TheGov
Topic Author
Posts: 370
Joined: Wed Apr 30, 2003 6:44 am

LCC...please Explain

Sun Jun 22, 2003 12:12 am

Back in the early nineties when I was working for Delta, the rumor started going around that Delta was going to start a Low Cost Carrier. When I heard that, I was somewhat confused.

My reasoning went something like this: I’m a gate agent at gate 5. Next to me at gate 6 is the LCC aircraft.
- The same company owns both aircraft.
- Both sets of employees are paid by and trained by the same company.
- The aircraft are serviced by the same mechanics and flight dispatchers, and the pilots and flight attendants are trained at the same facility.
So, how can you call this a low cost arm of a major carrier? Just because there is different signage?

I know that most majors spin off their LCCs as separate divisions, but I still do not see the economic benefits. What does, in fact, happen? Does the major carrier cede some routes to the LCC, i.e. New York – Florida?

When it comes to the LCCs, I understand the following:
- I’m making more per hour than the guy next to me is, so there is one benefit. In addition, I’m sure the pilots and flight attendants are either earning less or working more for the same amount of money than they would at the major carrier.
- My passengers are probably paying in the neighborhood of 20% more just to get on my plane to go to the same area i.e. Florida or New York.

My final question is this: Why the need for the LCC when you should just lower your prices on the routes where you compete with a LCC and obtain wage and work concessions system-wide to compensate for it?

Can someone please explain to me the rationale behind the LCC trend? And with the disappearance of Continental Lite, MetroJet, Shuttle by United, what makes Delta think that Song will make it? And now, all of the sudden, why is this trend showing up in the Gulf States with the start of Gulf Traveler?

I guess that is why they call it a trend…it is unexplainable.
Always a pallbearer, never a corpse.
 
m717
Posts: 540
Joined: Tue Dec 31, 2002 1:01 pm

RE: LCC...please Explain

Sun Jun 22, 2003 12:18 am

"In addition, I’m sure the pilots and flight attendants are either earning less or working more for the same amount of money than they would at the major carrier."

At Song, the FAs are "new hires" hired directly into Song, and do make less than their counterparts at Delta. However, the Song aircraft are piloted by Delta pilots. This means they are operating under the same contract (pay, work rules, etc.) as any other Delta pilot.
 
HeavyMX1
Posts: 241
Joined: Wed Jun 04, 2003 4:09 am

RE: LCC...please Explain

Sun Jun 22, 2003 12:50 am

Hmmm....This seems to be run like another LCC that is NOT operating anymore. MetroJet .... Its amazing how your planes always go out full but you cant make a profit cause your trying to run a LCC with mainline employees. Not that I have expertise, but I give song 2 years if the market doesnt change .
I am better than you because I live on an Island
 
backfire
Posts: 3467
Joined: Fri Oct 06, 2006 8:01 am

RE: LCC...please Explain

Sun Jun 22, 2003 1:24 am

I think it was BA's Rod Eddington who said that he didn't believe an airline could profitably run a full-service and no-frills operation in the same market - hence the sale of Go.
 
MIA777
Posts: 1110
Joined: Thu Sep 05, 2002 10:47 am

RE: LCC...please Explain

Sun Jun 22, 2003 1:40 am

What amazes is me is how mainline carriers can still charge so much for tickets. It would cost me over 400 dollars to fly to Orlando (from MIA). However it costs only 119 dollars to fly FLL-LGB. Amazing. I know the route coverage is much more extensive for mainline carriers but I think they are only good for international ops. I would choose TVs and leather seats over the crappy AA product on the same route any day...I hope LCCs take over the domestic (big city-big city) sector...leave regional and international flying to the biggies...
MIA777
 
WMUPilot
Posts: 1428
Joined: Thu Jan 30, 2003 2:48 am

RE: LCC...please Explain

Sun Jun 22, 2003 2:09 am

It would be nice to see United or American running a regional service for say Southwest or ATA. Big change in the picture there
JetBlue - Bringing humanity back to air travel
 
luv2fly
Posts: 11056
Joined: Tue May 13, 2003 2:57 am

RE: LCC...please Explain

Sun Jun 22, 2003 6:02 am

I believe the airlines that are now trying to be both mainline full service and also operate as a LCC's should really just worry about getting there act together before trying to be all things to all people.
You can cut the irony with a knife
 
lmml 14/32
Posts: 2358
Joined: Tue Jan 30, 2001 2:27 am

RE: LCC...please Explain

Sun Jun 22, 2003 6:43 am

It could be that what the majors are doing is playing the LCC game along with LCC stand-alone carriers. As they learn the tricks of the trade, and loose a few million in the process (which they can afford), the LCC's will be flown right out of the market and start waning and fading out. And so it will have turned a full circle.
 
m717
Posts: 540
Joined: Tue Dec 31, 2002 1:01 pm

RE: LCC...please Explain

Sun Jun 22, 2003 6:48 am

"As they learn the tricks of the trade, and loose a few million in the process (which they can afford), the LCC's will be flown right out of the market and start waning and fading out."

Highly, HIGHLY doubtful. It seems the nay-sayers were saying the same thing about SWA 30 years ago.

Sure, there will be certain carriers that will "fade out", both LCC and majors. But the low-cost carrier concept is here to stay, and there will be most definitely be low cost carriers among the long term survivors.

 
aamd11
Posts: 867
Joined: Sat Nov 17, 2001 11:54 am

RE: LCC...please Explain

Sun Jun 22, 2003 7:49 am

I'm gonna get a flaming for this one, gut feeling...

"As they learn the tricks of the trade, and loose a few million in the process (which they can afford), the LCC's will be flown right out of the market and start waning and fading out."


Thats what Milty and his goons at the top of AC figured...
They blew millions trying to crush westjet, canjet, C3, and the likes...
now look at the state they are in.
Concentrate on what your airline does, Do NOT try to be everything to everyone, as AC did, it takes you places you don't wanna be!

A^A MD-11



 
L.1011
Posts: 2164
Joined: Mon Aug 13, 2001 7:46 am

RE: LCC...please Explain

Sun Jun 22, 2003 7:58 am

My opinion is that at the 1990 meeting of the Leauge of Evil Airline Executives they decided to make crappy LCCs that were supposed to fail with the hope of giving LCCs a bad name and driving them out of the market.  Big thumbs up
 
luv2fly
Posts: 11056
Joined: Tue May 13, 2003 2:57 am

RE: LCC...please Explain

Sun Jun 22, 2003 8:07 am

Also a problem with the majors as I see it, there is now no difference between a major airlines flight and a LCC's flight! Or if you fly JetBlue you have advance seats, FF program, snack, drinks, motivated and employees who really appreciate my dollars and free entertainment. Now if I fly AA from JFK to LGB I get, advance seats, FF program, a drink, no snacks, and entertainment is questionable depending on type of aircraft and I may or may not get employees who care that I chose them that day for my flight. It use to be that the LCC's had a reputation of shoddy service and old planes, now the tide has turned. New planes and good service.
You can cut the irony with a knife
 
UALPHLCS
Posts: 3233
Joined: Thu Jun 28, 2001 5:50 am

RE: LCC...please Explain

Sun Jun 22, 2003 12:39 pm

LUV2fly,
So by your reasoning eventually Jetblue's aircraft will get old and crappy, and its employss will eventually not care after they have successfully run the big carriers out of buisness, and you'll have to move to a new carrier that is just a twinkle in someones eye at this point.
A little less Hooah, and a little more Dooah.

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