gh123
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Why Doesn't AA Have 'Economy Plus' On The 777s?

Sun Dec 10, 2006 4:58 am

Why doesn't AA have an Economy Plus section on their 777s?

On the 777s they have two Economy cabins - why have they not introduced a 'plus' section on the forward one. In my mind it would work perfectly.

http://www.aa.com/content/aboutUs/ou...nes/boeing777AtlanticSeating.jhtml

There are a lot of very well informed people on this forum who know much about the Airline business and its economics and perhaps some of you could explain this to me.

Thanks!

[Edited 2006-12-09 20:59:05]
 
FriendlySkies
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RE: Why Doesn't AA Have 'Economy Plus' On The 777s?

Sun Dec 10, 2006 5:09 am

They used to...it was called More Room Throughout Coach.

I don't know exactly why, but they canceled that and added rows back. Probably to make more money.
 
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fxramper
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RE: Why Doesn't AA Have 'Economy Plus' On The 777s?

Sun Dec 10, 2006 5:16 am

We are saving money to buy new a/c.

Signed.

G. Arpey
 
commavia
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RE: Why Doesn't AA Have 'Economy Plus' On The 777s?

Sun Dec 10, 2006 5:57 am

Quoting FriendlySkies (Reply 1):
Probably to make more money.

Actually, it was to lose less.

Customers complained and complained about legroom, so American listened and gave passengers more legroom than any other airline in the United States in every single seat.

Guess what happened? The same people who had complained said to American, "wow, that's great," and then promptly clicked over to Orbitz to buy their $198 round-trip fare on Delta.

Legroom, much like food and inflight entertainment, is something that the vast majority of travelers complain about often and constantly ask to be improved, but when push comes to shove, almost nobody is willing to pay more for it.
 
gh123
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RE: Why Doesn't AA Have 'Economy Plus' On The 777s?

Sun Dec 10, 2006 5:59 am

Quoting Commavia (Reply 3):
Legroom, much like food and inflight entertainment, is something that the vast majority of travelers complain about often and constantly ask to be improved, but when push comes to shove, almost nobody is willing to pay more for it.

That's a fair point.
 
Boston92
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RE: Why Doesn't AA Have 'Economy Plus' On The 777s?

Sun Dec 10, 2006 6:05 am

I think there needs to be something in between a 200 dollar coach seat with a 2000 dollar first/business seat. UA has all ready seemed to nail that. I would have thought that airlines would have followed them by now.
"Why does a slight tax increase cost you $200 and a substantial tax cut save you 30 cents?"
 
jacobin777
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RE: Why Doesn't AA Have 'Economy Plus' On The 777s?

Sun Dec 10, 2006 6:08 am

Quoting FriendlySkies (Reply 1):
They used to...it was called More Room Throughout Coach.

I don't know exactly why, but they canceled that and added rows back. Probably to make more money.

MRTC wasn't exactly e+....as it wasn't a different class like UA, BA, VS, NZ, etc. have.

E+ might be interesting...but it doesn't seem that is the direction AA wants to head right now...
"Up the Irons!"
 
Boston92
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RE: Why Doesn't AA Have 'Economy Plus' On The 777s?

Sun Dec 10, 2006 6:15 am

Quoting Jacobin777 (Reply 6):
as it wasn't a different class like UA

E+ in UA is not a different class. E- and E+ is all economy. The fares all cost the same. Once all the E- seats are full, they will put you in E-, or you can upgrade from E- for a fee.
"Why does a slight tax increase cost you $200 and a substantial tax cut save you 30 cents?"
 
sevenair
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RE: Why Doesn't AA Have 'Economy Plus' On The 777s?

Sun Dec 10, 2006 6:30 am

Quoting FXramper (Reply 2):
We are saving money to buy new a/c.

But if you charge a premium, surely this makes you more money??
 
floridaflyboy
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RE: Why Doesn't AA Have 'Economy Plus' On The 777s?

Sun Dec 10, 2006 6:32 am

Quoting FXramper (Reply 2):
We are saving money to buy new a/c.

Signed.

G. Arpey

Nice!

Quoting Commavia (Reply 3):
Guess what happened? The same people who had complained said to American, "wow, that's great," and then promptly clicked over to Orbitz to buy their $198 round-trip fare on Delta.

Peole always talk out of both sides of their mouth.
Good goes around!
 
LAXintl
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RE: Why Doesn't AA Have 'Economy Plus' On The 777s?

Sun Dec 10, 2006 6:40 am

Quoting Boston92 (Reply 7):
E+ in UA is not a different class. E- and E+ is all economy. The fares all cost the same

Yes and No.

While the base fare might be the same in theory be the same, for access to the E+ section unless if you are a premium United flyer you'll need to pay for access either via an "upgrade" fee or purchasing an annual pass for E+ access.
Off course you might end up in E+ by default in case of a full flight, however United does actively promote and differentiate the products.
I remember reading someplace that the product was producing $100million in additional incremental revenues for the company.
From the desert to the sea, to all of Southern California
 
jacobin777
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RE: Why Doesn't AA Have 'Economy Plus' On The 777s

Sun Dec 10, 2006 7:04 am

Quoting Boston92 (Reply 7):
E+ in UA is not a different class. E- and E+ is all economy. The fares all cost the same. Once all the E- seats are full, they will put you in E-, or you can upgrade from E- for a fee.



Quoting Laxintl (Reply 10):

Yes and No.

While the base fare might be the same in theory be the same, for access to the E+ section unless if you are a premium United flyer you'll need to pay for access either via an "upgrade" fee or purchasing an annual pass for E+ access.
Off course you might end up in E+ by default in case of a full flight, however United does actively promote and differentiate the products.
I remember reading someplace that the product was producing $100million in additional incremental revenues for the company.

 checkmark ..thanks for explaining it like the way I should have done.. Smile

Regardless..all of the other aforementioned carriers have E+ which is a diffferent class...


AA ended MRTC as Commavia correctly stated...
"Up the Irons!"
 
commavia
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RE: Why Doesn't AA Have 'Economy Plus' On The 777s?

Sun Dec 10, 2006 7:04 am

Quoting Sevenair (Reply 8):
But if you charge a premium, surely this makes you more money??

Therein lies the problem, though.

AA thought that with MRTC, it could generate a revenue premium over other airlines. That didn't happen. People cheered and applauded that AA was giving them more room, and then they went right back to booking the cheapest ticket regardless of whether it had more room or not.

As long as that is how the public behaves, less-than-MRTC is what they'll get.
 
flydreamliner
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RE: Why Doesn't AA Have 'Economy Plus' On The 777s?

Sun Dec 10, 2006 7:42 am

Quoting Commavia (Reply 3):
Legroom, much like food and inflight entertainment, is something that the vast majority of travelers complain about often and constantly ask to be improved, but when push comes to shove, almost nobody is willing to pay more for it.

There are a number of people willing to pay more for the room, but it varies with the flight. $50 to have the space on a 12 hours flight is not the same as $30 to have the room on a 1hr 10 minute flight.

MRTC was great, and I tried to fly AA just for that reason, and I've since stopped when it left... people will pay more for it, just not on every flight.
"Let the world change you, and you can change the world"
 
JC5280
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RE: Why Doesn't AA Have 'Economy Plus' On The 777s?

Sun Dec 10, 2006 7:52 am

Quoting Commavia (Reply 3):
but when push comes to shove, almost nobody is willing to pay more for it.

Not true. I do not have the actual numbers, but Economy Plus Upsell, which UA offers its customers at check in, has generated millions in revenue. I know it was several hundred thousand the first few months it was introduced. The figures even bewildered the planners at UA HQ.
 
Boston92
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RE: Why Doesn't AA Have 'Economy Plus' On The 777s?

Sun Dec 10, 2006 8:00 am

Quoting Boston92 (Reply 7):
Once all the E- seats are full, they will put you in E-,

EDIT: Once all the E- seats are full, they will put you in E+. Sorry for the typo.
"Why does a slight tax increase cost you $200 and a substantial tax cut save you 30 cents?"
 
Continental123
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RE: Why Doesn't AA Have 'Economy Plus' On The 777s?

Sun Dec 10, 2006 8:15 am

Quoting Gh123 (Thread starter):
Why doesn't AA have an Economy Plus section on their 777s?

The same reason that CO & DL don't have it...because THEY DONT NEED IT!
 
commavia
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RE: Why Doesn't AA Have 'Economy Plus' On The 777s?

Sun Dec 10, 2006 8:32 am

Quoting FlyDreamliner (Reply 13):
MRTC was great, and I tried to fly AA just for that reason, and I've since stopped when it left... people will pay more for it, just not on every flight.

Here's the problem, though. You can't take rows off of the plane for certain flights and put them back for others. There may be more customers willing to pay more for an extra inch or two of legroom on the 5pm Friday night flight out of LaGuardia, or the 6am Monday morning departure from O'Hare.

But for the other days of the week and times of day when these passengers don't appear at the airport ready to pay more to get more, the airline must make a decision about they value more -- schedule, price, flexibility, frequent flyer program, etc. -- or legroom.

Quoting JC5280 (Reply 14):
Not true.

Sorry, but true.

Will some people pay more for extra legroom, more food, better entertainment, etc.? Sure, there are relatively small constituencies of passengers for whom all of these things constitute the most important product components.

However, for the vast majority of air travelers today, in 2006, price is by far the most important factor in choosing an air carrier, followed closely by schedule.

So while some passengers may be willing to pay more for E+ and/or MRTC, and while United may well upsell some of its E+ seats, there are not enough customers (AA customers, at least) choosing to willingly pay more for an extra two inches of legroom to justify outfitting the entire fleet with MRTC.
 
ctbarnes
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RE: Why Doesn't AA Have 'Economy Plus' On The 777s?

Mon Dec 11, 2006 2:18 am

Studies have shown People will pay more, but not massively more. SQ, for example, charges an average of 10% premium on the competition, and customers get excellent service and the airline makes money. CO charges about $10 more and they're doing well too.

IMHO, American lost its nerve. They priced their MRTC higher than the premium are willing to pay. They paniced and went back to following the rest of the lemmings in their race for the bottom in terms of customer service.

Charles, SJ
The customer isn't a moron, she is your wife -David Ogilvy
 
AJMIA
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RE: Why Doesn't AA Have 'Economy Plus' On The 777s?

Mon Dec 11, 2006 7:22 am

Quoting Commavia (Reply 3):
Legroom, much like food and inflight entertainment, is something that the vast majority of travelers complain about often and constantly ask to be improved, but when push comes to shove, almost nobody is willing to pay more for it.

Price, Price, Price. People are cheap.

I used to see it all the time when I was in reservations. Even if you have better schedules and service than your competitor people will walk away from you for $5.00. Online booking has just served to enhance this. Passengers are constantly buying tickets with multiple connections and change of airports to get the lowest fare... then they show up at the airport and ask to be placed on a nonstop flight.

AJMIA
Lady it's a jet... not a kite.
 
AA767400
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RE: Why Doesn't AA Have 'Economy Plus' On The 777s?

Mon Dec 11, 2006 7:27 am

Quoting Ctbarnes (Reply 18):
IMHO, American lost its nerve. They priced their MRTC higher than the premium are willing to pay. They paniced and went back to following the rest of the lemmings in their race for the bottom in terms of customer service.

That is a guess Charles.

American offered the same cheap fares that everyone else had, but when it came to the other being slightly cheaper they went for the other.
"The low fares airline."
 
ctbarnes
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RE: Why Doesn't AA Have 'Economy Plus' On The 777s?

Mon Dec 11, 2006 7:40 am

Quoting AA767400 (Reply 20):
That is a guess Charles.

American offered the same cheap fares that everyone else had, but when it came to the other being slightly cheaper they went for the other

It's a little more than a guess. It is a myth that customers will automatically go for the lowest fare in all cases. Brand loyalty in this industry is very strong what with frequent flyer programs and the like, as well as cities where there is only one dominent carrier. There is a certain segment of customers, infrequent travelers mostly, that are very price sensitive, but the vast majority are not. If they were, why haven't we seen any decrease in bookings as fares continue to rise? Indeed, planes are fuller than ever.

Charles, SJ
The customer isn't a moron, she is your wife -David Ogilvy
 
commavia
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RE: Why Doesn't AA Have 'Economy Plus' On The 777s?

Mon Dec 11, 2006 8:37 am

Quoting Ctbarnes (Reply 21):
It is a myth that customers will automatically go for the lowest fare in all cases.

First off, nobody said it was all customers, just most, and nobody said it was in "all classes," as Coash is really the only class in question here, and since obviously Coach passengers tend to be more price-sensitive than premium passengers.

Secondly, price is the single largest motivating factor for the majority of air travelers in the United States today. There is just no question about it, and I honestly don't understand how you could possibly dispute that.

Again -- nobody is saying that aren't still some hopelessly romantic (or ruthlessly discerning) souls out there who aren't interested in comfortable seats, good service, etc., but for the vast majority of air travelers today -- and it is, indeed, these not-so-silent masses in the consumerist drivers seat since 9/11 -- price is the most important factor.

As a very smart man, Bob Crandall, used to say often: "the three most important motivating factors for buying a ticket are price, price and price."

It's just reality, and there is just no way around it.

Quoting Ctbarnes (Reply 21):
There is a certain segment of customers, infrequent travelers mostly, that are very price sensitive, but the vast majority are not.

That makes perfect logical sense. Finally -- someone has explained to me why price-sensitive airlines like JetBlue, Southwest and Frontier have been doing horribly in the last five years and shrinking rapidly while American, Delta and United are soaring high!

Thanks for clearing that up!

[Sarcasm, of course.]
 
Boston92
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RE: Why Doesn't AA Have 'Economy Plus' On The 777s?

Mon Dec 11, 2006 8:50 am

Quoting Commavia (Reply 22):

The problem is that pax want to pay less and want a lot of the premium services. They do not understand that the airlines are not there to make the pax uncomfortable. The airlines are there to get people from point a to point b and make money while doing it.

Economy Plus as with UA is great. It has perks and is affordable. Other airlines like AA that have no economy plus, need SOMETHING in between a $200 coach seat and a $2000 first/business seat as I have said above.

What Pax need to do is open a frequent flier account, fly, and every couple of trips, they can upgrade to First. It really is not that hard to do.

Then comes the question if upgrade pax should be treated the same way as Paid First Class fares, and the answer is YES. First class is not IMHO for Premium passengers, but it is a Premium class, for the airlines loyal frequent travelers, and by upgrading, it shows that you are indeed, a loyal pax to that airline.
"Why does a slight tax increase cost you $200 and a substantial tax cut save you 30 cents?"
 
ctbarnes
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RE: Why Doesn't AA Have 'Economy Plus' On The 777s?

Mon Dec 11, 2006 9:32 am

Quoting Commavia (Reply 22):
Secondly, price is the single largest motivating factor for the majority of air travelers in the United States today. There is just no question about it, and I honestly don't understand how you could possibly dispute that.

Oh? Then why, pray tell, does CO charge a premium and have fewer losses when the rest of the industry is bathing in red ink?

Kindly kerb your sarcasm. It was of little surprise that your profile says you are 16-20.

Charles, SJ
The customer isn't a moron, she is your wife -David Ogilvy
 
jacobin777
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RE: Why Doesn't AA Have 'Economy Plus' On The 777s

Mon Dec 11, 2006 9:53 am

Quoting Ctbarnes (Reply 24):
Oh? Then why, pray tell, does CO charge a premium and have fewer losses when the rest of the industry is bathing in red ink?

..and AA isn't one of those in the red either...which goes to show there isn't an "clear cut" way to make profits.....

Quoting Ctbarnes (Reply 24):

Kindly kerb your sarcasm. It was of little surprise that your profile says you are 16-20.

It's "curb"..however, maybe you are using the British variant of the word.....and your comment about "being little surprised" of the someone being the age of 16-20 is in itself childish...Commavia is certainly one of the more intelligent posters on A.net..let alone posters in the 16-20 age range...not to mention,

Cheers...
"Up the Irons!"
 
Bicoastal
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RE: Why Doesn't AA Have 'Economy Plus' On The 777s?

Mon Dec 11, 2006 10:09 am

Quoting Gh123 (Thread starter):
Why doesn't AA have an Economy Plus section on their 777s?

Because Economy Plus is a United product. Fly United, it's better anyway.
Airliners.net has many forums. It has spell check and search functions. Use them before posting!
 
AJMIA
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RE: Why Doesn't AA Have 'Economy Plus' On The 777s?

Mon Dec 11, 2006 10:23 am

Quoting Ctbarnes (Reply 21):
It is a myth that customers will automatically go for the lowest fare in all cases. Brand loyalty in this industry is very strong what with frequent flyer programs and the like, as well as cities where there is only one dominent carrier. There is a certain segment of customers, infrequent travelers mostly, that are very price sensitive, but the vast majority are not.

Brand loyalty is very strong for frequent flyer members when they reach the top tiers. It is also very strong for those frequent flyer members who pay for their tickets with OPM (other people's money).

In my 16 years in the industry I would have to say the number one motivator is for the average passenger is PRICE. Brand loyalty and mileage programs only pull passengers your way if your price is the lowest. If this was not the case there would not be such a frenzy among the airlines to match each others fares.

Number two is SCHEDULE (nonstop service and convenient flight times at the right PRICE).

Number three is NEGATIVE ASSOCIATIONS (you really don't want to fly with someone who pissed you off before... unless they are the only one with the best PRICE available).

And number four is POSITIVE ASSOCATIONs (if your past trips were good and the PRICE is right).

Quoting Ctbarnes (Reply 21):
why haven't we seen any decrease in bookings as fares continue to rise? Indeed, planes are fuller than ever.

People need to travel. Considering speed, ease and cost, air travel is still a very good bargain.

I am paying twice what I used to pay to fill up my Honda, but I am still driving about the same because I need to get to work and I want to get out durring my time off and spend time with my friends. Gas may get so expensive that I will curtail my driving but it has not reached that price yet. The same holds true for airfares.

Quoting Ctbarnes (Reply 18):
IMHO, American lost its nerve. They priced their MRTC higher than the premium are willing to pay. They paniced and went back to following the rest of the lemmings in their race for the bottom in terms of customer service.

IIRC MRTC was about $5.00 more per segment then the competition.

AA did loose their nerve when they realized that even after trying it, people were not willing to pay for it. Sort by price always wins on the web.

Quoting Commavia (Reply 22):

Secondly, price is the single largest motivating factor for the majority of air travelers in the United States today. There is just no question about it, and I honestly don't understand how you could possibly dispute that.

Quoting Ctbarnes,(Reply 24):
Kindly kerb your sarcasm. It was of little surprise that your profile says you are 16-20.

He did not agree with you, but I did not find anything he sad sarcastic.

Don't inslut someone's age. Challenge their opinion if you do not agree with them.

AJMIA
Lady it's a jet... not a kite.
 
halls120
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RE: Why Doesn't AA Have 'Economy Plus' On The 777s?

Mon Dec 11, 2006 10:35 am

Quoting AJMIA (Reply 27):
IIRC MRTC was about $5.00 more per segment then the competition.

AA did loose their nerve when they realized that even after trying it, people were not willing to pay for it. Sort by price always wins on the web.

AA's problem is that they made the entire Y section "economy plus." What they should have done is followed UA's lead and limited MRTC to MRPC - more room in part of coach. That way they could charge more for the seats that some of their customers - like me - are willing to pay for, and kept the knees in the chest lack of room in the rear.

Especially on their international product. While I'll consider AA for short flights (under 3 hours), no way I'm flying to Europe on AA coach. Not when UA's E+ is available and more comfortable.
"Suppose you were an idiot. And suppose you were a member of Congress. But I repeat myself." Mark Twain, a Biography
 
AJMIA
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RE: Why Doesn't AA Have 'Economy Plus' On The 777s?

Mon Dec 11, 2006 10:59 am

Quoting Halls120 (Reply 28):
AA's problem is that they made the entire Y section "economy plus." What they should have done is followed UA's lead and limited MRTC to MRPC - more room in part of coach. That way they could charge more for the seats that some of their customers - like me - are willing to pay for, and kept the knees in the chest lack of room in the rear.

In hindsight you may be right...

I think the reason AA came out with MRTC instead of their own version of E+ was for simplification and trump UA by offering the product in the ENTIRE cabin.

AJMIA
Lady it's a jet... not a kite.
 
jetdeltamsy
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RE: Why Doesn't AA Have 'Economy Plus' On The 777s?

Mon Dec 11, 2006 11:02 am

Quoting Gh123 (Thread starter):
Why doesn't AA have an Economy Plus section on their 777s

Because AA doesn't offer Economy Plus.

Obviously they do not feel it would be beneficial for them or they would offer it.

Anything that generates the most $$$$ is the way they are going to go. Clearly they believe more seats equals more $$ than more legroom offered at a premium price.
Tired of airline bankruptcies....EA/PA/TW and finally DL.
 
willyj
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RE: Why Doesn't AA Have 'Economy Plus' On The 777s?

Mon Dec 11, 2006 11:08 am

I think that AA would do well putting their domestic first class seats in a 2x2x2 config on their 763's and in 2x4x2 on their 772's with a 38-40" pitch. Both planes have that forward mini cabin of economy where it would fit perfectly. Apparently BA and VS's premium economy products do very well. A lot of people would be willing to pay a few hundred dollars more on longer flights for a little more space and comfort - not just increased pitch.
 
Werkur767
Posts: 100
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RE: Why Doesn't AA Have 'Economy Plus' On The 777s?

Mon Dec 11, 2006 11:35 am

I flown with AA twice and their economy class has a good legroom, this measure is for save money for sure, and a plus satisfaction for passengers.

I think the future is to abandone first class, then improve the economy class and get a busoness premium like a forst class. These improvements are good for airlines around the world, and here in Brazil is the same, TAM for exemple, and allow an economy with good legroom.

For me...legroom is an way to get more passengers satisfaction that in the future will remember and will choose the same airline again.

Gol Linhas Aereas, the first Brazilian low-cost, low-fare, had a bad legroom, and i'm a tall guy, legroom is almost the best point to choose an airline to fly.

For sure the legroom of AA and their economy improvements are one of the best.

AA flies to GRU, from DFW, JFK and MIA, with 777-200ERs and 767-300ERs with more than eight hours of flight and their legroom allowing the passengers to arrive here with no tired.

Regards. Big grin  Wink
Werkurspotter
 
777STL
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RE: Why Doesn't AA Have 'Economy Plus' On The 777s?

Mon Dec 11, 2006 12:06 pm

Quoting Ctbarnes (Reply 24):
Oh? Then why, pray tell, does CO charge a premium and have fewer losses when the rest of the industry is bathing in red ink?

He's right. Infrequent flyers make up the bulk of the passengers traveling today, especially with the advent of airlines such as WN and B9 that have effectively opened up air travel to the masses. Infrequent flyers most certainly are the most responsive to price differences, they have no brand loyalty. Short of being in a market that's only served by one airline or some other extenuating circumstance, they WILL go with whatever fare is the cheapest.

Quoting Ctbarnes (Reply 24):
Kindly kerb your sarcasm. It was of little surprise that your profile says you are 16-20.

With all due respect, that 16-20yo seems to be a bit more intuitive than yourself. Kindly curb your condescension.
PHX based
 
commavia
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RE: Why Doesn't AA Have 'Economy Plus' On The 777s

Mon Dec 11, 2006 12:24 pm

Quoting Ctbarnes (Reply 24):
Then why, pray tell, does CO charge a premium and have fewer losses when the rest of the industry is bathing in red ink?

Continental is able to charge a premium for several reasons:

1) They have excellent hubs, particularly Houston and Newark, that serve economically viable and rapidly-growing regions where business traffic is strong and direct low-cost competition is relatively minimal

2) They fly to the places customers want to travel but most other competitors don't fly, like smaller European cities, India nonstop, China nonstop from Newark, etc. and thus are able to command a unit revenue premium versus the industry

3) They offer amenities and products that their core customers value, like full meal service at meal times, etc., etc., and offer an excellent and highly competitive international premium product (BusinessFirst)

4) Most importantly, they are just a damn-well-run airline that is being managed by some of the smartest people in the industry who know where to put airplanes in order to make money, as simple as that

And, as others have said, American -- despite no longer having industry-leading legroom (Continental doesn't either, I might add) -- is not "bathing in red ink" and is almost certainly going to announce next month that it has produced an annual profit for FY 2006, the company's first annual profit since the September 11, 2001 terrorist attacks.
 
ikramerica
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RE: Why Doesn't AA Have 'Economy Plus' On The 777s?

Mon Dec 11, 2006 12:50 pm

Quoting Commavia (Reply 34):
Continental is able to charge a premium for several reasons:

And they'd rather fly a smaller plane completely full of higher fares and leave people behind than a larger plane and have to give away seats.

Others fly 767s domestically, CO rarely does (except IAH-EWR positioning). Domestically, CO is flying a fleet very similar to WN, tons of 737s, with a few 757s thrown in for capacity. And we know now that's been working out for WN...  Wink
Of all the things to worry about... the Wookie has no pants.
 
cairo
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RE: Why Doesn't AA Have 'Economy Plus' On The 777s?

Mon Dec 11, 2006 1:57 pm

Quoting Commavia (Reply 22):
First off, nobody said it was all customers,

No, somone said almost all customers:

Quoting Commavia (Reply 3):
almost nobody is willing to pay more for it



Quoting Commavia (Reply 22):
me why price-sensitive airlines like JetBlue

It isn't their low prices on these airlines that makes them grow, it is their low internal costs.

Quoting Ctbarnes (Reply 24):
It was of little surprise that your profile says you are 16-20.

I hope when I am a teenager I can work or an airline and know so much about it.

Quoting Ctbarnes (Reply 24):
Oh? Then why, pray tell, does CO charge a premium and have fewer losses when the rest of the industry is bathing in red ink?

Your implication is correct; CO charges a premium because some substantial portion of the flying public is willing to pay for extra ammenities, including extra legroom.

The other reasons mentioned in reply 34 are nice for a school essay called What Is Good about Continental, but have nothing to do with explaining the premium.

Quoting AJMIA (Reply 27):
Don't inslut someone's age.

Mentioning age is just a shortcut way of saying, "this person has no experience in anything." It is a valid point. It isn't his age he's insulting, it is lack of knowledge in the real non-classroom world.

Quoting Halls120 (Reply 28):
What they should have done is followed UA's lead and limited MRTC to MRPC

That is in fact closer to the right idea, based on PAX buying behavior and inflight surveys. It isn't that MRTC was completely the wrong idea, it is that it was implemented incorrectly. (I helped on the MRTC program and learned plenty.)

There are LOTS of customers that are willing to pay more for MRTC, in fact MOST of AA's customers are willing to pay more for the ammenity THEY value most.

As some have mentioned, on a :45 flight DFW-AUS practically no one cares about any ammenity. Others have noted SQ is always noticeably more expensive than the competion, while CO very often is at least slightly higher.

Different times of day, different routes, different days of the week and the mix changes - sometimes more than 70% of Y pax wanted to pay more for extra legroom; and many times they wanted to buy a full blown upgrade to F, but couldn't because F was sold out.

Anyone that says thngs like "customers won't pay for xxx" amenity is just caught in the youthful habit of thinking in black and white, clear-cut answers. On about 30% of AA routes, MRTC was a success, on another third it achieved nothing, and on the remainder of flights it lost money.

>BUT<, and this is very important, MRTC came at a bad time and was, like Halls120 implies, over-implemented. In the immediate post 9/11 environment, MRTC could never work; today we know that many customers, on many flights more than half, are willing to pay a premium for extra seat pitch, the big problem is how to implement a flexibile way to offer this where it is viable.

To answer the orginal thread starter: AA in fact SHOULD have an E+ coach section - but only part of the time, on certain flights, on Mondays and Fridays only, etc... It is incredibly difficult to microtune how such a product should be delivered. Look at UA's own multiple experiments with an airline-within-an-airline for other examples of how difficult it is for a legacy to fine tune price and service offerings.

Cairo
 
Boston92
Posts: 2553
Joined: Wed Aug 09, 2006 6:56 am

RE: Why Doesn't AA Have 'Economy Plus' On The 777s?

Mon Dec 11, 2006 2:06 pm

Quoting Cairo (Reply 36):
I hope when I am a teenager

Your profile says you are in your thirties, are you gonna be a teen again?
"Why does a slight tax increase cost you $200 and a substantial tax cut save you 30 cents?"
 
cairo
Posts: 889
Joined: Mon Jun 06, 2005 2:41 pm

RE: Why Doesn't AA Have 'Economy Plus' On The 777s?

Mon Dec 11, 2006 2:12 pm

Quoting Boston92 (Reply 37):
Your profile says you are in your thirties, are you gonna be a teen again?

You're right, thanks for pointing that out. I was just carelessly hoping I could once again achieve the apex of knowledge school children have...and more importantly, share my knowledge with real adults.

Cairo
 
ctbarnes
Posts: 3269
Joined: Thu Mar 30, 2000 2:20 pm

RE: Why Doesn't AA Have 'Economy Plus' On The 777s?

Mon Dec 11, 2006 2:34 pm

Quoting AJMIA (Reply 27):
He did not agree with you, but I did not find anything he sad sarcastic.

Don't inslut someone's age. Challenge their opinion if you do not agree with them.

I did. He responded and said himself it was a sarcastic comment. It was inappropriate and immature and I called him on it.

Quoting Commavia (Reply 34):
is not "bathing in red ink" and is almost certainly going to announce next month that it has produced an annual profit for FY 2006, the company's first annual profit since the September 11, 2001 terrorist attacks.

One profitable year is one thing. Consistent profits are another. That is the crux of the problem. The industry cannot make consistent profits because they are not customer focused. They pay a lot of lip service about it, but in the end they are unable to deliver because they keep insisting that customers have to do business their way. IMHO there need to be more people like Gordon Bethune, Herb Kelleher and Dave Needleman who are willing to challenge the incestuous, insular thinking that seems to pervade this industry where everyone seems to parrot the same mantra that all people want are low fares. That is not true.

People want a good service experience at a reasonable cost that represents good value for money. As I've said over and over: Southwest, Jet Blue and the like are successful less for low fares and more because they provide a quality service experience that is consistent and customer focused.

Charles, SJ

[Edited 2006-12-11 06:36:41]
The customer isn't a moron, she is your wife -David Ogilvy
 
Werkur767
Posts: 100
Joined: Sat Nov 25, 2006 1:26 am

RE: Why Doesn't AA Have 'Economy Plus' On The 777s?

Mon Dec 11, 2006 2:38 pm

Quoting Ctbarnes (Reply 39):
People want a good service experience at a reasonable cost that represents good value for money. As I've said over and over: Southwest, Jet Blue and the like are successful less for low fares and more because they provide a quality service experience that is consistent and customer focused.

Only in United States...GOL in Brazil doen't offer a good service like JETBLUE for exemple!!!  Wink  Wink  Big grin  Embarrassment
Werkurspotter
 
777STL
Posts: 2770
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RE: Why Doesn't AA Have 'Economy Plus' On The 777s?

Mon Dec 11, 2006 2:50 pm

Quoting Cairo (Reply 36):
Mentioning age is just a shortcut way of saying, "this person has no experience in anything." It is a valid point. It isn't his age he's insulting, it is lack of knowledge in the real non-classroom world.

But on the same token, you're saying that as if an older person is by definition wiser than someone who's younger. That's nonsense. There are plenty of people around here in the 30-50 yo age bracket who don't have a clue as to what they're talking about.

Personally, I think it's pure bullshit to discount someone's point of view merely because they fall into a certain age bracket. If he hadn't indicated his age, somehow I don't think we'd even be having this conversation.
PHX based
 
cairo
Posts: 889
Joined: Mon Jun 06, 2005 2:41 pm

RE: Why Doesn't AA Have 'Economy Plus' On The 777s?

Mon Dec 11, 2006 2:55 pm

Quoting Ctbarnes (Reply 39):
more people like Gordon Bethune, Herb Kelleher and Dave Needleman who are willing to challenge the incestuous, insular thinking

Have you noticed that Delta's management answers all their problems with, "Let's add even more flights to Atlanta." ???

Note to Delta management: people don't like to change planes. 2nd note: you can try, every once in a while, providing customers what they want: a nonstop flight to their destination.

Quoting Ctbarnes (Reply 39):
People want a good service experience at a reasonable cost that represents good value for money.

If you look at airlines like AA and UA and DL, they are employing a LOT OF PEOPLE who don't contribute efficiently towards this goal. The employee count at UA pre-bankruptcy was about 50% higher than at WN on a per passenger mile basis - but did they provide 50% better service for all these extra employees?

Cairo
 
commavia
Posts: 9651
Joined: Mon Apr 25, 2005 2:30 am

RE: Why Doesn't AA Have 'Economy Plus' On The 777s?

Mon Dec 11, 2006 3:27 pm

Quoting Cairo (Reply 36):
No, somone said almost all customers:

The world "almost" being operative.

Quoting Cairo (Reply 36):
"this person has no experience in anything." It is a valid point. It isn't his age he's insulting, it is lack of knowledge in the real non-classroom world.

Word to the wise: don't make assumptions or draw conclusions about people you've never met and have never seen or heard from outside of an internet forum.

Quoting Ctbarnes (Reply 39):
One profitable year is one thing. Consistent profits are another.

Nobody said American's problems, or any other airline's, were over, but it is illustrative that obviously American is doing something right if they can survive a direct terrorist attack resulting in the loss of the two of their aircraft, dozens of its passengers and employees, a crash less three months later, plus all the turmoil this industry has suffered in the last five years.

Quoting Ctbarnes (Reply 39):
That is the crux of the problem. The industry cannot make consistent profits because they are not customer focused. They pay a lot of lip service about it, but in the end they are unable to deliver because they keep insisting that customers have to do business their way.

In principle, I agree with you, as hard as that may be for you to believe. Obviously, yes -- nobody is saying the airlines should just throw there hands up and say, "well, you damn travelers can't make up your minds so we'll just go to the lowest common service denominator." And, further, I agree with you that this is exactly what some airlines have done -- gone to the lowest common service denominator because, for lack of a better reason, they just couldn't figure out what the hell customers wanted.

However, that is only one angle of what the airlines face today in the hypercompetitive U.S. airline industry. Giving customers top-notch service is all fine and good when you: 1) have tons and tons of cash to burn and support higher service levels (a la Singapore/Emirates) or 2) you have a monopoly or pseudo-monopoly (a la QANTAS).

Neither of these things occurs for any airline in the United States, especially the legacy carriers who are so financially weakened and have been on life support for so long that all of their decisions must now be weighed not just on what customers want, optimally, but much more importantly (and much more difficult to discern), what customers value -- a.k.a., what they are willing to pay for.

The airline industry has to reach a balance between economic profit motive and customer service. I'll reiterate my basic premise from the beginning of this discussion, which I still believe and have not waivered from: every passengers wants the best of everything when they travel -- the legroom, the food, the entertainment, the service. But are they willing to pay for it? The answer is a resounding no. Some are, but most aren't, which is why the power shift in the airline industry in the last 10-15 years, but especially in the last five, has been away from the traditionally (and I emphasize "traditionally," not currently) full-service carriers and towards the lower-fare airlines that have been able to build creative service products (simplicity on Southwest, IFE on Frontier, leather seats/blue chips/IFE on JetBlue, etc.) because of their relatively stronger financial positions.

I believe that ultimately the surviving legacy carriers will also find this equilibrium and develop their own innovative and customer-focused products that give customers what they value most (price above all else, followed by schedule, then other factors like service, food, entertainment, etc.) at a fare they are willing to accept.

Quoting Ctbarnes (Reply 39):
IMHO there need to be more people like Gordon Bethune, Herb Kelleher and Dave Needleman who are willing to challenge the incestuous, insular thinking that seems to pervade this industry where everyone seems to parrot the same mantra that all people want are low fares. That is not true.

Again, nobody said that "all people want are low fares." Just the vast majority do.

To illustrate -- perhaps a quick thought experiment: if customers' most important factor in deciding air travel were service, and airlines like Continental that still offered food, etc., or American, that used to provide more legroom, still offered those clearly superior product attributes, wouldn't those airlines see a considerable market share shift as a result? Theoretically, they would, but of course that hasn't happened, and the reason is that for most people -- again, most, not all -- price trumps all of those other excellent experiential features. Passengers love them and are thrilled to enjoy them, but for most, it's not worth paying for them.

Asked by a member of the National Press Club in 1997 about why American Airlines hasn't removed rows of seats from its airplanes in order to give customers more legroom and improve the customer experience (this, of course, long predated MRTC), then-AMR CEO Bob Crandall responded thus (paraphrasing):

"If you're a businessman flying home [to New York] after a day of work in [Chicago] and you wrap up your meeting early and get out to O'Hare at 3:30 even though you're not schedule to fly out until 6, what will you do? There's a flight at 5 on American -- with the extra legroom -- and a flight 4 on "Scrunched Up Air" (Crandall's exact words). If you want that extra legroom, you must wait an hour! But you won't. You'll get on Scrunched Up Air because you want to go home."

As he said: "As long as that's the way the public behaves, they won't get more legroom."

While this may not be reflective of every traveler, on every flight, on every route, I think it is instructive as to the behavior of just about every traveler -- business and leisure -- that I know, including myself.
 
ckfred
Posts: 4694
Joined: Wed Apr 25, 2001 12:50 pm

RE: Why Doesn't AA Have 'Economy Plus' On The 777s?

Tue Dec 12, 2006 1:58 am

Quoting Commavia (Reply 12):
Therein lies the problem, though.

AA thought that with MRTC, it could generate a revenue premium over other airlines. That didn't happen. People cheered and applauded that AA was giving them more room, and then they went right back to booking the cheapest ticket regardless of whether it had more room or not.

As long as that is how the public behaves, less-than-MRTC is what they'll get.

The problem is both with airline marketing and passengers. The hotel chains are in an all-out war to see who has the most comfortable mattresses and bedding, as well as the best amenities, like coffeemakers with premium coffee blends, plasma TVs, and alarm clocks that play CDs and MP3s.

Guess what? The hotels are raising rates to pay for the upgrades, and guests are willingly paying for them.

My wife is finding that Hampton Inns often have suites with whirlpools that are priced within the daily limits that her employer has for lodging, so she's booking suites. It gives her more room to do work, including work for Master's program.

So, it seems that airlines that want to upgrade their cabins, in-flight service, etc., need to explain that the better service costs more. If AA had explained that its fares cost more than WN, because it had more legroom and no-cattle-call boarding, MRTC might still be around.
 
mk777
Posts: 888
Joined: Wed Oct 25, 2006 1:48 am

RE: Why Doesn't AA Have 'Economy Plus' On The 777s?

Tue Dec 12, 2006 2:01 am

Its because they can still fill their Y seats without the E+, look at ORD-DEL, its usually full all the year round.
come fly with me
 
ctbarnes
Posts: 3269
Joined: Thu Mar 30, 2000 2:20 pm

RE: Why Doesn't AA Have 'Economy Plus' On The 777s?

Tue Dec 12, 2006 3:09 am

Quoting Ckfred (Reply 44):
So, it seems that airlines that want to upgrade their cabins, in-flight service, etc., need to explain that the better service costs more. If AA had explained that its fares cost more than WN, because it had more legroom and no-cattle-call boarding, MRTC might still be around.

Thanks Fred. You said it better than I could.

The recent fare increases are long overdue and necessary. Again, there is a significant segment of the population that are willing to pay a bit more ($15-20) for better service, a non-stop flight and so forth. Selling upgrades to UA's Economy plus bears that out. If people perceive they are getting good value for money they will happily shell out. The fact that fare increases have been made to stick also points to the fact that the industry is not as price senstivie as many are led to believe. Fares are higher than a year ago, planes are full and the airlines are enjoying good yields-the best in a long time. Pricing your product below what it costs to produce never makes good business sense-and yet the airlines seem routinely to ignore this basic economic reality.

In the 1980's Eagon Ronay said, "If airlines were hotels most would be out of business." Sad but true.

Charles, SJ
The customer isn't a moron, she is your wife -David Ogilvy
 
willyj
Posts: 410
Joined: Mon Oct 03, 2005 3:04 am

RE: Why Doesn't AA Have 'Economy Plus' On The 777s?

Wed Dec 13, 2006 2:33 pm

Quoting Mk777 (Reply 45):
Its because they can still fill their Y seats without the E+, look at ORD-DEL, its usually full all the year round.

Great that they are filling the flights - but the argument is that a premium economy class might actually raise yields. I think there's a good chance this is going to be an industry trend. If you look back to the late 80's/early 90's, most int'l First class seats had about a 60" pitch (what most carriers offer today in business), and most carriers had business class seats with about a 40" pitch (most economy plus seats are at a 37-40" pitch). While airlines are making their business classes so spacious and roomy, they are also raising their prices to absurd levels for the average public/business traveler who can afford more than economy, but not $7,000 for a transatlantic roundtrip to london.
 
jacobin777
Posts: 12262
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RE: Why Doesn't AA Have 'Economy Plus' On The 777s?

Wed Dec 13, 2006 2:41 pm

I think AA could do well with 2 rows of E+..that's only 18 more seats and they can standardise it on all of their 777's...I think those seats would get filled rather quickly...I know I would purchase it....
"Up the Irons!"
 
Boston92
Posts: 2553
Joined: Wed Aug 09, 2006 6:56 am

RE: Why Doesn't AA Have 'Economy Plus' On The 777s?

Thu Dec 14, 2006 12:13 am

Quoting Jacobin777 (Reply 48):
I think AA could do well with 2 rows of E+..that's only 18 more seats

How would that be MORE seats?
"Why does a slight tax increase cost you $200 and a substantial tax cut save you 30 cents?"

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