JayDavis
Topic Author
Posts: 1870
Joined: Wed Jan 10, 2001 1:09 pm

Remember Southwest Two Fares Structure?

Wed May 10, 2006 8:08 am

Back when I first started to fly them in the mid-70's from LBB to DAL they had Executive Class flights and Pleasure Class flights.

All the flights M-F from 6:00 a.m. (I think) to 6:59 p.m. were the Executive Class fares, from 7:00 p.m. and on, M-F, Pleasure Class fares. Then on the weekend, ALL flights were Pleasure Class fares.

Do you think an airline such as Southwest could still be profitable with just a two-fare type structure? Would it save man-hour costs in terms of filing all the differents fares to all the GDS services and their own website?

Just curious.
 
txagkuwait
Posts: 1388
Joined: Fri Aug 27, 1999 7:39 am

RE: Remember Southwest Two Fares Structure?

Wed May 10, 2006 11:19 am

Jay, I posted about this very topic on another bulletin board a week or so ago.

I'm a huge advocate of a two tier fare structure.

I think it is time to experiment with it again in the TX intrastate.

What it does is generate two separate and distinct markets. It also does utilization in short hauls a whole lot of good (flights go fuller later and Sat/Sun flights are packed).
 
DfwRevolution
Posts: 8549
Joined: Sat Jan 09, 2010 7:31 pm

RE: Remember Southwest Two Fares Structure?

Wed May 10, 2006 11:26 am

Quoting JayDavis (Thread starter):
Do you think an airline such as Southwest could still be profitable with just a two-fare type structure?

WN could do a lot of things and still be profitable.. the question is, how profitable would they be?

I have little doubt that WN's yield management is more sophisticated and more efficent in 2006 than it was in 1976. So much is done electronically that I don't suppose man-hours stand in the way of precisely offering the right price for a seat.
 
DLKAPA
Posts: 7962
Joined: Wed Dec 03, 2003 10:37 am

RE: Remember Southwest Two Fares Structure?

Wed May 10, 2006 11:30 am

The only drawback of a two-tier system is that people paying the higher tier are going to expect a better product than those in the lower tier. How do you differentiate? New interiors on some aircraft but then you need a dedicated fleet. Costs could go up quick if they do decide to switch.
And all at once the crowd begins to sing: Sometimes the hardest thing and the right thing are the same
 
Midway2AirTran
Posts: 847
Joined: Wed Jul 16, 2003 7:34 am

RE: Remember Southwest Two Fares Structure?

Wed May 10, 2006 12:15 pm

Very good question, it would be scary to most carriers if they simplified to two fares.

Generally the more fares you have, the more options you have to generate the most revenue out of the passenger. It's almost like buying a car from a used car lot. Technology makes another twist in the game too.

I personally feel that simplifed fare structures benefit customer service and cost savings by eliminating complication.

However many IMO have gone too far (mostly Legacy carriers) with this and it backfires, turning potential passengers away.

Southwest is still fairly simple, I believe 6-7 fare tiers; same goes for other lowfare carriers too. Notice that I mentioned "lowfare", not just LCCs!!

As with anything, its all about balance!
"Life is short, but your delay in ATL is not."
 
JayDavis
Topic Author
Posts: 1870
Joined: Wed Jan 10, 2001 1:09 pm

RE: Remember Southwest Two Fares Structure?

Thu May 11, 2006 6:26 am

Well when WN had the two-fare structure, the only difference was that on the Executive Class flights, drinks were free !!  Smile

I think that was the only difference, PLUS, the time of day the flights were, that was the only difference.

TxAgKuwait, I wonder if somebody with a TON of cash to plow through could start another LCC within Texas? Maybe with some Dash 8's, the new ones that are REALLY fast and quiet? Just a thought.

p.s. We (Texas Tech !!) creamed your team in football last year!  Smile


Jay

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