flyboyaz
Posts: 2077
Joined: Sat Sep 13, 2003 11:32 am

Fare War: LAX/SFO To JFK/BOS

Wed Oct 15, 2003 3:32 am

Looking for some opinions on how you think the big 3 (AA, UA, DL) will handle having to match HP's fares on their new nonstop transcontinental flights.

Looking at availability the nonstop fare from LAX-JFK, one way on 10/25...the day before HP starts their service... is $929 on all three airlines. From then on they are matching (or pretty close) HP's one way fare of $314. That's a big decrease!

Assuming the HP flights will last....can the big 3 manage to take that much of a cut on the revenue from flights I would consider to be pretty much the bread n' butter of their domestic service?

I see that AA is still flying nonstop from JFK-LGB...but LAX is a whole different story!
Catch a ride on a smile!
 
desertjets
Posts: 7587
Joined: Fri Feb 18, 2000 3:12 pm

RE: Fare War: LAX/SFO To JFK/BOS

Wed Oct 15, 2003 3:51 am

With just 2 flights a day in each direction you'd think that the big 3 shouldn't worry. But looking at advance purchase business/first class fares they start at a low of ~ $1200 before America West starts non-stop service, and drop to ~$820 after HP starts flying non-stop between LAX and JFK. Granted only 2 A319s a day is small potatoes compared to 6-7 767-200s that American and United are running, especially counting premium seats... the impact can be seen. Plus America West is offering some really nice offers too. Fly two roundtrips on the new coast-to-coast nonstops and you get Silver elite status for 2004.
Stop drop and roll will not save you in hell. --- seen on a church marque in rural Virginia
 
andersjt
Posts: 367
Joined: Tue Jul 22, 2003 3:50 am

RE: Fare War: LAX/SFO To JFK/BOS

Wed Oct 15, 2003 5:09 am

A benefit from the fare war may to be generate interest in getting flyers to travel that otherwise would not. If so, then all should benefit by filling seats that might go empty. JetBlue and American will see traffic drop off out of LGB now that LAX has a cheaper alternative.
Oh how I long for the day when the skies were truly Friendly!
 
prosa
Posts: 5389
Joined: Sat Oct 27, 2001 3:24 am

RE: Fare War: LAX/SFO To JFK/BOS

Wed Oct 15, 2003 5:34 am

JetBlue and American will see traffic drop off out of LGB now that LAX has a cheaper alternative.

Price isn't the only factor. I flew JFK-LAX on AA in 2001 and JFK-LBG on B6 in 2002. Without question, I'd use LGB again unless it were significantly more expensive than flying into LAX. LGB is ultra-convenient and uncrowded, totally unlike the madhouse at LAX. The rental cars are about a three-minute walk from the gates, no slow shuttle buses required as at LAX!
"Let me think about it" = the coward's way of saying "no"
 
Leskova
Posts: 5547
Joined: Wed Oct 08, 2003 3:39 pm

RE: Fare War: LAX/SFO To JFK/BOS

Wed Oct 15, 2003 5:43 am

Doesn't this smell just a bit like predatory pricing? I remember that (I think) AA had to get through some legal proceedings concerning behavior like that a while back, but I guess since HP is already a well established airline and generally not a "new entrant" (with the obvious exception of this routing), the big ones will probably not have to fear any problems resulting from this, or will they?

I mean, reducing the fare from $900 to $300 is a little more than what can be explained by pure "goodwill" or wanting to get some new customers...
Smile - it confuses people!
 
ATA767
Posts: 418
Joined: Wed Jul 23, 2003 6:33 am

RE: Fare War: LAX/SFO To JFK/BOS

Wed Oct 15, 2003 6:43 am

From the looks of things both UA and CO has had to drop there fare on the EWR-SFO routes and ATA is still the cheapest non-stop on that route. These LCC are really going to force fares down and not sure the big boys will be able to counter easily.
 
flyboy7974
Posts: 1210
Joined: Sat Jan 18, 2003 4:35 pm

RE: Fare War: LAX/SFO To JFK/BOS

Wed Oct 15, 2003 6:43 am

just checked on line and i received an email from america west that the fare one way is down to $99, but that's probably without taxes and airport fees
 
flyboyaz
Posts: 2077
Joined: Sat Sep 13, 2003 11:32 am

RE: Fare War: LAX/SFO To JFK/BOS

Wed Oct 15, 2003 7:34 am

The $99 is a special that according to our website expires today! Cheap, cheap, cheap fares!!
Catch a ride on a smile!
 
AAR90
Posts: 3140
Joined: Fri Jan 21, 2000 11:51 am

RE: Fare War: LAX/SFO To JFK/BOS

Wed Oct 15, 2003 7:56 am

Doesn't this smell just a bit like predatory pricing?

Nope.

I remember that (I think) AA had to get through some legal proceedings concerning behavior like that a while back,

Correct, AA won on all counts.

...but I guess since HP is already a well established airline and generally not a "new entrant" (with the obvious exception of this routing), the big ones will probably not have to fear any problems resulting from this, or will they?

The "predatory pricing" issue is not a factor when a company responds to a competitor's pricing by matching that price. If a company is proactive (action prior to competitor's entry) or beats a competitor's price then market monopoly position and possible preditory activity will become a consideration. Until then the courts have consistently maintained that it is not illegal to react by matching a competitor's actions.


*NO CARRIER* -- A Naval Aviator's worst nightmare!
 
AA777MIA
Posts: 671
Joined: Thu Aug 07, 2003 10:30 am

RE: Fare War: LAX/SFO To JFK/BOS

Wed Oct 15, 2003 9:44 am

Predatory pricing...

Put the shoe on the other foot, for an airline to come in and UNDERCUT everyone else, isn't that predatory pricing? I call it competetion! May the best bird win...
 
ATA767
Posts: 418
Joined: Wed Jul 23, 2003 6:33 am

RE: Fare War: LAX/SFO To JFK/BOS

Wed Oct 15, 2003 11:17 am

It actually works well for the consumer in the beginning. I thing that after time and demand levels off the price will rise for both the established and the new entrant. Certain routes never make it even without competition. ATA dropped SFO-PIE after 6 months or so because the demand and yield was not there. The demand will always be Strong on a SFO-JFK/LAX so in the end all parties will benefit.
 
flyboyaz
Posts: 2077
Joined: Sat Sep 13, 2003 11:32 am

RE: Fare War: LAX/SFO To JFK/BOS

Wed Oct 15, 2003 11:24 am

Well the intent of introducing the service was not to put anyone out of business. It was simply to give our passengers an easier way to get to where they want to go!

I was bored at work one day and decided to check the number of our passengers travelling between LAX and JFK....with either connections in PHX or LAS. Just in 1 day we had almost 130 passengers...that was probably their reasoning for putting in the nonstops and to perhaps attract more passengers that might use SNA, BUR, LGB, etc. It also eases up the loads on the PHX and LAS flights and lets more people get on them going elsewhere. We no longer use RJ's out of LAX so the point to point service to PHX is gone. Only the flights bound for connecting banks are left.
Catch a ride on a smile!
 
jetdeltamsy
Posts: 2688
Joined: Tue Nov 14, 2000 11:51 am

RE: Fare War: LAX/SFO To JFK/BOS

Wed Oct 15, 2003 1:44 pm

it depends on how much market share hp pulls. i think there's a good chance fares will fall on the big 3.
Tired of airline bankruptcies....EA/PA/TW and finally DL.
 
MX340LOV
Posts: 37
Joined: Fri Oct 10, 2003 8:18 am

RE: Fare War: LAX/SFO To JFK/BOS

Wed Oct 15, 2003 2:21 pm

Ladies and gentleman, what we have here is an oligopoly-like behavior, caused because AA, DL and UA were a de-facto oligopoly in those non-stop segments and they like that and it shows.

I would love to say that the people runign those companies are SOBs, abusing a semi-captive market, but since I am in a good mood today I´ll just thank the free market and deregulation.

Best to all!
F
 
Leskova
Posts: 5547
Joined: Wed Oct 08, 2003 3:39 pm

RE: Fare War: LAX/SFO To JFK/BOS

Wed Oct 15, 2003 3:35 pm

You're right - it's not predatory pricing, although I think that the question whether an airline is reacting or being proactive is not the right way to decide.

To perhaps prove my point, this is a situation that we had here in Germany: LH runs somewhere between 14 and 18 round trips between FRA and MUC daily, and they have a monopoly on that route. A while back, DBA introduced flights on that route and they were a lot cheaper than LH, but only had 5 or 6 round trips per day.

The reaction by LH was that they undercut DBAs fares, if only by a single Euro per ticket - and put massive capacity on the route, flying 744s and 342/343s occasionally, obviously making the lowest fares much more available.

It wasn't long before a court ordered LH to raise its fares above DBAs fares, so they increased them a bit, but retained the higher capacity.

And it didn't take long before DBA anounced that it was pulling the plug on the route - I think they flew that one for only 5 or 6 months.


In this case, LH was only reacting to DBAs fares, it was a decision that consumers profited immensly at first - but just to complete the story - the day after the last DBA flight operated on that route, LH went back to its original, much higher fares and to the lower capacity, even more reducing the availability of the lowest fares.

This is why I think that the reacting/proacting criteria is not the best to decide whether it's predatory or not - but in the case of these coast-to-coast routes it's not HP going against a single big airline, but several, and I'd say that this is the point that makes it non-predatory: even if HP should pull the route, there will still be competition between the other ones...
Smile - it confuses people!
 
BN747
Posts: 5344
Joined: Thu Mar 28, 2002 5:48 am

RE: Aviation Lovers- We Are Not Terrorists. Speak

Wed Oct 15, 2003 3:42 pm

What??? No more HP RJs out of LAX? Say it ain't so!


BN747
"Home of the Brave, made by the Slaves..Land of the Free, if you look like me.." T. Jefferson
 
flyboy7974
Posts: 1210
Joined: Sat Jan 18, 2003 4:35 pm

RE: Fare War: LAX/SFO To JFK/BOS

Wed Oct 15, 2003 5:58 pm

i am glad that somebody else here backs america west, flyboyaz, i fly america west, and only america west, as i am elite with them. thank god for companies like america west that after 9/11 stopped screwing over pax on routes, and offered affordable airfares for once. the airline is safe, the name has changed, and their reputation is much different than 3 or 4 years ago. if i were to fly coach, i would much rather fly hp than ua or aa from lax to any east coast market, because america west lately is making flying not only fun, but affordable again. i am flying from prc to lax the beginning of dec, yes, look at that route, 16 legs total, for under $300. not ua, not aa, but an airline that makes it easier. sorry flyboyaz that you have to put with all the troubles with express down in tus, but, someday, mainline will be back....
 
flyboyaz
Posts: 2077
Joined: Sat Sep 13, 2003 11:32 am

RE: Fare War: LAX/SFO To JFK/BOS

Wed Oct 15, 2003 8:34 pm

Thanks Flyboy1974.....we hope we get mainline back too someday. They are actually telling us that it might be in about another year when we get more planes. We simply do not have enough anymore to fly them to TUS, they would rather use them in markets where they can make more money...makes sense, though doesn't make us happy!

I'm glad you have good experiences with us.....it is fun to fly us now and I always look forward to nonreving....actually with my discount I can buy a confirmed ticket on the new routes for only $169 with tax! Might have to take advantage of that!

Thank you again for your support....and everyone else's for that matter!
Catch a ride on a smile!
 
Pe@rson
Posts: 16030
Joined: Sat Jan 13, 2001 6:29 pm

RE: Fare War: LAX/SFO To JFK/BOS

Wed Oct 15, 2003 8:46 pm

You can get extremely cheap flights (with at least one stop enroute) from LAX to, say, JFK. Indeed, I have seen them at about £70-£90, mainly via ATL and sometimes Florida or via LAS and PHX.
"Everyone writing for the Telegraph knows that the way to grab eyeballs is with Ryanair and/or sex."
 
Guest

RE: Fare War: LAX/SFO To JFK/BOS

Thu Oct 16, 2003 3:31 am

overall the best way to go for cheap price is jetblue. no question about it and i highly doubt traffic on the jfk-lgb route will drop off.

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