dcajet
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AA to unbundle some fares on some transatlantic routes

Wed Aug 30, 2017 1:00 am

Due to the "material" effect of LCCs Norwegian and WOW over the North Atlantic, American will respond with an unbundled basic economy product on some North Atlantic routes, as per an interview with American SVP-revenue management Don Casey published today by Aviation Daily and featured on ATW.

http://atwonline.com/airports-routes/am ... tic-routes (behind a pay wall)
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atl100million
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Re: AA to unbundle some fares on some transatlantic routes

Wed Aug 30, 2017 2:29 am

here is an article that is not behind a pay wall

https://www.bizjournals.com/dallas/news ... fares.html
 
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flyingclrs727
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Re: AA to unbundle some fares on some transatlantic routes

Wed Aug 30, 2017 2:34 am

Flying transatlantic, the last thing I want to do is have to worry about all the incidental sevices and coats. Having to plan to bring my own food is a hassle, especially if there are connections needed prior to boarding the transoceanic flight.
 
wn676
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Re: AA to unbundle some fares on some transatlantic routes

Wed Aug 30, 2017 3:46 am

flyingclrs727 wrote:
Flying transatlantic, the last thing I want to do is have to worry about all the incidental sevices and coats. Having to plan to bring my own food is a hassle, especially if there are connections needed prior to boarding the transoceanic flight.


Well, luckily they'll still offer the option of not worrying about all the incidentals.
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Mir
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Re: AA to unbundle some fares on some transatlantic routes

Wed Aug 30, 2017 4:33 am

wn676 wrote:
Well, luckily they'll still offer the option of not worrying about all the incidentals.


By paying more, of course.
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flyingclrs727
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Re: AA to unbundle some fares on some transatlantic routes

Wed Aug 30, 2017 5:21 am

wn676 wrote:
flyingclrs727 wrote:
Flying transatlantic, the last thing I want to do is have to worry about all the incidental sevices and coats. Having to plan to bring my own food is a hassle, especially if there are connections needed prior to boarding the transoceanic flight.


Well, luckily they'll still offer the option of not worrying about all the incidentals.


Turkish Airlines serves excellent food even in economy, has a 2 bag limit, and still has excellent prices and comfort to Europe.
 
bgm
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Re: AA to unbundle some fares on some transatlantic routes

Wed Aug 30, 2017 6:16 am

flyingclrs727 wrote:
wn676 wrote:
flyingclrs727 wrote:
Flying transatlantic, the last thing I want to do is have to worry about all the incidental sevices and coats. Having to plan to bring my own food is a hassle, especially if there are connections needed prior to boarding the transoceanic flight.


Well, luckily they'll still offer the option of not worrying about all the incidentals.


Turkish Airlines serves excellent food even in economy, has a 2 bag limit, and still has excellent prices and comfort to Europe.


Flying to Europe, especially Western Europe from the US via IST is quite a detour. Not to mention the instability in Turkey right now would deter a lot of people from using that option.
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flyingclrs727
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Re: AA to unbundle some fares on some transatlantic routes

Wed Aug 30, 2017 6:41 am

bgm wrote:
flyingclrs727 wrote:
wn676 wrote:

Well, luckily they'll still offer the option of not worrying about all the incidentals.


Turkish Airlines serves excellent food even in economy, has a 2 bag limit, and still has excellent prices and comfort to Europe.


Flying to Europe, especially Western Europe from the US via IST is quite a detour. Not to mention the instability in Turkey right now would deter a lot of people from using that option.


My wife is from Eastern Europe, and Turkish Airlines has by far the most convenient schedulles between her home city and Houston or any othef6 US city they serve. They also have much better prices than any combination of their Star Alliance partners in addition to having a much better schedule both ways.
 
wn676
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Re: AA to unbundle some fares on some transatlantic routes

Wed Aug 30, 2017 10:55 am

Mir wrote:
wn676 wrote:
Well, luckily they'll still offer the option of not worrying about all the incidentals.


By paying more, of course.


Kind of goes without saying, doesn't it? I'm all for getting a deal, but if I'm really not up for dealing with the Basic Econ experience, there are other fare classes available. Pay more up front and worry less about incidentals.
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wn676
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Re: AA to unbundle some fares on some transatlantic routes

Wed Aug 30, 2017 11:01 am

flyingclrs727 wrote:
wn676 wrote:
flyingclrs727 wrote:
Flying transatlantic, the last thing I want to do is have to worry about all the incidental sevices and coats. Having to plan to bring my own food is a hassle, especially if there are connections needed prior to boarding the transoceanic flight.


Well, luckily they'll still offer the option of not worrying about all the incidentals.


Turkish Airlines serves excellent food even in economy, has a 2 bag limit, and still has excellent prices and comfort to Europe.


Then by all means, fly TK! That's how it's supposed to work. They can offer that level of service at that price; great! That's how they feed their hub and that's what fits their model. I don't mean that in a snarky way, it just is what it is.
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Newbiepilot
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Re: AA to unbundle some fares on some transatlantic routes

Wed Aug 30, 2017 11:03 am

What I find really annoying with these basic economy fares is that corporate travel will book into these fares. Then business travelers have to expense fees, which may not be permitted. Some corporate policies prohibit paying for premium seats, which means business travelers can be stuck in bad seats. European airlines like BA, LH etc charge for seats but US carriers fortunately have not.

Worse than that, stripping elite qualifying miles takes away the benefit of being loyal to one airline. Without elite status, it is back to whatever fare is cheapest. Not a good thing for business travelers, but airlines don't seem to care as much as they use to for frequent flyer program loyalty.

Oh well, off the soap box
 
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Web500sjc
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Re: AA to unbundle some fares on some transatlantic routes

Wed Aug 30, 2017 11:04 am

dcajet wrote:
Due to the "material" effect of LCCs Norwegian and WOW over the North Atlantic, American will respond with an unbundled basic economy product on some North Atlantic routes, as per an interview with American SVP-revenue management Don Casey published today by Aviation Daily and featured on ATW.

http://atwonline.com/airports-routes/am ... tic-routes (behind a pay wall)



So this is basically admitting that AA is the first airline to see the effect of Longhaul LCCs, and that Longhaul LCCs are not really stimulating new demand/capacity, but skiming off existing traffic at lower prices.
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wn676
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Re: AA to unbundle some fares on some transatlantic routes

Wed Aug 30, 2017 11:21 am

Newbiepilot wrote:
What I find really annoying with these basic economy fares is that corporate travel will book into these fares. Then business travelers have to expense fees, which may not be permitted. Some corporate policies prohibit paying for premium seats, which means business travelers can be stuck in bad seats. European airlines like BA, LH etc charge for seats but US carriers fortunately have not.

Worse than that, stripping elite qualifying miles takes away the benefit of being loyal to one airline. Without elite status, it is back to whatever fare is cheapest. Not a good thing for business travelers, but airlines don't seem to care as much as they use to for frequent flyer program loyalty.

Oh well, off the soap box


Fair point. If you're being forced in a sense into one of these fares, that really sucks, and I could understand the pushback against unbundling. With AA you'd have to fly twice as much to earn the same benefits if you're booking everything in Basic Econ. Are these fares usually still available within the window that most business travelers are booking?
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MIflyer12
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Re: AA to unbundle some fares on some transatlantic routes

Wed Aug 30, 2017 11:44 am

Newbiepilot wrote:
What I find really annoying with these basic economy fares is that corporate travel will book into these fares.


Decent corporate travel systems can block these fares -- just as they block F, or J for travel less than xx hours airport to airport.
 
Newbiepilot
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Re: AA to unbundle some fares on some transatlantic routes

Wed Aug 30, 2017 12:05 pm

MIflyer12 wrote:
Newbiepilot wrote:
What I find really annoying with these basic economy fares is that corporate travel will book into these fares.


Decent corporate travel systems can block these fares -- just as they block F, or J for travel less than xx hours airport to airport.


The bean counters in charge of corporate travel decisions love them especially since corporate travel companies like Concur let the companies define the rules. They don't care if an employee has to sit in a middle seat in the last row, get little to no frequent flyer benefits, and still has to arrive prepared for a meeting. They saved the company $40. Concur and similar corporate travel websites let people choose day, time and select airlines within a specified price range. People who would have selected AA might chose DL or UA so that they can earn full frequent flyer miles, get seat assignments, etc. I don't know many people who book Norwegian, WOW, etc for business travel.
 
Eirules
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Re: AA to unbundle some fares on some transatlantic routes

Wed Aug 30, 2017 12:19 pm

Aer Lingus this week announced something similar in response to WOW & Norwegian from Dublin. Basic transatlantic fares where you'll have to pay for headphones, blankets, checked bags etc.

There is no doubt that people are being attracted by low cost transatlantic carriers. Headline fares of under €250 return grab the attention. The fact they're to smaller airports further away and that they're not comparing the same product offering as the legacy carriers is either being ignored by people or they're blind to it. Both WOW & Norweigan have already confirmed increased transatlantic schedules from Dublin for S18, BA are changing 777 densities from LGW in a direct response and we've already seen AA & UA drop regional U.K. routes to USA. American probably see they've no option. But I do agree, I hope it's not another attempt to just raise fares
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commavia
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Re: AA to unbundle some fares on some transatlantic routes

Wed Aug 30, 2017 12:32 pm

Mir wrote:
By paying more, of course.


Yep. That's how the economics work. The industry structure is finally evolving such that service, in addition to price, are stratifying to cater to various different customer segments - but what that inevitably means is that the cross-subsidization from one customer segment to another is coming to an end. Those who demand less will get to pay less, which means that those who demand more will have to start paying more.

Web500sjc wrote:
So this is basically admitting that AA is the first airline to see the effect of Longhaul LCCs, and that Longhaul LCCs are not really stimulating new demand/capacity, but skiming off existing traffic at lower prices.


No. AA may be the first airline to explicitly articulate some of these comments in precisely this way, but all the major U.S. and European carriers have spoken on recent earnings calls about the level of competitive capacity, and resulting yield compression, across the Atlantic. This is hardly news. And frankly, I doubt anyone is really surprised that AA - or Delta, United, etc. for that matter - are going to be rolling out some type of "basic economy" fare product across the Atlantic - I think just about everyone viewed that as just a matter of time.

Newbiepilot wrote:
The bean counters in charge of corporate travel decisions love them especially since corporate travel companies like Concur let the companies define the rules. They don't care if an employee has to sit in a middle seat in the last row, get little to no frequent flyer benefits, and still has to arrive prepared for a meeting. They saved the company $40. Concur and similar corporate travel websites let people choose day, time and select airlines within a specified price range. People who would have selected AA might chose DL or UA so that they can earn full frequent flyer miles, get seat assignments, etc. I don't know many people who book Norwegian, WOW, etc for business travel.


Well that's between the "bean counters" in corporate travel departments and the people in those corporations' HR departments who have trouble attracting or retaining people who refuse to be uncomfortable on business travel. This is no different than corporations steadily forcing employees to downgrade from First to Business, and then in many cases to Premium Economy as its become more available, and Coach in some cases, etc. If employees are that unhappy about companies forcing them to book basic economy fares on long flights, they should tell their employer about it. And in the meantime, AA will adjust its capacity and revenue management accordingly based on however corporate travelers behave. Although, needless to say, this AA executive's quoted comments and intuitive common sense would imply that these fare buckets are going to be managed in such a way that corporate/business travelers aren't really the ones primarily targeted, anyway.
 
Newbiepilot
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Re: AA to unbundle some fares on some transatlantic routes

Wed Aug 30, 2017 12:40 pm

AA is not just competing with low cost carriers. Airlines like Lufthansa already stripped away frequent flyer benefits and seat assignments. The days of loyalty to alliances are going to continue fading away as there is less and less benefit to sticking to a preferred airline and alliance.
 
cledaybuck
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Re: AA to unbundle some fares on some transatlantic routes

Wed Aug 30, 2017 12:43 pm

Are they actually going to compete on price with these fares or just give you less for what you were paying before? Based on how basic economy rolled out domestically, I know which why I am betting.
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commavia
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Re: AA to unbundle some fares on some transatlantic routes

Wed Aug 30, 2017 1:02 pm

Newbiepilot wrote:
The days of loyalty to alliances are going to continue fading away as there is less and less benefit to sticking to a preferred airline and alliance.


Well perhaps that tells us something about the level of value that airlines have been deriving from the "loyalty" of a certain segment of their loyal customers.

cledaybuck wrote:
Are they actually going to compete on price with these fares or just give you less for what you were paying before? Based on how basic economy rolled out domestically, I know which why I am betting.


It seems logical to me that the network carriers will be able to extract some level of price premium - overall, on average - over pure low cost carriers based on the additional value that some customers, even price-sensitive basic economy customers, derive from what they bring. So, for example, network carriers can offer access into certain smaller markets that pure low cost carriers won't serve due to economies of scale, fleet differences, etc. So, for instance, if, among the basic economy passengers on a ORD-BCN flight there is even one passenger connecting in ORD from, say, SDF, that person may well have paid a premium (stage-length adjusted) versus a local ORD-BCN basic economy customer. Additionally, network carriers will also offer the value of nonstop access in some places where pure low cost competitors only offer a connection. So, on that same ORD-BCN flight, there may be a local basic economy customer who could have chosen to connect on WOW over KEF, but in that instance, it is quite possible if not probable that they were willing to pay some premium to fly nonstop on AA.
 
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cosyr
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Re: AA to unbundle some fares on some transatlantic routes

Wed Aug 30, 2017 1:15 pm

My biggest concern is if they try to further match Norwegian's or other ULCC seat pitch, because that will punish you whether you buy a Basic fare or a regular one. With a regular fare you still have to pay extra for Economy Plus/Comfort/Exit Row, which is often down to 34" pitch or what you used to get automatically in Y.
 
sw733
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Re: AA to unbundle some fares on some transatlantic routes

Wed Aug 30, 2017 1:17 pm

Newbiepilot wrote:
MIflyer12 wrote:
Newbiepilot wrote:
What I find really annoying with these basic economy fares is that corporate travel will book into these fares.


Decent corporate travel systems can block these fares -- just as they block F, or J for travel less than xx hours airport to airport.


The bean counters in charge of corporate travel decisions love them especially since corporate travel companies like Concur let the companies define the rules. They don't care if an employee has to sit in a middle seat in the last row, get little to no frequent flyer benefits, and still has to arrive prepared for a meeting. They saved the company $40. Concur and similar corporate travel websites let people choose day, time and select airlines within a specified price range. People who would have selected AA might chose DL or UA so that they can earn full frequent flyer miles, get seat assignments, etc. I don't know many people who book Norwegian, WOW, etc for business travel.


Completely depends on the company. My company has no problem sending me J on anything outside of North America, or paying for extra legroom seats on flights over 3 hours...while allowing me to keep frequent flier miles...and on longhaul trips they send me in two days before (for example arrive Saturday for Monday work). I know several people who work for companies like this. I also know several who work for companies like you mention. It's all over the board, and is really telling of how a company treats its people.
 
ckfred
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Re: AA to unbundle some fares on some transatlantic routes

Wed Aug 30, 2017 2:05 pm

You wonder what the late Alfred Kahn, the father of deregulation would think. I remember, when deregulation was being debated, that Kahn said air travel would become like the offerings of General Motors in the U.S. GM had 5 makes, from Chevrolet to Cadillac. Each make targeted a different income demographic, with Chevy being the entry-level make and Cadillac being the make for very affluent people.

At least in Kahn's vision, the likes of Southwest, People Express, New York Air, and the original Midway were targeting people who might drive, if the price of air travel was too high. But, the long-established carriers, such as Pan Am, American, United, and TWA, would seek to attract passengers who already traveled by air and were willing to pay higher fares for a better on-board product, whether in the front or the back of the plane.
 
mjoelnir
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Re: AA to unbundle some fares on some transatlantic routes

Wed Aug 30, 2017 2:18 pm

bgm wrote:
flyingclrs727 wrote:
wn676 wrote:

Well, luckily they'll still offer the option of not worrying about all the incidentals.


Turkish Airlines serves excellent food even in economy, has a 2 bag limit, and still has excellent prices and comfort to Europe.


Flying to Europe, especially Western Europe from the US via IST is quite a detour. Not to mention the instability in Turkey right now would deter a lot of people from using that option.


Flying to the USA, transferring flights in the hubs of the main USA airlines, one shuttles also quite a bit back and force over the USA to reach ones destination.
 
wn676
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Re: AA to unbundle some fares on some transatlantic routes

Wed Aug 30, 2017 2:39 pm

mjoelnir wrote:
bgm wrote:
flyingclrs727 wrote:

Turkish Airlines serves excellent food even in economy, has a 2 bag limit, and still has excellent prices and comfort to Europe.


Flying to Europe, especially Western Europe from the US via IST is quite a detour. Not to mention the instability in Turkey right now would deter a lot of people from using that option.


Flying to the USA, transferring flights in the hubs of the main USA airlines, one shuttles also quite a bit back and force over the USA to reach ones destination.


For the right price people will backtrack on some pretty crazy routings. But that's the point: for the right price. Using IST to connect between the U.S. and Western Europe requires basically overflying your destination, then backtracking 1,000+ miles. It's possible to do the same thing in the U.S., or anywhere else really, but an airline isn't going to be commanding a premium given all the other nonstop/less circuitous options on their competitors or in the case of the U.S. even within their own networks.
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TomFoolery
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Re: AA to unbundle some fares on some transatlantic routes

Wed Aug 30, 2017 3:17 pm

Newbiepilot wrote:
AA is not just competing with low cost carriers. Airlines like Lufthansa already stripped away frequent flyer benefits and seat assignments. The days of loyalty to alliances are going to continue fading away as there is less and less benefit to sticking to a preferred airline and alliance.


On the one hand, I agree. I tend to be loyal to carriers which I feel meet my needs, treat me well, and when things go wrong, they manage a solution.

On the other hand, it seems that airlines are not courting to the loyalty of the lowest rung of customer, since they have lounges and planes that are full of existing higher fare elite level customers.

As mentioned before, some corporate booking engines demand that the lowest fare non-refundable tickets be bought. Guess what- that is BASIC Y. In Europe, it is even worse, since all fare classes have a BASIC, CLASSIC, FLEX. This way, even when you need a same day ticket, the BASIC fare is still available. I would argue that a $900 VIE-FRA Y ticket is not BASIC at all. But, as long as it is cheaper than the CLASSIC fare, it is a bargain.

The problem with this is that when companies realize how much they lose by non changeable fares, perhaps they will come around. Knowing that my department's travel budget is finite, it pains me to have to throw away a leg and purchase another ticket because a meeting gets extended an extra day. Although it is not my problem, it still turns my stomach.

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Antarius
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Re: AA to unbundle some fares on some transatlantic routes

Wed Aug 30, 2017 3:46 pm

cledaybuck wrote:
Are they actually going to compete on price with these fares or just give you less for what you were paying before? Based on how basic economy rolled out domestically, I know which why I am betting.


That is my only issue. This just adjusts the basic product to the old baseline price and everything else gets more expensive.
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ojjunior
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Re: AA to unbundle some fares on some transatlantic routes

Wed Aug 30, 2017 4:08 pm

bgm wrote:
flyingclrs727 wrote:
wn676 wrote:

Well, luckily they'll still offer the option of not worrying about all the incidentals.


Turkish Airlines serves excellent food even in economy, has a 2 bag limit, and still has excellent prices and comfort to Europe.


Flying to Europe, especially Western Europe from the US via IST is quite a detour. Not to mention the instability in Turkey right now would deter a lot of people from using that option.


Will this instability hold someone at the airport? I don't think so...
If any Country currently with problems would offer a risk to the passengers we would have most of South American and African airports empty,for instance...
 
AWACSooner
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Re: AA to unbundle some fares on some transatlantic routes

Wed Aug 30, 2017 4:32 pm

wn676 wrote:
Mir wrote:
wn676 wrote:
Well, luckily they'll still offer the option of not worrying about all the incidentals.


By paying more, of course.


Kind of goes without saying, doesn't it? I'm all for getting a deal, but if I'm really not up for dealing with the Basic Econ experience, there are other fare classes available. Pay more up front and worry less about incidentals.


I'm sorry, but I just can't stand the posts that just state "pay more" for what you used to get for the price you pay now. I've said it before and I'll say it again, this "economy minus" product offered by the big 3 is nothing more than a SCAM...that same $XXX airfare you're paying right now for that free checked bag and meal on the trans-atlantic flight will get you NONE of that with this introduction...you'll now have to pay EXTRA for that. The airlines market this as a "cost savings for the consumer", but that's a blatant lie...it's nothing more than a fare increase for them. They've proven that on the domestic sector, now they're going after the international.

But hey, it's never about the customer, it's all about the shareholder's return!
 
Ziyulu
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Re: AA to unbundle some fares on some transatlantic routes

Wed Aug 30, 2017 5:12 pm

Will they charge for bags on Basic Economy for international flights?
 
aaexecplat
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Re: AA to unbundle some fares on some transatlantic routes

Wed Aug 30, 2017 5:15 pm

Oh puhleeze. This is just like UA Basic Economy here in the US domestically...conceived an answer to ULCC, then implemented in tons of markets that they were not competing Spirit, and charging either the same for less or more for the same. These airlines are pathetically transparent.
 
commavia
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Re: AA to unbundle some fares on some transatlantic routes

Wed Aug 30, 2017 5:21 pm

aaexecplat wrote:
charging either the same for less or more for the same. These airlines are pathetically transparent.


"Transparent," indeed. "The same for less or more for the same" - I don't think any of the U.S. network carriers has ever claimed otherwise.
 
Varsity1
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Re: AA to unbundle some fares on some transatlantic routes

Wed Aug 30, 2017 5:27 pm

AA already has really cheap TATL fares. I can usually get to places is Europe on them not named LHR for <$850 RT. Unbundling should go sub $600 is a lot of markets.
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CobraKai
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Re: AA to unbundle some fares on some transatlantic routes

Wed Aug 30, 2017 5:45 pm

AWACSooner wrote:
wn676 wrote:
Mir wrote:


I'm sorry, but I just can't stand the posts that just state "pay more" for what you used to get for the price you pay now. I've said it before and I'll say it again, this "economy minus" product offered by the big 3 is nothing more than a SCAM...that same $XXX airfare you're paying right now for that free checked bag and meal on the trans-atlantic flight will get you NONE of that with this introduction...you'll now have to pay EXTRA for that. The airlines market this as a "cost savings for the consumer", but that's a blatant lie...it's nothing more than a fare increase for them. They've proven that on the domestic sector, now they're going after the international.

But hey, it's never about the customer, it's all about the shareholder's return!


Except that you were getting more for the price you pay now. AA has been matching ULCCs with an arguably superior product for years. If you ever looked into it, you would see that AA's O (lowest) fares were NK fares + bag fees + seat assignment. The prices were actually configured that way, yet NK continued to print money and grow market share because people are too lazy to figure that out own their own. So they now charge you more for what you used to get for free, you will get the service that the current ticket price is worth.

As to the shareholders, well they do own the company, and anyone who has money in a retirement account should be glad that corporations are run to maximize shareholder returns.

The lie is that people will pay a few dollars more for a better product - millions of $$ have been lost chasing that.
 
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Super80Fan
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Re: AA to unbundle some fares on some transatlantic routes

Wed Aug 30, 2017 5:56 pm

AWACSooner wrote:
wn676 wrote:
Mir wrote:

By paying more, of course.


Kind of goes without saying, doesn't it? I'm all for getting a deal, but if I'm really not up for dealing with the Basic Econ experience, there are other fare classes available. Pay more up front and worry less about incidentals.


I'm sorry, but I just can't stand the posts that just state "pay more" for what you used to get for the price you pay now. I've said it before and I'll say it again, this "economy minus" product offered by the big 3 is nothing more than a SCAM...that same $XXX airfare you're paying right now for that free checked bag and meal on the trans-atlantic flight will get you NONE of that with this introduction...you'll now have to pay EXTRA for that. The airlines market this as a "cost savings for the consumer", but that's a blatant lie...it's nothing more than a fare increase for them. They've proven that on the domestic sector, now they're going after the international.

But hey, it's never about the customer, it's all about the shareholder's return!


Amen! Couldn't agree more!
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Re: AA to unbundle some fares on some transatlantic routes

Wed Aug 30, 2017 5:57 pm

CobraKai wrote:
AWACSooner wrote:
wn676 wrote:


Except that you were getting more for the price you pay now. AA has been matching ULCCs with an arguably superior product for years. If you ever looked into it, you would see that AA's O (lowest) fares were NK fares + bag fees + seat assignment. The prices were actually configured that way, yet NK continued to print money and grow market share because people are too lazy to figure that out own their own. So they now charge you more for what you used to get for free, you will get the service that the current ticket price is worth.

As to the shareholders, well they do own the company, and anyone who has money in a retirement account should be glad that corporations are run to maximize shareholder returns.

The lie is that people will pay a few dollars more for a better product - millions of $$ have been lost chasing that
.


Yea, it really sucked when jetBlue went under from offering DirecTV and more legroom... Such a shame
 
phxsanslcpdx
Posts: 70
Joined: Mon Aug 01, 2016 4:36 pm

Re: AA to unbundle some fares on some transatlantic routes

Wed Aug 30, 2017 5:57 pm

Agree with this whole post, and especially this last bit.

commavia wrote:
Well that's between the "bean counters" in corporate travel departments and the people in those corporations' HR departments who have trouble attracting or retaining people who refuse to be uncomfortable on business travel. This is no different than corporations steadily forcing employees to downgrade from First to Business, and then in many cases to Premium Economy as its become more available, and Coach in some cases, etc. If employees are that unhappy about companies forcing them to book basic economy fares on long flights, they should tell their employer about it. And in the meantime, AA will adjust its capacity and revenue management accordingly based on however corporate travelers behave. Although, needless to say, this AA executive's quoted comments and intuitive common sense would imply that these fare buckets are going to be managed in such a way that corporate/business travelers aren't really the ones primarily targeted, anyway.


Yep, commavia. If you work for AA and are dissatisfied with your benefits/compensation, then AA's an appropriate target for frustration. If you work for any other employer in the world and are dissatisfied with benefits/compensation, then AA is not the right target.

Newbiepilot wrote:
The bean counters in charge of corporate travel decisions love them especially since corporate travel companies like Concur let the companies define the rules. They don't care if an employee has to sit in a middle seat in the last row, get little to no frequent flyer benefits, and still has to arrive prepared for a meeting. They saved the company $40. Concur and similar corporate travel websites let people choose day, time and select airlines within a specified price range. People who would have selected AA might chose DL or UA so that they can earn full frequent flyer miles, get seat assignments, etc. I don't know many people who book Norwegian, WOW, etc for business travel.


I think AA's hoping that DL and UA will match (or mostly match) this move. But yes, AA is going into this understanding that if they have basic economy fares showing as available at a price point near UA/DL's economy fare, AA will likely lose the sale. So they'll manage the availability to reduce that outcome. The real goal is to show up as an option on those searches that might otherwise only list Norwegian and WOW, and win over some of those customers. For those customers who would otherwise only be seeing two LCC options, this provides a third choice--that's a customer benefit, not a downside.

Seems like there are two categories of corporate travel policies that will go for basic economy...

1) cases where the big picture is obscured by the details... where employees buy basic economy and then pay to bring luggage/get seats/whatever that ends up costing more than a higher-bracket service. This is great from AA's perspective--they got the customer and they ended up getting more revenue off the seat than their old model would've.
2) cases where the corporate travel policy mandates the absolute cheapest everything. Those travelers would've probably ended up with Norwegian or WOW in the status quo, but this way AA can get some of that traffic--and AA isn't particularly bothered about loyalty from flyers from this group anyway, since this bottom-seeking behavior doesn't provide flyers flexibility for decision-making based on loyalty and they aren't high-yielding.
 
Brickell305
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Re: AA to unbundle some fares on some transatlantic routes

Wed Aug 30, 2017 6:00 pm

Antarius wrote:
cledaybuck wrote:
Are they actually going to compete on price with these fares or just give you less for what you were paying before? Based on how basic economy rolled out domestically, I know which why I am betting.


That is my only issue. This just adjusts the basic product to the old baseline price and everything else gets more expensive.


This is what I suspect will happen as well. We've seen it time and time again as "unbundling" has taken over the airline industry. As more and more gets removed from being paid for in the base fare, there is no reduction in price. Just consumers paying extra for what was previously included.
 
stlgph
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Re: AA to unbundle some fares on some transatlantic routes

Wed Aug 30, 2017 6:07 pm

ojjunior wrote:
bgm wrote:
flyingclrs727 wrote:

Turkish Airlines serves excellent food even in economy, has a 2 bag limit, and still has excellent prices and comfort to Europe.


Flying to Europe, especially Western Europe from the US via IST is quite a detour. Not to mention the instability in Turkey right now would deter a lot of people from using that option.


Will this instability hold someone at the airport? I don't think so...
If any Country currently with problems would offer a risk to the passengers we would have most of South American and African airports empty,for instance...


Nope, it will not stop anyone from connecting in Turkey.

Turkish has done quite well filling their seats with a number of $500-$600 airfares from the U.S. to western Europe via Istanbul. LOT Polish has also done well through Warsaw.
if assumptions could fly, airliners.net would be the world's busiest airport
 
Varsity1
Posts: 1961
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Re: AA to unbundle some fares on some transatlantic routes

Wed Aug 30, 2017 6:18 pm

stlgph wrote:
ojjunior wrote:
bgm wrote:

Flying to Europe, especially Western Europe from the US via IST is quite a detour. Not to mention the instability in Turkey right now would deter a lot of people from using that option.


Will this instability hold someone at the airport? I don't think so...
If any Country currently with problems would offer a risk to the passengers we would have most of South American and African airports empty,for instance...


Nope, it will not stop anyone from connecting in Turkey.

Turkish has done quite well filling their seats with a number of $500-$600 airfares from the U.S. to western Europe via Istanbul. LOT Polish has also done well through Warsaw.


anyone? anyone..

Quite a ridiculous claim.
"PPRuNe will no longer allow discussions regarding Etihad Airlines, its employees, executives, agents, or other representatives. Such threads will be deleted." - ME3 thug airlines suing anyone who brings negative information public..
 
michman
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Re: AA to unbundle some fares on some transatlantic routes

Wed Aug 30, 2017 6:37 pm

Brickell305 wrote:
Antarius wrote:
cledaybuck wrote:
Are they actually going to compete on price with these fares or just give you less for what you were paying before? Based on how basic economy rolled out domestically, I know which why I am betting.


That is my only issue. This just adjusts the basic product to the old baseline price and everything else gets more expensive.


This is what I suspect will happen as well. We've seen it time and time again as "unbundling" has taken over the airline industry. As more and more gets removed from being paid for in the base fare, there is no reduction in price. Just consumers paying extra for what was previously included.



Fares are dynamic and TATL fares WILL be going down due to the LCC's influence. Maybe not today or tomorrow, but in a few years, most definitely. The same thing has happened already in domestic markets. 4 or 5 years ago when DL and AA had the Dallas-Detroit market all to themselves, a one-way fare would be $400 - $500 no matter how far in advance you purchased. If you wanted to save, you had to book a roundtrip ticket with a Saturday night stay and you could still expect to pay $250 - $300 roundtrip. Now that WN and NK have entered the market, a one-way advance fare on DL is $73 in basic economy and $88 in main cabin. Now back when DL introduced Basic Economy on this route, it may have been the same price as the former main cabin fare. But, over time as the market environment has changed, those fares have gone way down.
 
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jnev3289
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Re: AA to unbundle some fares on some transatlantic routes

Wed Aug 30, 2017 6:45 pm

Varsity1 wrote:
stlgph wrote:
ojjunior wrote:

Will this instability hold someone at the airport? I don't think so...
If any Country currently with problems would offer a risk to the passengers we would have most of South American and African airports empty,for instance...


Nope, it will not stop anyone from connecting in Turkey.

Turkish has done quite well filling their seats with a number of $500-$600 airfares from the U.S. to western Europe via Istanbul. LOT Polish has also done well through Warsaw.


anyone? anyone..

Quite a ridiculous claim.

Yea, I don't know that I'd 100% avoid a connection there, but I know the wife and I wanted to visit Turkey last year and decided to go somewhere else instead because of the instability. We still want to go someday, we'll just wait a few years
 
stlgph
Posts: 10976
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Re: AA to unbundle some fares on some transatlantic routes

Wed Aug 30, 2017 6:50 pm

Varsity1 wrote:
stlgph wrote:
ojjunior wrote:

Will this instability hold someone at the airport? I don't think so...
If any Country currently with problems would offer a risk to the passengers we would have most of South American and African airports empty,for instance...


Nope, it will not stop anyone from connecting in Turkey.

Turkish has done quite well filling their seats with a number of $500-$600 airfares from the U.S. to western Europe via Istanbul. LOT Polish has also done well through Warsaw.


anyone? anyone..

Quite a ridiculous claim.


Sure, since I work for a global financial news agency and have interviewed Temel Kotil a number of times. I'll make sure to email his secretary and tell him *you* said he doesn't know what he's talking about. Hope the response for a wait doesn't get in the way of you performing your duties of fetching bags at the airport.
if assumptions could fly, airliners.net would be the world's busiest airport
 
berari
Posts: 787
Joined: Wed Jul 06, 2016 3:47 pm

Re: AA to unbundle some fares on some transatlantic routes

Wed Aug 30, 2017 6:59 pm

stlgph wrote:
Varsity1 wrote:
stlgph wrote:

Nope, it will not stop anyone from connecting in Turkey.

Turkish has done quite well filling their seats with a number of $500-$600 airfares from the U.S. to western Europe via Istanbul. LOT Polish has also done well through Warsaw.


anyone? anyone..

Quite a ridiculous claim.


Sure, since I work for a global financial news agency and have interviewed Temel Kotil a number of times. I'll make sure to email his secretary and tell him *you* said he doesn't know what he's talking about. Hope the response for a wait doesn't get in the way of you performing your duties of fetching bags at the airport.


Did you just name drop? Also are you insinuating that a mob-style operation/handling could await those that have different views than that of the THY CEO? You're so full of it.
 
AWACSooner
Posts: 2453
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Re: AA to unbundle some fares on some transatlantic routes

Wed Aug 30, 2017 7:07 pm

jnev3289 wrote:
CobraKai wrote:
AWACSooner wrote:


Except that you were getting more for the price you pay now. AA has been matching ULCCs with an arguably superior product for years. If you ever looked into it, you would see that AA's O (lowest) fares were NK fares + bag fees + seat assignment. The prices were actually configured that way, yet NK continued to print money and grow market share because people are too lazy to figure that out own their own. So they now charge you more for what you used to get for free, you will get the service that the current ticket price is worth.

As to the shareholders, well they do own the company, and anyone who has money in a retirement account should be glad that corporations are run to maximize shareholder returns.

The lie is that people will pay a few dollars more for a better product - millions of $$ have been lost chasing that
.


Yea, it really sucked when jetBlue went under from offering DirecTV and more legroom... Such a shame

Or Southwest from those two free checked bags and NO CHANGE FEES...and only what, 1-2 quarterly losses in the last 45 years?
smh (but not at your post)
 
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stl07
Posts: 1608
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Re: AA to unbundle some fares on some transatlantic routes

Wed Aug 30, 2017 7:21 pm

AWACSooner wrote:
wn676 wrote:
Mir wrote:

By paying more, of course.


Kind of goes without saying, doesn't it? I'm all for getting a deal, but if I'm really not up for dealing with the Basic Econ experience, there are other fare classes available. Pay more up front and worry less about incidentals.


I'm sorry, but I just can't stand the posts that just state "pay more" for what you used to get for the price you pay now. I've said it before and I'll say it again, this "economy minus" product offered by the big 3 is nothing more than a SCAM...that same $XXX airfare you're paying right now for that free checked bag and meal on the trans-atlantic flight will get you NONE of that with this introduction...you'll now have to pay EXTRA for that. The airlines market this as a "cost savings for the consumer", but that's a blatant lie...it's nothing more than a fare increase for them. They've proven that on the domestic sector, now they're going after the international.

But hey, it's never about the customer, it's all about the shareholder's return!

Couldn't agree more!!!
Interesting how every thread is spammed with "bring back paid membership, there are too many spammers"
 
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jnev3289
Posts: 636
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Re: AA to unbundle some fares on some transatlantic routes

Wed Aug 30, 2017 7:23 pm

AWACSooner wrote:
jnev3289 wrote:
CobraKai wrote:

Except that you were getting more for the price you pay now. AA has been matching ULCCs with an arguably superior product for years. If you ever looked into it, you would see that AA's O (lowest) fares were NK fares + bag fees + seat assignment. The prices were actually configured that way, yet NK continued to print money and grow market share because people are too lazy to figure that out own their own. So they now charge you more for what you used to get for free, you will get the service that the current ticket price is worth.

As to the shareholders, well they do own the company, and anyone who has money in a retirement account should be glad that corporations are run to maximize shareholder returns.

The lie is that people will pay a few dollars more for a better product - millions of $$ have been lost chasing that
.


Yea, it really sucked when jetBlue went under from offering DirecTV and more legroom... Such a shame

Or Southwest from those two free checked bags and NO CHANGE FEES...and only what, 1-2 quarterly losses in the last 45 years?
smh (but not at your post)

If there's one thing I've learned from A.net, it's that passengers are only bottom feeding Spirit passengers or Full fare First class Business passengers. There is absolutely no in between.
 
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CobraKai
Posts: 31
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Re: AA to unbundle some fares on some transatlantic routes

Wed Aug 30, 2017 7:24 pm

jnev3289 wrote:
CobraKai wrote:
AWACSooner wrote:


Except that you were getting more for the price you pay now. AA has been matching ULCCs with an arguably superior product for years. If you ever looked into it, you would see that AA's O (lowest) fares were NK fares + bag fees + seat assignment. The prices were actually configured that way, yet NK continued to print money and grow market share because people are too lazy to figure that out own their own. So they now charge you more for what you used to get for free, you will get the service that the current ticket price is worth.

As to the shareholders, well they do own the company, and anyone who has money in a retirement account should be glad that corporations are run to maximize shareholder returns.

The lie is that people will pay a few dollars more for a better product - millions of $$ have been lost chasing that
.


Yea, it really sucked when jetBlue went under from offering DirecTV and more legroom... Such a shame


Nice strawman, or is B6 is dominating the domestic market? BTW, don't they charge bag fees? It seems they are seeing some of the same market forces that other are.

How much did AA lose on more room throughout coach? Even when only charging a $5 premium people weren't willing to pay more. How many carriers aren't seeing the take-up on the economy plus seats that they initially forecast? How many "premium" airlines have come and gone?

It is the ULCCs all over the world that are growing like weeds and giving more established airlines fits. I don't understand how people can't see that.
 
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jnev3289
Posts: 636
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Re: AA to unbundle some fares on some transatlantic routes

Wed Aug 30, 2017 7:29 pm

CobraKai wrote:
jnev3289 wrote:
CobraKai wrote:

Except that you were getting more for the price you pay now. AA has been matching ULCCs with an arguably superior product for years. If you ever looked into it, you would see that AA's O (lowest) fares were NK fares + bag fees + seat assignment. The prices were actually configured that way, yet NK continued to print money and grow market share because people are too lazy to figure that out own their own. So they now charge you more for what you used to get for free, you will get the service that the current ticket price is worth.

As to the shareholders, well they do own the company, and anyone who has money in a retirement account should be glad that corporations are run to maximize shareholder returns.

The lie is that people will pay a few dollars more for a better product - millions of $$ have been lost chasing that
.


Yea, it really sucked when jetBlue went under from offering DirecTV and more legroom... Such a shame


Nice strawman, or is B6 is dominating the domestic market? BTW, don't they charge bag fees? It seems they are seeing some of the same market forces that other are.

How much did AA lose on more room throughout coach? Even when only charging a $5 premium people weren't willing to pay more. How many carriers aren't seeing the take-up on the economy plus seats that they initially forecast? How many "premium" airlines have come and gone?

It is the ULCCs all over the world that are growing like weeds and giving more established airlines fits. I don't understand how people can't see that.

Oh, you have to "dominate the market" to be successful now? What a joke

I'm not saying that the biggest share of the market will pay extra for premium economy or for a quality on-board meal, just that there is a market for it and it can be served effectively and profitably. No question Spirit and Frontier and Ryanair and Easyjet are "more" successful financially, but jetBlue, Southwest, Aegean, and Azul do pretty well for themselves too.
 
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CobraKai
Posts: 31
Joined: Wed Oct 05, 2016 3:04 pm

Re: AA to unbundle some fares on some transatlantic routes

Wed Aug 30, 2017 7:35 pm

jnev3289 wrote:
CobraKai wrote:
jnev3289 wrote:

Yea, it really sucked when jetBlue went under from offering DirecTV and more legroom... Such a shame


Nice strawman, or is B6 is dominating the domestic market? BTW, don't they charge bag fees? It seems they are seeing some of the same market forces that other are.

How much did AA lose on more room throughout coach? Even when only charging a $5 premium people weren't willing to pay more. How many carriers aren't seeing the take-up on the economy plus seats that they initially forecast? How many "premium" airlines have come and gone?

It is the ULCCs all over the world that are growing like weeds and giving more established airlines fits. I don't understand how people can't see that.

Oh, you have to "dominate the market" to be successful now? What a joke



I never said they aren't successful, just like I never said that an airline couldn't offer more and not go under (or that pax are either Full F/J or Spirit pax for that matter). Please don't put words in my mouth.

What I am saying is that the largest section of the air traveling population doesn't care, and wallstreet, market forces, and the airlines all notice that. I have yet to hear any data based rebuttal to that argument.

Yes other airlines do well for themselves, and the legacies are offering fare classes (i.e. products) to cater to pax who care, because they are large enough to cater to both markets.

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