn't make your employees or suppliers cover your shortcomings. It is changing both cost and revenue by selling right.

Quoting MaverickM11 (Reply 98):
This and "why don't they just raise fares $5" are red flags pointing to a fundamental misunderstanding of a network business. "Charging what is required" means the other carrier gets the traffic; if all the legacy carriers charged "what was required" they'd be almost entirely replaced by WN, NK, and B6, and you'd be back to bare bones service once again.

As I have said so many times it isn't about just increasing revenue by charging another 5 bucks. But if your business need those 5 additional bucks per customer to be viable you better make sure to get it.

The fundamental misunderstanding is to think that selling at loss is good business. If you can't charge what is required you have no reason to be in business. After all your talk about revenue and cost I thought you understood that. The question is: How are you able to charge those 5 additional bucks? Make your product worth it.


User currently offlineMaverickM11 From United States of America, joined Apr 2000, 17439 posts, RR: 46
Reply 101, posted (2 years 4 months 1 week 6 hours ago) and read 3402 times:

Quoting cmf (Reply 100):

If the same thing is going to happen then all those airlines should just give up
Quoting cmf (Reply 100):
Sure they do. If you can't compete close shop. Happens every day.

So EY and QR should just close shop ? I don't think many shareholders and certainly no governments would want to see their links to the world wind down tomorrow, certainly not voluntarily.

Quoting cmf (Reply 100):
Route network is one with airports used being a significant differentiator in many places

Airports? KIX and CAN are a beautiful airports that can't seem to support any longhaul service outside of a couple markets. LHR/FRA/CDG are mostly hellholes that have supported some of the most profitable carriers, as well as loads of service to hundreds of destinations.

Quoting cmf (Reply 100):
Brand loyalty, in aviation linked with alliance loyalty, is another.

That's almost entirely mileage program based, which is a huge money spinner if it's run well

Quoting cmf (Reply 100):
A big problem with US legacy airlines is that from the customer perspective they are all the same.

The product followed the customer spend. Remember all the legacy network carriers were full service carriers when WN was growing--nothing about that full service either attracted passengers away from WN nor encouraged them to pay more for the "frills". The frills are gone because people will not pay for them.

Quoting cmf (Reply 100):
The fundamental misunderstanding is to think that selling at loss is good business

No one thinks it's a good business, but it is rather a reality in a business that has low barriers to entry and high barriers to exit, and thus chronic overcapacity.

Quoting cmf (Reply 100):
Make your product worth it.
Quoting cmf (Reply 100):
You discounted business and first but they

I did not; those are viable in very specific situations. EU carriers rarely even bother with a separate cabin anywhere within the EU.

Quoting cmf (Reply 100):
together with economy plus

Premium economy cabins are new and generally so small it's indicative of how few people airlines expect to pony up for the service. AF's Y+ cabin on the 77W is 28 seats, against 198 for Y.



E pur si muove -Galileo
User currently offlinecmf From , joined Dec 1969, posts, RR:
Reply 102, posted (2 years 4 months 5 days 19 hours ago) and read 3249 times:

Quoting MaverickM11 (Reply 101):
So EY and QR should just close shop ? I don't think many shareholders and certainly no governments would want to see their links to the world wind down tomorrow, certainly not voluntarily.

Don't understand how you think QR is an example? EY maybe. Doubt many on this site know their financials and plans well enough. I certainly don't.

But it is interesting to note that you now see reasons beyond revenue and cost.

Quoting MaverickM11 (Reply 101):
Airports? KIX and CAN are a beautiful airports that can't seem to support any longhaul service outside of a couple markets

Are you suggesting they disprove my statement?

Quoting MaverickM11 (Reply 101):
That's almost entirely mileage program based, which is a huge money spinner if it's run well

i.e. another example of cost not being the only factor in buying a ticket.

Quoting MaverickM11 (Reply 101):
No one thinks it's a good business, but it is rather a reality in a business that has low barriers to entry and high barriers to exit, and thus chronic overcapacity.

Low barriers to entry? How do you reach that conclusion?

High barriers to exit? Again, how do you reach that conclusion?

I mostly agree on chronic over capacity. But that is a sign of a business segment not running properly, isn't it?

Quoting MaverickM11 (Reply 101):
I did not; those are viable in very specific situations. EU carriers rarely even bother with a separate cabin anywhere within the EU.

Are you suggesting first, business and plus are not important? Are you suggesting business class is the same product as economy in Europe? Customers sure do not select them based on lowest cost. I don't see any way this supports your arguments abve.

Quoting MaverickM11 (Reply 101):
Premium economy cabins are new and generally so small it's indicative of how few people airlines expect to pony up for the service. AF's Y+ cabin on the 77W is 28 seats, against 198 for Y.

Still important enough to have that product on the market. And I doubt you can find anyone who picked it because it is cheaper than economy so how does it support your argument that cost is all that matters?


User currently offlineMaverickM11 From United States of America, joined Apr 2000, 17439 posts, RR: 46
Reply 103, posted (2 years 4 months 5 days 10 hours ago) and read 3175 times:

Quoting cmf (Reply 102):
Don't understand how you think QR is an example? EY maybe. Doubt many on this site know their financials and plans well enough. I certainly don't.

Neither of them are making money--believe me they'd be shouting it from the top of the nearest building if they could even get the creative accounting to show a profit--so they should just shut down? None, if any of the EU carriers are making money on shorthaul so they should just stop? VX should have stopped long ago? Same JL recently? Should AA just quit while it's behind? OZ and SN should just throw in the towel?

Quoting cmf (Reply 102):
But it is interesting to note that you now see reasons beyond revenue and cost.

Sorry, no dice.

Quoting cmf (Reply 102):
Are you suggesting they disprove my statement?

I don't know what your statement meant--if it's that airports drive a premium beyond their location then that is incorrect.

Quoting cmf (Reply 102):
i.e. another example of cost not being the only factor in buying a ticket.

Yeah. Revenue. Airlines do this to increase revenue. As I said. A thousand times: it's all about increasing revenue or decreasing costs.

Quoting cmf (Reply 102):
Low barriers to entry? How do you reach that conclusion?

High barriers to exit? Again, how do you reach that conclusion?

This is really common knowledge.

Quoting cmf (Reply 102):
Are you suggesting first, business and plus are not important? Are you suggesting business class is the same product as economy in Europe? Customers sure do not select them based on lowest cost. I don't see any way this supports your arguments abve.

EU carriers rarely even bother with a separate cabin configuration for regional first, unlike the US which has dedicated seats--none of which can be squeezed/expanded to fit more or fewer people. If EU carriers idea of regional first is "we'll fold down a tray table and put up a curtain", it's clear that the premium regional market just isn't worth it--that ship has long sailed.



E pur si muove -Galileo
User currently offlineAngMoh From Singapore, joined Nov 2011, 483 posts, RR: 0
Reply 104, posted (2 years 4 months 5 days 7 hours ago) and read 3140 times:

Quoting MaverickM11 (Reply 103):
EU carriers rarely even bother with a separate cabin configuration for regional first, unlike the US which has dedicated seats--none of which can be squeezed/expanded to fit more or fewer people. If EU carriers idea of regional first is "we'll fold down a tray table and put up a curtain", it's clear that the premium regional market just isn't worth it--that ship has long sailed.

How did we get to 1 hour regional flights when we started with service across the Pacific?  

The following is the case:
1) Every single low cost long distance carrier has failed
2) Across the Pacific, US airlines have bugger all market share because they deliver a crap product and at cost which is not lower than airlines which have a good product (CX, SQ, NH, JL, KE, OZ etc)
3) Across the Atlantic, it is not much better: AF (which we all love to hate) can fill an A380 on routes where US airlines run a 757. LH, BA, KL, even AF and whoever else are preferred over US airlines.

Conclusion: just cutting cost does not work. Less than 2 hours, costs matter most. More than 10 hours, you want to be treated like a human being.

For the same reason that people stay in the Hilton, Marriott and Sheraton (normal rooms, not suites) instead of a crappy 1 star hotel with hourly rates, people check for product when they are going the spend all day traveling. So yes, when I go to Europe on holiday I check between CX, MH and SQ and am willing to take an up to 4 hour detour over Hongkong to be able to get the lowest fare, but I am not willing to spend the same amount of money flying KL direct. Money matters, but it is Value for Money, not absolute cost. And the value for money for US airlines across the pacific is downright mediocre if you fly Y.

[Edited 2012-04-24 22:22:38]

User currently offlinecmf From , joined Dec 1969, posts, RR:
Reply 105, posted (2 years 4 months 5 days ago) and read 3094 times:

Quoting MaverickM11 (Reply 103):
Neither of them are making money

You're wrong.

""But we will still have our nose above the water," he said, adding he expected revenue of USD$6 billion, up from USD$5.1 billion the previous year.

Al Baker said in June the airline made net profit of USD$205 million for 2009/10 and more than USD$230 million in 2010/2011."
http://news.airwise.com/story/view/1331245013.html

Quoting MaverickM11 (Reply 103):
so they should just shut down

No, you should never "just shut down". But if you can't turn it around then yes. That is my opinion. But I like to know why you think owners should keep putting money in a pit.

Just to add to your restricted example. Often you can find sections that do not operate profitable but they support other areas in a way that more than cover those losses and thus are justified to continue.

Quoting MaverickM11 (Reply 103):
I don't know what your statement meant--if it's that airports drive a premium beyond their location then that is incorrect.

I am suggesting that people are often prepared to pay more to use one airport over another. Ryanair is a good example where many avoid them for that reason. Then you have London, New York, Los Angeles, South Florida, etc. Customers do pay for convenience.

Quoting MaverickM11 (Reply 103):
This is really common knowledge

You need to update your common knowledge. Just the certification process to start an airline removes all possibilities of calling it low barrier to entry. As to what makes it harder to close? Total loss how you justify that,

Quoting MaverickM11 (Reply 103):
Yeah. Revenue. Airlines do this to increase revenue. As I said. A thousand times: it's all about increasing revenue or decreasing costs.

As I have said a thousand times. Your product is equally important. Ignore the product and your revenue increase is short lived and then turn negative as customers find alternatives that are better for them.

Cost and revenue do not live in isolation. That is your big problem. And unfortunately a far too common problem in US business,

Quoting MaverickM11 (Reply 103):
EU carriers rarely even bother with a separate cabin configuration for regional first

With your focus on cost and revenue it is sadly understandable you do not understand the product for which customers pay so much extra. You need to think about it from a customers perspective to understand why they pay more for what you claim to be the same product.


User currently offlineMaverickM11 From United States of America, joined Apr 2000, 17439 posts, RR: 46
Reply 106, posted (2 years 4 months 4 days 23 hours ago) and read 3067 times:

Quoting cmf (Reply 105):

You're wrong.

I don't trust Al Baker as far as I can throw him. But sure we can pretend he's being truthful. Doesn't really matter here.

Quoting cmf (Reply 105):
No, you should never "just shut down". But if you can't turn it around then yes. That is my opinion. But I like to know why you think owners should keep putting money in a pit.

US carriers and now EU carriers have been in a perpetual "turn around" phase

Quoting cmf (Reply 105):

I am suggesting that people are often prepared to pay more to use one airport over another.

Totally based on location.

Quoting cmf (Reply 105):
Ryanair is a good example where many avoid them for that reason

Like I said. 100% location.

Quoting cmf (Reply 105):
Your product is equally important. Ignore the product and your revenue increase is short lived and then turn negative as customers find alternatives that are better for them.

Nope, outside of discretionary premium class traffic, product matters very little independent of price.

Quoting AngMoh (Reply 104):
How did we get to 1 hour regional flights when we started with service across the Pacific?

It's all connected. What do you think subsidizes those regional losses in Europe?

Quoting AngMoh (Reply 104):
Across the Atlantic, it is not much better: AF (which we all love to hate) can fill an A380 on routes where US airlines run a 757. LH, BA, KL, even AF and whoever else are preferred over US airlines.

AF can't fly to ORD half the year, or SEA, or PHL, MCO, or CUN; in some of those places a horror-of-horrors US carrier is replacing them. They've reduced BKK. LH is talking about reducing BKK as well.

Quoting AngMoh (Reply 104):
So yes, when I go to Europe on holiday I check between CX, MH and SQ and am willing to take an up to 4 hour detour over Hongkong to be able to get the lowest fare, but I am not willing to spend the same amount of money flying KL direct.

I think this is a perfect example for "product". You're willing to go far out of your way to avoid KL, but for the same price. In other words if the nonstop and the routing via HKG are the same, you're willing to give CX 13% less per mile in order to go via HKG than you are to KL for the nonstop. So product is essentially driving a unit revenue discount in your example, not a premium.



E pur si muove -Galileo
User currently offlineAngMoh From Singapore, joined Nov 2011, 483 posts, RR: 0
Reply 107, posted (2 years 4 months 4 days 21 hours ago) and read 3042 times:

Quoting MaverickM11 (Reply 106):
I think this is a perfect example for "product". You're willing to go far out of your way to avoid KL, but for the same price. In other words if the nonstop and the routing via HKG are the same, you're willing to give CX 13% less per mile in order to go via HKG than you are to KL for the nonstop. So product is essentially driving a unit revenue discount in your example, not a premium.

Your reasoning is idiotic because KL gets zero dollars for an empty seat from me while CX gets 4 seats filled at around 1500 SGD/seat. I choose the airline with the value for money. The distance they travel is irrelevant - I don't choose airline for cost/mile. I choose airline which treats me better for what I pay.

As cmf is trying to tell you, people pay for the product, not for the absence of product. And this product needs to be delivered at a cost which makes the profitable. CX is a good (if not best) example of that. Good service, great profits. It does not mean you can offer 40" legroom in Y because that is not profitable. But neither does that mean the airline can cut all service to the bone to lower cost as you keep on promoting, because they lose lots of customers as well as pricing power and they go under. Air Asia X tried and failed.

BTW: most of the time I end up flying SQ direct. I flew for holiday on SIN - Europe 5 times SQ, once MH and once CX and when I flew CX I had a 2 day stopover in Hongkong on the return leg.


User currently offlineMaverickM11 From United States of America, joined Apr 2000, 17439 posts, RR: 46
Reply 108, posted (2 years 4 months 4 days 21 hours ago) and read 3031 times:

Quoting AngMoh (Reply 107):
Your reasoning is idiotic because KL gets zero dollars for an empty seat from me while CX gets 4 seats filled at around 1500 SGD/seat

KL can't sell the seat if you don't buy it? On one of their higher LF routes? I'll let you try that argument again, a different way if you'd like.

Quoting AngMoh (Reply 107):
The distance they travel is irrelevant - I don't choose airline for cost/mile. I choose airline which treats me better for what I pay.

In your own example CX gets less money from you per mile than KL does for nonstop, even if you choose CX for "product", it's clear that the nonstop drives a higher premium.

Quoting AngMoh (Reply 107):
As cmf is trying to tell you, people pay for the product

I disagree, and over the next 5-10 years it's going to become increasingly clear.



E pur si muove -Galileo
User currently offlinecmf From , joined Dec 1969, posts, RR:
Reply 109, posted (2 years 4 months 4 days 20 hours ago) and read 2993 times:

Quoting MaverickM11 (Reply 106):
I don't trust Al Baker as far as I can throw him.

I don't care what you think about him. I know he is in position to know if they make profit or not. I'm not aware on anything making you privileged to that information. Who should I trust? Someone who has access to the data or someone who do the most basic MBA mistake and exemplifies why people say the finance department is killing business?

Quoting MaverickM11 (Reply 106):
US carriers and now EU carriers have been in a perpetual "turn around" phase

Doesn't change anything and most importantly does not help your cost/revenue is all there is to look at.

Quoting MaverickM11 (Reply 106):
Totally based on location.

Of course. There are a lot of places where I for all practical reasons have a choice of one. But there are plenty of places where I have alternatives. And then there are plenty of people who pick the more expensive option for convenience. Straight against what you stated.

Quoting MaverickM11 (Reply 106):
Nope, outside of discretionary premium class traffic, product matters very little independent of price

Product matters very little when it is deemed to be equal. Change the offering and customers will value it differently.

I still would like you to explain why people pay the higher business fare in Europe when you state the product is equal to economy.

Quoting MaverickM11 (Reply 108):
I disagree, and over the next 5-10 years it's going to become increasingly clear.

We don't need to wait to know that competing with lowest product and price is not viable. But it is what you get when you take the product out of the equation.

Funny thing is that you insist on taking out premium classes though they are frequently stated as being the most profitable part of airlines operations. But I understand why do it. They are proof that people pay for product and thus do not fit your claim.

Just for fun. Read up on the 1954 transatlantic sandwich war. How one company gained customers and reduced cost by including a meal in the ticket instead of charging additionally for it. It is old but the example is as valid today as then.


User currently offlineMaverickM11 From United States of America, joined Apr 2000, 17439 posts, RR: 46
Reply 110, posted (2 years 4 months 4 days 8 hours ago) and read 2933 times:

Quoting cmf (Reply 109):
Doesn't change anything and most importantly does not help your cost/revenue is all there is to look at.

If product is so important why do people still choose to fly US carriers? Why does AF replace some of its US flying with DL? Why was LH making loads of money when it didn't have a single PTV in Y, a sad J product, and an archaic F? Why do KL, NZ, EK, and AF all put 10 across on their 777s? Why do LA and JJ offer no F on their regional narrowbody flying? Why is CM PRINTING money with essentially the same product as CO? Why did people not leave other carriers in droves for AA's MRTC? Or CO's meals at meal time? Why does B6 have one of the lowest average fares out there yet one of the nicest products? Why has VX lost almost a billion dollars trying to push a "great product"? Where are Maxjet, Eos, Silver Airways now? Why couldn't SQ steal all the traffic from carriers with subpar products on LAXTPE or SFOICN? Why can't QF seem to make much of anything work outside of its core markets? Why has KF turned into a spectacular disaster while the bare bones Indian LCCs are surviving?

Quoting cmf (Reply 109):
There are a lot of places where I for all practical reasons have a choice of one. But there are plenty of places where I have alternatives.

Name one.

Quoting cmf (Reply 109):
I still would like you to explain why people pay the higher business fare in Europe when you state the product is equal to economy.

If people pay for product, why don't EU carriers create a true first class seat and experience?

Quoting cmf (Reply 109):
Funny thing is that you insist on taking out premium classes though they are frequently stated as being the most profitable part of airlines operations.

Premium longhaul is a bit different, but it follows roughly the same pattern. How else do you explain people willingly paying for AF/AZ/LH/OS/IB's biz seat? Because people want to go where they want, when they want, and for the right price. Product is way down the list.

Quoting cmf (Reply 109):
Read up on the 1954 transatlantic sandwich war.

Or you could just look at what's happening now, in the airline industry.



E pur si muove -Galileo
User currently offlinecmf From , joined Dec 1969, posts, RR:
Reply 111, posted (2 years 4 months 4 days 2 hours ago) and read 2864 times:

Quoting MaverickM11 (Reply 110):
If product is so important why do people still choose to fly US carriers?

Because it is always the complete package that counts. The hard product that you now single in on is just one part.

But the premise of your objections fall apart with the simple: Why did LH spend money on upgrading their product?

Quoting MaverickM11 (Reply 110):
Name one.

I already gave you several. What's wrong with them?

Quoting MaverickM11 (Reply 110):
If people pay for product, why don't EU carriers create a true first class seat and experience?

Because you tailor the product to the types of demand you have and what your customers are prepared to pay for. Most flights in Europe are short. Too few customers are prepared to pay for a La-Z-Boy. But they are prepared to pay the significant premium for the rest of the product.

When will you address why people pay that premium for what you try to equalize with economy class?

Quoting MaverickM11 (Reply 110):
Premium longhaul is a bit different, but it follows roughly the same pattern. How else do you explain people willingly paying for AF/AZ/LH/OS/IB's biz seat? Because people want to go where they want, when they want, and for the right price. Product is way down the list.

People are paying some 5 times as much for flying business class over economy on those flights. Is that because they like to pay more or because the product is different? Even your own examples show product is what allow the airline to increase revenue.

Quoting MaverickM11 (Reply 110):
Or you could just look at what's happening now, in the airline industry.

And therein lies a lot of your mistakes. By reducing issues down to just one or two parameters you lose the holistic view. Ignoring history means repeating mistakes.

Companies do not get customers from revenue and cost. They get customers from providing products the customers find valuable. You seem to equalize product with the hard product inside the plane. But the product is much more. Among them are the soft product on the plane, route network, schedule on those routes, benefits from frequent flier programs and price. It all comes down to value.

Customers will select who to fly with based on that value. They will not select on just the hard product. They will not select on just the hard and soft product in the plane. They will select on the value of the total. Often loyalty programs will skew it towards the airline with the largest number of routes from where you fly. That is part of the product.

If I'm a bad manager who only look at revenue and cost I can easily create plenty of extra revenue by increasing the price and thus show better profit. But because I do it in isolation of the product it is almost certain to be short lived as customers find the new situation less valuable and will push them to competitors.

It is only if your competition do similar price changes or you have in practice monopoly you can keep the revenue increase over time. In all other cases I must change my product so customers continue to think it is good value.

This is also why it is easy to "buy" customers by lowering prices. But it will reduce your margin and that isn't good for investors. There are good reasons to do it for short periods of time. There are sometimes outsides reasons to do it over long time. But when it is done over long time by all players in a region and they bear the cost, then it is a sign of dysfunctional companies. And that is pretty much what you suggest is what ROW should take away from US. I bloody hope not.


User currently offlinedelta2ual From United States of America, joined Dec 2007, 620 posts, RR: 1
Reply 112, posted (2 years 4 months 3 days 20 hours ago) and read 2826 times:

Quoting Superfly (Reply 57):
My guess is that the top execs at SQ, TG, CX and CI don't make as much as the top execs at Delta and CO/UA.

I would go one step further and say that all of these airlines have total labor costs far below most US carriers. Go to any store that sells clothes in the US, most of the labels will say "Made in....."; and it's rarely "Made in the USA". There is a reason for this and it's not the quality of the fabric, it's the cost of labor. China, Bangladesh, India, even Mexico all have workers that are willing to work for pennies on the dollar. Unfortunately, you can't live in the US and raise a family on $40 per day (if they even make that). I don't know how much the Singapore girls make, but I am pretty sure it's not $60,000+ per year. When you throw in the cost of benefits, especially health care costs because we have no government paid healthcare, and US carriers are at a significant disadvantage. Unfortunately, there is simply no way to bring labor costs down to those levels. Even if US carriers decided to only pay crew members $20,000 per year, pay no (or little) benefits, and make them retire after 5 or 7 years, labor laws would quickly put an end to that. Plus, in my experience, hiring Americans at those levels in the US would not equal great customer service. At my hospital, we have many nurses from the Philippines who came here on hospital-sponsored green cards. They are extremely hard-working and give great customer service; unfortunately, they never say "no" to anything: mandatory OT, increased patient loads, pay and benefit decreases, etc. They are generally much more compliant than American nurses are. Maybe it's a cultural thing; I'm only saying what I see in my experience over the last 10 years here in Chicago.



From the world's largest airline-to the world's largest airline. Delta2ual
User currently offlineViscount724 From Switzerland, joined Oct 2006, 25154 posts, RR: 22
Reply 113, posted (2 years 4 months 3 days 11 hours ago) and read 2747 times:

Quoting MaverickM11 (Reply 103):
EU carriers rarely even bother with a separate cabin configuration for regional first, unlike the US which has dedicated seats--none of which can be squeezed/expanded to fit more or fewer people. If EU carriers idea of regional first is "we'll fold down a tray table and put up a curtain", it's clear that the premium regional market just isn't worth it--that ship has long sailed.

On the typical 60 to 90 minute (and often shorter) routes within Europe, other things are more important to passengers than the seat. And most carriers guarantee an empty seat next to you in the European business class (it's business, not first). Things like lounge access (remember that US carriers do not give you free lounge access even if you pay the full domestic F class fare, with only rare exceptions), additional free baggage allowance, many more frequent flyer miles and faster access to Elite status, faster boarding/deplaning, free newspapers, and better meals/snacks/drinks, are important to many business travellers. The business class fares are also much less restrictive in terms of rebooking and cancellation.

Another big difference is that many passengers in the F class cabins on domestic US flights have not paid the F fare but are there because their elite FFP status gives them a free upgrade. That doesn't happen in Europe. If you want a seat in business class, you pay for it or redeem FFP miles.


User currently offlineAngMoh From Singapore, joined Nov 2011, 483 posts, RR: 0
Reply 114, posted (2 years 4 months 3 days 10 hours ago) and read 2731 times:

Quoting delta2ual (Reply 112):
I would go one step further and say that all of these airlines have total labor costs far below most US carriers.

Recently there was a document from EK arguing their success was not due to subsidies while EU carriers have lots of subsidies. This was of course part of their agenda to get more access to some airports. In it they list fuel, labour and other costs. It is discussed here:

http://blogs.crikey.com.au/planetalk...factual-debate-on-state-subsidies/

Of course it goes all the way from the cleaner to the CEO. And according to this LH is by far the highest cost, but they are still profitable...


User currently offlineAngMoh From Singapore, joined Nov 2011, 483 posts, RR: 0
Reply 115, posted (2 years 4 months 3 days 10 hours ago) and read 2726 times:

Quoting Viscount724 (Reply 113):
On the typical 60 to 90 minute (and often shorter) routes within Europe, other things are more important to passengers than the seat. And most carriers guarantee an empty seat next to you in the European business class (it's business, not first). Things like lounge access (remember that US carriers do not give you free lounge access even if you pay the full domestic F class fare, with only rare exceptions), additional free baggage allowance, many more frequent flyer miles and faster access to Elite status, faster boarding/deplaning, free newspapers, and better meals/snacks/drinks, are important to many business travellers. The business class fares are also much less restrictive in terms of rebooking and cancellation.

Also cost of business class seat within Europe is not much higher than a economy class seat with full flexibility (no rebooking and cancellation fees). At one route I looked at last week, it was 198 euro for economy with restrictions, 435 euro for economy without restrictions and 465 euro for Business. This was on LH.


User currently offlinedelta2ual From United States of America, joined Dec 2007, 620 posts, RR: 1
Reply 116, posted (2 years 4 months 2 days 21 hours ago) and read 2618 times:

Quoting AngMoh (Reply 114):
Recently there was a document from EK arguing their success was not due to subsidies while EU carriers have lots of subsidies. This was of course part of their agenda to get more access to some airports. In it they list fuel, labour and other costs. It is discussed here:

http://blogs.crikey.com.au/planetalk...factual-debate-on-state-subsidies/

Of course it goes all the way from the cleaner to the CEO. And according to this LH is by far the highest cost, but they are still profitable...

I think Emirates has done many things right. They invest a lot of money into their product and their marketing. Certainly nobody would dispute that. Some things from the "data" of this article that stand out to me:

1) UA's employee costs are higher than AA's? That's news to me.

2) Malaysia Airlines is misspelled as Malaysian; sorry that stuff bothers me in a "factual" report.

3) Subsidies aside, Emirates itself admits to enjoying a tax-free environment in Dubai. Even though all airlines that fly there enjoy this gift, if your main hub with the majority of flights is in Dubai, not having to pay tax on fuel for 50% of your flights has to be a benefit, doesn't it?

4) The chart that says "Emirates unit costs of $11.75USD is comparable to its peers SQ and CX" perplexes me. CX's unit cost is $13.99 while SQ's is $16.22. Is that considered "comparable"?

5) The ME governments appear to have invested in infrastructure and made the cost of doing business a little better than many western governments. I'm sure BA wishes they had even 1/10th the support from the UK gov't and LHR.

Of course, I'm just responding to the posted article; whether UA charges or doesn't charge for alcohol is irrelevant. I think UA has bigger fish to fry at the moment.



From the world's largest airline-to the world's largest airline. Delta2ual
User currently offlinecmf From , joined Dec 1969, posts, RR:
Reply 117, posted (2 years 4 months 2 days 20 hours ago) and read 2598 times:

Quoting delta2ual (Reply 116):
Malaysia Airlines is misspelled as Malaysian; sorry that stuff bothers me in a "factual" report.

The company name is Malaysian Airline System Berhad. They now do business as Malaysia Airlines.

Quoting delta2ual (Reply 116):
not having to pay tax on fuel for 50% of your flights has to be a benefit, doesn't it

It is my understanding they don't pay tax on 100% of their flights. Just as no other airline pay taxes on international flights.


User currently offlineMaverickM11 From United States of America, joined Apr 2000, 17439 posts, RR: 46
Reply 118, posted (2 years 4 months 2 days 14 hours ago) and read 2539 times:

Quoting cmf (Reply 111):
Why did LH spend money on upgrading their product?

Because their J product is not lie flat. They're also removing F from most 744s and 340s.

Quoting cmf (Reply 111):
I already gave you several. What's wrong with them?

They all generate a premium because of their location, not their facilities.

Quoting cmf (Reply 111):
When will you address why people pay that premium for what you try to equalize with economy class?

They're a small percentage of the total spend. The product really follows the spend, not the other way around. The product in the US/EU didn't precipitate the decline in unit revenues--it was the other way around.

Quoting cmf (Reply 111):
People are paying some 5 times as much for flying business class over economy on those flights.

People will pay for lie flat, but again there's a very finite number of routes where that works; beyond that not much is going to drive any kind of premium, whether it's wines, meals, IFE, headrests, whatever. Having lie flat on BKKHKG--not likely to be a long term viable proposition.

Quoting cmf (Reply 111):
By reducing issues down to just one or two parameters you lose the holistic view. Ignoring history means repeating mistakes.

People buy tickets the same around the world, with the same motivations--schedule and price are the biggest drivers by far. And what you see happening in the US and EU is a precursor to anywhere else where competition continues to expand and barriers to entry are reduced.

Quoting delta2ual (Reply 116):
The ME governments appear to have invested in infrastructure

...to the point of DXB essentially going broke and being bailed out by AUH. The reason EK/QR/EY succeed is because their governments support them--even if it's not a lone dollar spent directly on them--while EU/US governments are constantly trying to find new ways to kill their carriers.



E pur si muove -Galileo
User currently offlinecmf From , joined Dec 1969, posts, RR:
Reply 119, posted (2 years 4 months 2 days 13 hours ago) and read 2508 times:

Quoting MaverickM11 (Reply 118):
Because their J product is not lie flat. They're also removing F from most 744s and 340s.

Which they of course wouldn't do if product doesn't matter.

Quoting MaverickM11 (Reply 118):
They all generate a premium because of their location, not their facilities.

I.e. they provide a product with better value. Be that more convenience or lower price. Not every customer see it the same.

Quoting MaverickM11 (Reply 118):
They're a small percentage of the total spend. The product really follows the spend, not the other way around. The product in the US/EU didn't precipitate the decline in unit revenues--it was the other way around.

The simple fact they maintain business class show the airlines find it significant.

But I like to see you provide data to support that business class is a small part of European revenue.

Of course they will tailor the product to what customers want to spend. That is how you keep revenue and cost under control. Once again you make my point.

Quoting MaverickM11 (Reply 118):
People will pay for lie flat, but again there's a very finite number of routes where that works; beyond that not much is going to drive any kind of premium, whether it's wines, meals, IFE, headrests, whatever

Again you show product matters. You just state some parts are more important than others.

Quoting MaverickM11 (Reply 118):
People buy tickets the same around the world, with the same motivations--schedule and price are the biggest drivers by far.

Schedule and price are important parts of the product. many other parts matter too. Why have airlines spent fortunes on upgrading IFE? Answer: because you lose customers if your product isn't up to par. Same goes for many other parts of the product. Each part may not be that important but remove enough of them and customers will select alternatives.

Every company must understand their product. It is what drives revenue and (should) drive the majority of costs. Neglecting the product will stop revenue. Look at Kodak. Incredible revenue. Then digital photography took over and revenue disappeared.

You can try to sidestep the product all you want but name one company that isn't defined by the product they offer. Now tell me product isn't the most important part of a company. The one thing that drives everything else. The only way you can have revenue. Looking forward to see what you come up with.


User currently offlineMaverickM11 From United States of America, joined Apr 2000, 17439 posts, RR: 46
Reply 120, posted (2 years 4 months 2 days 10 hours ago) and read 2447 times:

Quoting cmf (Reply 119):

Which they of course wouldn't do if product doesn't matter.

I've said a small segment pays dearly for lie flat. Not nearly enough to support the amount of "frills"that once upon a time were available in the US, now the EU, and currently in Asia. Again, the decline in product lagged the decline in unit revenue considerably over the years. Not the other way around.

Quoting cmf (Reply 119):
I.e. they provide a product with better value.

You want to call anything and everything "product". LHR has been an absolute sh!thole for years and people pay a pretty premium to avoid LGW or STN. You want to call that product? Same for CDG, Kai Tak, SVO, LGA, MIA, LAX...

Quoting cmf (Reply 119):
But I like to see you provide data to support that business class is a small part of European revenue.

The fact that it's a modified economy cabin *at best* tells you airlines already know how much people are willing to pay for premium regional European flying.

Quoting cmf (Reply 119):
Schedule and price are important parts of the product

OK now you're just calling everything product.

Quoting cmf (Reply 119):
Why have airlines spent fortunes on upgrading IFE? Answer: because you lose customers if your product isn't up to par

Probably because it causes less of a fortune than maintaining the ancient technology currently onboard--besides, I highly doubt any carrier outside of the Middle East is spending a "fortune"on IFE. There's simply no return on it.



E pur si muove -Galileo
User currently offlinecmf From , joined Dec 1969, posts, RR:
Reply 121, posted (2 years 4 months 2 days 8 hours ago) and read 2408 times:

Quoting MaverickM11 (Reply 120):
I've said a small segment pays dearly for lie flat.

A large enough segment to make it worthwhile for airlines to keep it around. Even upgrade it. There are reasons why not every airline is operated like Ryanair.

Quoting MaverickM11 (Reply 120):
You want to call anything and everything "product".

I cant call it revenue or cost. What other than product can it be called? It is what the airline is selling, thus product.

Quoting MaverickM11 (Reply 120):
The fact that it's a modified economy cabin *at best* tells you airlines already know how much people are willing to pay for premium regional European flying.

So no data to support your claim.

Quoting MaverickM11 (Reply 120):
OK now you're just calling everything product.

Product: the totality of goods or services that a company makes available.

Quoting MaverickM11 (Reply 120):
Probably because it causes less of a fortune than maintaining the ancient technology currently onboard--besides, I highly doubt any carrier outside of the Middle East is spending a "fortune"on IFE. There's simply no return on it.

Why provide it at all if it has no return? Some middle east airlines are providing a larger selection but the hardware cost difference for providing 50, 100, or 500 video streams is minimal compared to the cost of installing the basic system and thus not much different from what ME airlines are spending.


Outstanding issues for you to answer:
Data supporting business class on European routes is small part of revenue.
A company being defined by revenue and cost and not product.


User currently offlinecmf From , joined Dec 1969, posts, RR:
Reply 122, posted (2 years 4 months 20 hours ago) and read 2246 times:

Quoting MaverickM11 (Reply 106):
Nope, outside of discretionary premium class traffic, product matters very little independent of price.

Flybe didn't get your memo. Flybe Announces "Brand Re-positioning"


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