Moderators: jsumali2, richierich, ua900, PanAm_DC10, hOMSaR

 
User avatar
enilria
Topic Author
Posts: 10309
Joined: Fri Feb 22, 2008 7:15 pm

AA Will Start Matching Any Non-stop Fare

Sat Oct 24, 2015 5:56 pm

AA will launch a new fare like DL's basic economy and will fare match anybody flying non-stop. This is a big change and spells doom for NK and F9 I'd say, at least until they come up with a new idea on how to not be matched.

It will also be a mess if they institute carry on bag charges. If they don't, however, they are going to see massive yield erosion. It will be interesting how this plays out.

American will match competitors' prices on any nonstop route, its president, Scott Kirby, said on an investor call.

http://www.reuters.com/article/2015/...line-results-idUSKCN0SH16K20151023

http://blogs.barrons.com/stockstowat...ompete-with-the-low-cost-carriers/

http://www.bizjournals.com/dallas/bl...ceo-doug-parker-says-carriers.html

[Edited 2015-10-24 10:59:54]
 
User avatar
TWA772LR
Posts: 7357
Joined: Thu Nov 17, 2011 6:12 am

RE: AA Will Start Matching Any Non-stop Fare

Sat Oct 24, 2015 6:07 pm

Does this count for TPAC/TATL as well, or only domestic?
When wasn't America great?


The thoughts and opinions shared under this username are mine and are not influenced by my employer.
 
User avatar
Miami
Posts: 6181
Joined: Sat Sep 15, 2012 8:37 pm

RE: AA Will Start Matching Any Non-stop Fare

Sat Oct 24, 2015 6:08 pm

Quoting enilria (Thread starter):
American will match competitors' prices on any nonstop route, its president, Scott Kirby, said on an investor call.

Great move. I like it.
Aviation is proof that given, the will, we have the capacity to achieve the impossible. - Eddie Rickenbacker
 
User avatar
enilria
Topic Author
Posts: 10309
Joined: Fri Feb 22, 2008 7:15 pm

RE: AA Will Start Matching Any Non-stop Fare

Sat Oct 24, 2015 7:04 pm

Quoting Miami (Reply 2):

I think AA had to do it, but it will hurt NK and F9. That's what is intended. They were growing too large in AA hubs.
 
AWACSooner
Posts: 2560
Joined: Tue Jan 22, 2008 12:35 am

RE: AA Will Start Matching Any Non-stop Fare

Sat Oct 24, 2015 7:12 pm

Quoting enilria (Reply 3):

I think AA had to do it, but it will hurt NK and F9. That's what is intended. They were growing too large in AA hubs.

Just as long as they don't charge for carry-ons...and I pray the others match...go after the bottom feeders.
 
kingcavalier
Posts: 412
Joined: Mon Nov 06, 2006 4:02 am

RE: AA Will Start Matching Any Non-stop Fare

Sat Oct 24, 2015 7:21 pm

It gives the impression that inventory will be limited and until AA gets its CASM down to the ULCC level I'm not convinced this will have much effect.
Travel is fatal to prejudice, bigotry, and narrow-mindedness
 
User avatar
Miami
Posts: 6181
Joined: Sat Sep 15, 2012 8:37 pm

RE: AA Will Start Matching Any Non-stop Fare

Sat Oct 24, 2015 7:32 pm

Quoting enilria (Reply 3):
I think AA had to do it, but it will hurt NK and F9. That's what is intended. They were growing too large in AA hubs.

Here in Miami, I can agree with that.
Aviation is proof that given, the will, we have the capacity to achieve the impossible. - Eddie Rickenbacker
 
nkops
Posts: 2237
Joined: Fri Jun 03, 2005 10:09 am

RE: AA Will Start Matching Any Non-stop Fare

Sat Oct 24, 2015 7:54 pm

So will it be all flights or just ones timed similiar... for example, will AA do these fares on all of their n/s from PHL to ORD to match the one NK flight?
Turn left heading 080 contact departure
 
OB1504
Posts: 3988
Joined: Tue Jul 27, 2004 5:10 am

RE: AA Will Start Matching Any Non-stop Fare

Sat Oct 24, 2015 8:52 pm

AA has had some ridiculously low fares out of MIA lately. $94 RT to IAH, $97 RT to ATL, $112 RT to DFW, $121 RT to LGA, $187 RT to LAX, for some examples. All markets with NK competition.

My guess is that they'll be extremely restricted fares like DL's. No advance seat selection, maybe no frequent flier credit. They could technically be non-changeable but a $100 RT is already less than the $200 change fee so that would make no difference.

I don't see AA implementing a carry-on baggage fee because of the difficulty of enforcing it when only a minority would have tickets like this.

[Edited 2015-10-24 13:54:58]
 
FWAERJ
Posts: 2823
Joined: Wed Jun 07, 2006 1:23 am

RE: AA Will Start Matching Any Non-stop Fare

Sat Oct 24, 2015 10:27 pm

Quoting Miami (Reply 6):

Quoting enilria (Reply 3):
I think AA had to do it, but it will hurt NK and F9. That's what is intended. They were growing too large in AA hubs.

Here in Miami, I can agree with that.

And ORD is now F9's #2 city behind DEN - not bad for an airline that wasn't serving ORD two years ago. Of course, ORD is a huge station for NK as well.

In fact, out of all the AA hubs, all have direct or indirect ULCC competition (JFK doesn't really count as NK does operate at LGA). NK is #2 at DFW; PHX has F9 and NK; LAX has NK, F9, and G4; CLT has G4 up the road at USA; DCA has NK up the road at BWI; PHL has a rapidly growing F9 presence plus NK there and at ACY; and MIA has F9 plus a huge NK presence up the road at FLL.

AA could be on to something here. Of course, it won't affect me at FWA much as AA only competes on the ORD route with UA here, but the point is to defend market share among hub O&D pax.
B721/722/731/732/733/735/73G/738/739/742/752/753/762/763, A300/319/320, DC-9/10, MD-82/83/88/90, ERJ-140/145, CRJ-200/700, Q200, SF340, AS350
 
flyguy89
Posts: 3132
Joined: Tue Feb 24, 2009 6:43 pm

RE: AA Will Start Matching Any Non-stop Fare

Sat Oct 24, 2015 10:42 pm

Quoting enilria (Thread starter):
This is a big change and spells doom for NK and F9 I'd say, at least until they come up with a new idea on how to not be matched.

That's a little over-dramatic. They're only price matching a very limited quantity of their inventory, a marginal amount really. And quite frankly they don't have the cost structure to give away more than that, at least not in any amount to really put a dent in the ULCC's.
 
User avatar
usdcaguy
Posts: 1549
Joined: Mon Jan 26, 2004 12:41 pm

RE: AA Will Start Matching Any Non-stop Fare

Sat Oct 24, 2015 11:41 pm

Is AA no longer interested in segmentation? It seems that matching NK/F9 (WN is now a legacy) means that you no longer esteem your product and do not cater to a a lucrative market. What is so wrong with the AA product that makes it act so desperately? Everyone is watching, and the markets are being turned off. This may have the effect of doing more to destroy the quality of their revenue than win market share.
 
PlanesNTrains
Posts: 9524
Joined: Tue Feb 01, 2005 4:19 pm

RE: AA Will Start Matching Any Non-stop Fare

Sat Oct 24, 2015 11:52 pm

Quoting usdcaguy (Reply 11):

Is AA no longer interested in segmentation? It seems that matching NK/F9 (WN is now a legacy) means that you no longer esteem your product and do not cater to a a lucrative market. What is so wrong with the AA product that makes it act so desperately? Everyone is watching, and the markets are being turned off. This may have the effect of doing more to destroy the quality of their revenue than win market share.

They showed in their earnings call (I believe) that the ULCC's were really hitting their PRASM. They shared how 87% of their customers only flew them once the entire year. They I believe discussed how exposed they are to the ULCC's in their route network.

Bottom line: They are being affected by the ULCCs and at the same time the vast majority of their customers are clearly choosing them based on price (versus being frequent flyers). They obviously feel they need to take the battle to the ULCC's.

Aside from that, going back to the OP, would you consider a statement about their fare-matching to be "signalling"?

-Dave
-Dave


MAX’d out on MAX threads. If you are starting a thread, and it’s about the MAX - stop. There’s already a thread that covers it.
 
ty97
Posts: 659
Joined: Fri May 15, 2015 1:06 am

RE: AA Will Start Matching Any Non-stop Fare

Sun Oct 25, 2015 12:01 am

Quoting OB1504 (Reply 8):
I don't see AA implementing a carry-on baggage fee because of the difficulty of enforcing it when only a minority would have tickets like this.

Agreed, but they could pretty easily (I would think) put all these folks in a newly defined Group 6 for boarding so they get last dibs at overhead space.
 
User avatar
airportugal310
Posts: 3674
Joined: Sun Apr 11, 2004 12:49 pm

RE: AA Will Start Matching Any Non-stop Fare

Sun Oct 25, 2015 12:19 am

I've priced out a few AA fares in recent weeks and found them to be discounting their Business class fares LOWER in some cases than their Y fares. One such example was LAS-PHX, a short leg no doubt, but I bought a refundable front cabin fare for $10 less than their Y non-refundable fare...

Seems they are pricing lower against themselves too!

I used to be anti-AA for personal reasons, but they are catching my attention more and more

Quoting nkops (Reply 7):
So will it be all flights or just ones timed similiar... for example, will AA do these fares on all of their n/s from PHL to ORD to match the one NK flight?

That is a great question...
“They bought their tickets, they knew what they were getting into. I say, let 'em crash.”
 
michman
Posts: 901
Joined: Sat Dec 23, 2006 9:51 am

RE: AA Will Start Matching Any Non-stop Fare

Sun Oct 25, 2015 12:20 am

I think some may be interpreting this the wrong way. I don't think they will match in the sense of some fare guarantee like offering (show us a competitors price and we'll match it). Rather, I think they will just publish matching fares on the same routes with similar timings (already see a fair amount of such matching right now). And, yes, I agree they likely have inventory restrictions and limit the number of actual seats they sell at these fares.
 
rta
Posts: 1414
Joined: Mon Jan 26, 2015 2:01 am

RE: AA Will Start Matching Any Non-stop Fare

Sun Oct 25, 2015 12:22 am

I see a lot of flights (mainly between Dallas, Miami, and Chicago) with extremely cheap fares, perhaps no more than $5-10 higher than a ULCC. I hope these fares won't be replaced with something that offers no seat booking option and reduced frequent flyer benefits.
 
Sightseer
Posts: 998
Joined: Mon Jan 12, 2015 6:04 am

RE: AA Will Start Matching Any Non-stop Fare

Sun Oct 25, 2015 12:26 am

Quoting Airportugal310 (Reply 14):
Quoting nkops (Reply 7):
So will it be all flights or just ones timed similiar... for example, will AA do these fares on all of their n/s from PHL to ORD to match the one NK flight?

That is a great question...

My recent (albeit limited) experience on ATL-DFW is that they match on most, if not all, flights, not just those at similar times to NK or F9.
 
User avatar
OA412
Moderator
Posts: 4797
Joined: Thu Dec 28, 2000 6:22 am

RE: AA Will Start Matching Any Non-stop Fare

Sun Oct 25, 2015 12:33 am

Quoting OB1504 (Reply 8):
AA has had some ridiculously low fares out of MIA lately. $94 RT to IAH, $97 RT to ATL, $112 RT to DFW, $121 RT to LGA, $187 RT to LAX, for some examples. All markets with NK competition.

UA's been price matching NK on DEN-LAX. I haven't checked any other routes, but I wouldn't be surprised to see UA matching fares in those markets out of DEN as well.
Hughes Airwest - Top Banana In The West
 
IndianicWorld
Posts: 3402
Joined: Mon Jun 04, 2001 11:32 am

RE: AA Will Start Matching Any Non-stop Fare

Sun Oct 25, 2015 1:48 am

Quoting usdcaguy (Reply 11):
Is AA no longer interested in segmentation? It seems that matching NK/F9 (WN is now a legacy) means that you no longer esteem your product and do not cater to a a lucrative market. What is so wrong with the AA product that makes it act so desperately? Everyone is watching, and the markets are being turned off. This may have the effect of doing more to destroy the quality of their revenue than win market share.

Having experienced AA for the first time this year, I can see why people don't want to pay more for what they offer.

The difference between the ULCC and the legacy carriers is getting smaller by the day.
 
Dreamflight767
Posts: 496
Joined: Sun Dec 28, 2008 10:43 pm

RE: AA Will Start Matching Any Non-stop Fare

Sun Oct 25, 2015 2:26 am

Ahhh...All they will do is jack up the price in 2nd markets and non-competitive routes and make-up the difference.
 
User avatar
RWA380
Posts: 5747
Joined: Fri Feb 18, 2005 10:51 am

RE: AA Will Start Matching Any Non-stop Fare

Sun Oct 25, 2015 2:27 am

Quoting kingcavalier (Reply 5):

It gives the impression that inventory will be limited and until AA gets its CASM down to the ULCC level I'm not convinced this will have much effect.

I'm sure you are correct, no airline in this day & age has zero inventory control, I'm very sure the seats are rather limited.

Quoting FWAERJ (Reply 9):
And ORD is now F9's #2 city behind DEN - not bad for an airline that wasn't serving ORD two years ago. Of course, ORD is a huge station for NK as well.

I know both UA & AA have felt the presence of first WN at MDW & more recently NK & F9 at ORD. Chicago is one big transit city & huge O/D market, I think Chicago is better suited to having both mainline & ULCC operations than most cities.

Quoting usdcaguy (Reply 11):
What is so wrong with the AA product that makes it act so desperately?

Nothing, in fact it's so good that they can do this type of P.R. campaign & it not make much difference to the bottom line.

It's been suggested many times here before, that both NK & F9 stimulate traffic in the markets they enter & not steal away much revenue away from the airlines currently flying those routes, but I expected that was false.

Many have argued the only people flying NK or F9 would have otherwise driven or taken a bus or train. I suspect that AA is just trying to put butts in middle seats to make a few more dollars on flights that are already going to happen.

Quoting michman (Reply 15):
I agree they likely have inventory restrictions and limit the number of actual seats they sell at these fares.


Of course, that would be inventory control's job, a job that I'd be thankful to never be involved with, too much thinking.

Quoting rta (Reply 16):

I see a lot of flights (mainly between Dallas, Miami, and Chicago) with extremely cheap fares, perhaps no more than $5-10 higher than a ULCC. I hope these fares won't be replaced with something that offers no seat booking option and reduced frequent flyer benefits.

I'd be rather surprised if that wasn't the ultimate goal once AA gets a small but loyal travel base of cheap flyers, that can go any day of the week & any time of the day & fill in the middle seats.

Quoting OA412 (Reply 18):
UA's been price matching NK on DEN-LAX. I haven't checked any other routes, but I wouldn't be surprised to see UA matching fares in those markets out of DEN as well.

Is there any route in America that is more crowded than DEN-LAX? I suppose UA is matching not only NK, but F9, WN as well. I can't imagine any carrier is making a dime on this route currently. If they are making anything, a dime is about all.
707 717 720 727-1/2 737-1/2/3/4/5/6/7/8/9 747-1/2/3/4 757-2/3 767-2/3/4 777-2/3 DC8 DC9 MD80/2/7/8 D10-1/3/4 M11 L10-1/2/5 A300/310/320
AA AC AQ AS BA BD BN CO CS DL EA EZ HA HG HP KL KN MP MW NK NW OZ PA PS QX RC RH RW SA TG TW UA US VS WA WC WN WP YS 8M
 
Woodreau
Posts: 1975
Joined: Mon Sep 24, 2001 6:44 am

RE: AA Will Start Matching Any Non-stop Fare

Sun Oct 25, 2015 3:15 am

Does AA, DL, UA really want the kind of passenger the flies on NK or F9 at those prices? Once you see the kind of people who fly at those prices, they might not want them to return.
Bonus animus sit, ab experientia. Quod salvatum fuerit de malis usu venit judicium.
 
User avatar
enilria
Topic Author
Posts: 10309
Joined: Fri Feb 22, 2008 7:15 pm

RE: AA Will Start Matching Any Non-stop Fare

Sun Oct 25, 2015 3:33 am

Quoting AWACSooner (Reply 4):
Just as long as they don't charge for carry-ons...and I pray the others match...go after the bottom feeders.

I wouldn't rule that out.

Quoting Miami (Reply 6):
Here in Miami, I can agree with that.
Quoting OB1504 (Reply 8):

AA has had some ridiculously low fares out of MIA lately. $94 RT to IAH, $97 RT to ATL, $112 RT to DFW, $121 RT to LGA, $187 RT to LAX, for some examples. All markets with NK competition.

I would hope they would take a premium in MIA over FLL. F9 is in MIA, though.

Quoting FWAERJ (Reply 9):
And ORD is now F9's #2 city behind DEN - not bad for an airline that wasn't serving ORD two years ago. Of course, ORD is a huge station for NK as well.

That was a great station for F9 and NK. DFW and ORD are clearly flash points. DL is fairly quiet on all of this at their hubs.

Quoting flyguy89 (Reply 10):
They're only price matching a very limited quantity of their inventory, a marginal amount really.

F9 and NK are only $59 on a limited quantity of their inventory.

Quoting flyguy89 (Reply 10):
And quite frankly they don't have the cost structure to give away more than that,

But when you overlap with ULCCs on 5% of your network, it doesn't matter if your costs are lower.

Quoting PlanesNTrains (Reply 12):
They showed in their earnings call (I believe) that the ULCC's were really hitting their PRASM.

Chicken or egg. Is the ULCC pricing the problem or is the matching of ULCC pricing the problem?

Quoting PlanesNTrains (Reply 12):
Aside from that, going back to the OP, would you consider a statement about their fare-matching to be "signalling"?

I think you are right. Saying you will match any non-stop fare is a threat to the ULCCs and is signaling. Great point. It's saying publicly "don't fly to our markets or we will price under our cost to make sure you fail". I think the DOJ could make a good case that is illegal.
 
727LOVER
Posts: 8633
Joined: Tue Oct 09, 2001 12:22 am

RE: AA Will Start Matching Any Non-stop Fare

Sun Oct 25, 2015 3:46 am

Quoting Woodreau (Reply 22):
Does AA, DL, UA really want the kind of passenger the flies on NK or F9 at those prices? Once you see the kind of people who fly at those prices, they might not want them to return.

What exactly are you saying?

If I found a fare on NK or F9 from ORD-LGA for $160 roundtrip, I'd take it. Are you saying I'm lowlife scum?  
"We must accept finite disappointment, but never lose infinite hope." - Martin Luther King, Jr.
 
PlanesNTrains
Posts: 9524
Joined: Tue Feb 01, 2005 4:19 pm

RE: AA Will Start Matching Any Non-stop Fare

Sun Oct 25, 2015 3:46 am

Quoting Dreamflight767 (Reply 20):
Ahhh...All they will do is jack up the price in 2nd markets and non-competitive routes and make-up the difference.

Until the market responds by not flying. Again, perishable inventory. I'm sure they'll try though.

Quoting Woodreau (Reply 22):
Does AA, DL, UA really want the kind of passenger the flies on NK or F9 at those prices? Once you see the kind of people who fly at those prices, they might not want them to return.

Elitist much?

Quoting enilria (Reply 23):
I think the DOJ could make a good case that is illegal.

Perhaps, but I'm guessing AA could make a good case that they were just explaining to their shareholders how they planned to RESPOND to the ULCC's.  

-Dave
-Dave


MAX’d out on MAX threads. If you are starting a thread, and it’s about the MAX - stop. There’s already a thread that covers it.
 
DeltaXNA
Posts: 458
Joined: Thu Mar 14, 2013 8:52 am

RE: AA Will Start Matching Any Non-stop Fare

Sun Oct 25, 2015 3:49 am

So will they match WN at DAL even if AA uses DFW? or does it have to be from the same airport?
 
Flighty
Posts: 9963
Joined: Thu Apr 05, 2007 3:07 am

RE: AA Will Start Matching Any Non-stop Fare

Sun Oct 25, 2015 3:57 am

Enrilia, I think AA has a right to match fares, and even announce that ahead of time. But it does not have a right to announce it will beat fares, or anything else about forward looking pricing strategies.

The reason that would be illegal is because games of intimidation would result. Then, Goldman Sachs or whatever would end up owning a monopoly on all airline travel. It all depends on whose pricing threats are deemed to most credible and powerful. That person wins dictatorship over the market, and every customer must pay them whatever price.

For example DL could announce they will match any Alaska fare, minus $75. Within several months, maybe 9-10, Alaska would shut down, their load factors at 20-30% if that. That's why it is usually not allowed. But announcing to "match," I suppose cannot be infringed. That's basic competition.
 
FlyingSicilian
Posts: 1635
Joined: Mon Mar 02, 2009 7:53 pm

RE: AA Will Start Matching Any Non-stop Fare

Sun Oct 25, 2015 4:29 am

Love to book some of the 49-59 dollar non-stops from IAH-PHL on AA that Frontier currently fly.

Will be nice  
“Without seeing Sicily it is impossible to understand Italy.Sicily is the key of everything.”-Goethe "Journey to Italy"
 
User avatar
green12324
Posts: 89
Joined: Wed Feb 25, 2015 8:49 am

RE: AA Will Start Matching Any Non-stop Fare

Sun Oct 25, 2015 5:51 am

This is risky for AA. It really stacks their product quality up against the ULCCs, and we'll see who succeeds. I'd argue that any legacy airline offers only marginally better service than an ULCC, especially for passengers who care primarily about price and punctual departure/arrival. I just don't see the average ULCC passenger clamoring to fly on AA instead of Frontier, especially if it will involve extra steps in ticketing.

Travelers who are aware of/care about the "superior" product quality on American are likely already paying the higher fare to fly on AA. Now AA is losing money because these guys can price match a low cost carrier before booking their ticket. This could really cost American a lot in markets where there is a high volume of business travel served by JetBlue. Doing a quick search on the airline's respective webpages showed American's lowest fare EWR-CLT to be $606. JetBlue was only $264.

AA with its high cost structure only serves to lose in this deal, unless it can steal a large enough market share to force out these other airlines. I just don't see that happening.
The views expressed in this post are my own. They have not
been reviewed or approved by my employer.
 
dc10lover
Posts: 1594
Joined: Mon Dec 29, 2014 6:11 pm

RE: AA Will Start Matching Any Non-stop Fare

Sun Oct 25, 2015 6:24 am

AA just wants to rid the competition of NK & F9. Once they are out, AA will jack up the fares sky high.

Or do a "Robert Crandall". Charge $1 on every flight, drive out competitors, then when they leave jack up the fare sky high.  
Why endure the nightmare and congestion of LAX when BUR, LGB, ONT & SNA is so much easier to fly in and out of. Same with OAK & SJC when it comes to SFO.
 
User avatar
LAX772LR
Posts: 13349
Joined: Sun Nov 09, 2014 11:06 pm

RE: AA Will Start Matching Any Non-stop Fare

Sun Oct 25, 2015 8:45 am

Quoting usdcaguy (Reply 11):
(WN is now a legacy)

WN is not now (nor can it ever be) a Legacy carrier, by the very definition of the term.

The only surviving mainline Legacies are DL, UA, AA, and AS.... the airlines who were granted federal authority for interstate operation prior to 1978, thus retaining that legacy operational authority post deregulation.

WN never had that. Their first foray outside of Texas (to MSY) didn't come until fall of 1979.




Quoting usdcaguy (Reply 11):
you no longer esteem your product and do not cater to a a lucrative market. What is so wrong with the AA product that makes it act so desperately?

....realization that the overwhelming majority of domestic Coach pax don't give a damn about "product," and will nearly always select whomever offers the lowest price (within a given travel time frame) as their primary point of consideration.

[Edited 2015-10-25 01:58:04]
I myself, suspect a more prosaic motive... ~Thranduil
 
Brewfangrb
Posts: 292
Joined: Tue Nov 11, 2014 3:13 am

RE: AA Will Start Matching Any Non-stop Fare

Sun Oct 25, 2015 9:21 am

Quoting 727LOVER (Reply 24):
If I found a fare on NK or F9 from ORD-LGA for $160 roundtrip, I'd take it. Are you saying I'm lowlife scum?  

Not you, specifically. But there's a People of Walmart website and not a People of Nordstrom's for a reason, right?

Also, regardless of the particular qualities of the average NK or F9 pax, I will never, ever fly on them, short of there being absolutely no other option. Call it elitist. I say I am a pax that DOES focus on the product, rather than the fare. There's lot of "haha" stuff about Y being "cattle class" but given what is known about NK (more so than F9, I suppose), can you imagine that flight being comfortable in any way?

And if your response is "For $160 RT, I'll lie on the floor!", then that's your choice. No biggie.
 
Travelmanager
Posts: 136
Joined: Sat Jan 18, 2014 9:05 pm

RE: AA Will Start Matching Any Non-stop Fare

Sun Oct 25, 2015 12:32 pm

Quoting rta (Reply 16):

I see a lot of flights (mainly between Dallas, Miami, and Chicago) with extremely cheap fares, perhaps no more than $5-10 higher than a ULCC. I hope these fares won't be replaced with something that offers no seat booking option and reduced frequent flyer benefits.

I think this is exactly what you will see. There is no way for an airline that still gives mileage credit and bonuses off of miles flown and not fare paid to be profitable with a $5 to $10 price premium vs. an ULCC. There are many top tier flyers who qualify for free bags, 100% mileage bonuses and upgrades that dilute the fare even more. The only way to stay competitive is to match the price of the ULCC with a product that doesn't end up giving a hefty mileage rebate, frequent flyer benefits, upgrades and lounge access on a ULCC type fare.
 
PlanesNTrains
Posts: 9524
Joined: Tue Feb 01, 2005 4:19 pm

RE: AA Will Start Matching Any Non-stop Fare

Sun Oct 25, 2015 4:33 pm

Quoting brewfangrb (Reply 32):
People of Nordstrom's for a reason, right?

Uh, my daughter works at Nordstrom and you'd be very surprised by the clientele there at times. Just because people don't come in filming them doesn't mean anything.

I sometimes wonder less about the people in the Walmart pics than I do the people who take and post them. Kinda like I sometimes worry less about the low-class passenger than I do the people who sit and talk about them.

-Dave
-Dave


MAX’d out on MAX threads. If you are starting a thread, and it’s about the MAX - stop. There’s already a thread that covers it.
 
HPRamper
Posts: 5057
Joined: Sat May 14, 2005 4:22 am

RE: AA Will Start Matching Any Non-stop Fare

Sun Oct 25, 2015 5:59 pm

Quoting LAX772LR (Reply 31):
WN is not now (nor can it ever be) a Legacy carrier, by the very definition of the term.

Legacy, no. Major, certainly. I think the two are often (improperly, but understandably) used interchangeably. For many years, the legacies were realistically the only majors.
 
tortugamon
Posts: 6795
Joined: Tue Apr 09, 2013 11:14 pm

RE: AA Will Start Matching Any Non-stop Fare

Sun Oct 25, 2015 6:47 pm

Quoting enilria (Thread starter):
This is a big change and spells doom for NK and F9 I'd say

There is so much growth opportunity out there for ULCCs that this AA announcement will do very little.

Quoting flyguy89 (Reply 10):
That's a little over-dramatic. They're only price matching a very limited quantity of their inventory, a marginal amount really. And quite frankly they don't have the cost structure to give away more than that, at least not in any amount to really put a dent in the ULCC's.

Completely agree. This can only have a modest impact on the ULCCs.

Quoting enilria (Reply 23):
But when you overlap with ULCCs on 5% of your network, it doesn't matter if your costs are lower

"28% of American’s domestic capacity overlaps with Spirit’s."
"11% of American’s domestic ASMs overlap with ULCC Frontier Airlines’."
http://atwonline.com/blog/american-takes-spirit-seriously

Quoting Green12324 (Reply 29):
This is risky for AA. It really stacks their product quality up against the ULCCs, and we'll see who succeeds. I'd argue that any legacy airline offers only marginally better service than an ULCC, especially for passengers who care primarily about price and punctual departure/arrival

Who succeeds in Quality? Which ULCC do you see exceeding DL/AA on quality? The legacy carriers tend to have better on-time performance and I am not really sure that target market cares as much about on-time performance especially because they are mostly P2P:
http://skift.com/2015/02/10/u-s-airl...-best-on-time-performance-in-2014/

tortugamon
 
ScottB
Posts: 7131
Joined: Fri Jul 28, 2000 1:25 am

RE: AA Will Start Matching Any Non-stop Fare

Mon Oct 26, 2015 1:53 am

Quoting usdcaguy (Reply 11):
What is so wrong with the AA product that makes it act so desperately?

Have you flown on the new A319s? They're almost universally reviled for tight seat pitch and very hard seats.

Quoting brewfangrb (Reply 32):
Not you, specifically. But there's a People of Walmart website and not a People of Nordstrom's for a reason, right?

Honestly it's really just volume. Millions of people step foot in a Walmart every day so someone, somewhere is just plain more likely to find a weird fellow customer on any given day. The guy who pooped on a service cart about 20 years ago was an investment banker flying in F on United.

Quoting ty97 (Reply 13):
they could pretty easily (I would think) put all these folks in a newly defined Group 6 for boarding so they get last dibs at overhead space.

I'm not sure how well this would work operationally if the passengers flying on ULCC-match fares all had to board last and pay for a gate-check bag in the event of the overhead bins being full. It seems that would be a recipe for chronic departure delays.

Quoting enilria (Reply 23):
I would hope they would take a premium in MIA over FLL. F9 is in MIA, though.

I have to wonder if this is being partly driven by the talk of NK moving much or all of its service over to MIA from FLL. If NK were to be able to directly affect pricing at MIA, that would seriously impact AA's revenue at the MIA hub, considering that pretty much every Latin market of note outside deep South America can be served by A32X from MIA.
 
User avatar
LAX772LR
Posts: 13349
Joined: Sun Nov 09, 2014 11:06 pm

RE: AA Will Start Matching Any Non-stop Fare

Mon Oct 26, 2015 2:50 am

Quoting brewfangrb (Reply 32):
But there's a People of Walmart website and not a People of Nordstrom's for a reason, right?

...perhaps there SHOULD be a website about the psychology of people who buy severely overpriced merchandise that they could easily get elsewhere for less money and with similar effort-- just sayin'.


Quoting HPRamper (Reply 35):
I think the two are often (improperly, but understandably) used interchangeably.

Part of the reason we're here is for the exchange of ideas, thwarting misinformation is a part of that.
I myself, suspect a more prosaic motive... ~Thranduil
 
sccutler
Posts: 5840
Joined: Thu Jan 27, 2000 12:16 pm

RE: AA Will Start Matching Any Non-stop Fare

Mon Oct 26, 2015 2:52 am

Barring any major changes in how they do business, AA's buying experience will always be vastly better than that of NK or F9 (...I still wanted to type "FL"!) - so, perhaps the press will remind people to shop AA and save some buy-time irritation. In addition, AA's typically greater frequency should help.

I think it will be good for business to publicize this - in my observation, they have been just about matching anyway.

---

And, as someone above noted, it is true that there are times when AA's refundable coach fares are higher than their published F fares. I have been pleased to take due advantage thereof!
...three miles from BRONS, clear for the ILS one five approach...
 
User avatar
LAX772LR
Posts: 13349
Joined: Sun Nov 09, 2014 11:06 pm

RE: AA Will Start Matching Any Non-stop Fare

Mon Oct 26, 2015 3:02 am

Quoting sccutler (Reply 39):
F9 (...I still wanted to type "FL"!)

Dude! I do that too.

RIP FL  
I myself, suspect a more prosaic motive... ~Thranduil
 
User avatar
enilria
Topic Author
Posts: 10309
Joined: Fri Feb 22, 2008 7:15 pm

RE: AA Will Start Matching Any Non-stop Fare

Mon Oct 26, 2015 3:07 am

Quoting PlanesNTrains (Reply 25):
Quoting enilria (Reply 23):
I think the DOJ could make a good case that is illegal.

Perhaps, but I'm guessing AA could make a good case that they were just explaining to their shareholders how they planned to RESPOND to the ULCC's.

Th question is who is the audience and it could be either. One is illegal.

Quoting tortugamon (Reply 36):
Quoting enilria (Reply 23):
But when you overlap with ULCCs on 5% of your network, it doesn't matter if your costs are lower

"28% of American’s domestic capacity overlaps with Spirit’s."
"11% of American’s domestic ASMs overlap with ULCC Frontier Airlines’."
http://atwonline.com/blog/american-t...ously

That's the same overlap method the DOJ uses for mergers...and we know that doesn't work. If they did it on O&D revenue it would be MUCH smaller.
 
User avatar
LAX772LR
Posts: 13349
Joined: Sun Nov 09, 2014 11:06 pm

RE: AA Will Start Matching Any Non-stop Fare

Mon Oct 26, 2015 3:14 am

Quoting enilria (Reply 41):
and we know that doesn't work.

Who is "we" and based on what metrics?
I myself, suspect a more prosaic motive... ~Thranduil
 
Brewfangrb
Posts: 292
Joined: Tue Nov 11, 2014 3:13 am

RE: AA Will Start Matching Any Non-stop Fare

Mon Oct 26, 2015 3:14 am

Quoting LAX772LR (Reply 38):
...perhaps there SHOULD be a website about the psychology of people who buy severely overpriced merchandise that they could easily get elsewhere for less money and with similar effort-- just sayin'.

Completely irrelevant. And, a) overpriced is a relative term b) good luck finding a large number of products you find at Nordstrom's at Walmart.

Quoting ScottB (Reply 37):
Honestly it's really just volume. Millions of people step foot in a Walmart every day so someone, somewhere is just plain more likely to find a weird fellow customer on any given day.

That's true.

I guess I'll simplify: If one flies on an airline entirely based on fare and irrespective of service, the only thing they have a reasonable expectation to is arriving. And that's ok. That's what they're buying. But I don't have any patience for people complaining about pitch, food options (of any kind), IFE or fees on NK or F9. Forget altogether who's on the plane with you.
 
User avatar
LAX772LR
Posts: 13349
Joined: Sun Nov 09, 2014 11:06 pm

RE: AA Will Start Matching Any Non-stop Fare

Mon Oct 26, 2015 8:23 am

Quoting brewfangrb (Reply 43):
Completely irrelevant.

That entire odd analogy? Indeed, it is.



Quoting brewfangrb (Reply 43):
good luck finding a large number of products you find at Nordstrom's at Walmart.

Please pay closer attention before you attempt to refute: no one said that you could find them specifically at Walmart.



Quoting brewfangrb (Reply 43):
But I don't have any patience for people complaining about pitch, food options (of any kind), IFE or fees on NK or F9

Why would you have it for those whining about such on any mainline airline? ...especially a legacy, where they have the option of gaining increases in all of the above, simply by paying more.



Quoting Airportugal310 (Reply 44):
Captain Self Righteous has arrived! Everyone stand up and clap!

That's the limit of your wit? ...hmm, poor guy.  

That unfortunateness aside, the question stands-- particularly seeing as it seems to be "working" just fine.
Thus again, based on what metrics?

[Edited 2015-10-26 01:24:52]
I myself, suspect a more prosaic motive... ~Thranduil
 
User avatar
RWA380
Posts: 5747
Joined: Fri Feb 18, 2005 10:51 am

RE: AA Will Start Matching Any Non-stop Fare

Mon Oct 26, 2015 9:07 am

Quoting Airportugal310 (Reply 44):
Captain Self Righteous has arrived! Everyone stand up and clap!

   We read threads in much the same way, your comment made me laugh, because it's true. There are those who like to get excited & talk with blinded anticipation of our favorite airlines flying to our own favorite places & we enjoy talking about it.

Then there are those who take extreme relish in making sure they post a breaking thread first, or second guessing others opinions & views, with their own with their own endless supply of opinions & vague guesses that they pass off as fact, to try & prove a beleaguered point. .

This site is filled with those who don't have much more to contribute other than to disagree, argue or try & discredit others & their opinions. The ones who put a link to some departedflights page without any explanation of what we are supposed to be looking at.

People here act much like politicians, if someone dares disagree with those who think they own the site, because they have been here for so many years, but in reality, that demographic are the exact people I encounter most in petty spats over dumb stuiff here aon A.net.
707 717 720 727-1/2 737-1/2/3/4/5/6/7/8/9 747-1/2/3/4 757-2/3 767-2/3/4 777-2/3 DC8 DC9 MD80/2/7/8 D10-1/3/4 M11 L10-1/2/5 A300/310/320
AA AC AQ AS BA BD BN CO CS DL EA EZ HA HG HP KL KN MP MW NK NW OZ PA PS QX RC RH RW SA TG TW UA US VS WA WC WN WP YS 8M
 
User avatar
par13del
Posts: 10406
Joined: Sun Dec 18, 2005 9:14 pm

RE: AA Will Start Matching Any Non-stop Fare

Mon Oct 26, 2015 10:23 am

Quoting travelmanager (Reply 33):
The only way to stay competitive is to match the price of the ULCC with a product that doesn't end up giving a hefty mileage rebate, frequent flyer benefits, upgrades and lounge access on a ULCC type fare.

Or they could change their flight times to accommodate the pax using the other carrier. AA re-banked to better serve its connecting pax, since the ULCC for the most part do not have much connecting pax, their increase in numbers may be more OD.

So at a time when the airlines are raking in records profits and folks are saying that the market is finally paying a reasonable price for air travel, we see a potential return to the market share chasing?
Hmmmm, wonder if those folks who created the problems in the past are back.
 
winginit
Posts: 3051
Joined: Sat Feb 23, 2013 9:23 pm

RE: AA Will Start Matching Any Non-stop Fare

Mon Oct 26, 2015 11:55 am

Quoting enilria (Thread starter):
This is a big change and spells doom for NK and F9 I'd say

Care to elaborate on that? Doom as in you actually think a price matching policy will put them out of business?
 
GSPSPOT
Posts: 2556
Joined: Thu Sep 11, 2003 1:44 am

RE: AA Will Start Matching Any Non-stop Fare

Mon Oct 26, 2015 2:17 pm

Quoting FWAERJ (Reply 9):
AA could be on to something here. Of course, it won't affect me at FWA much as AA only competes on the ORD route with UA here, but the point is to defend market share among hub O&D pax.

I always thought that the legacies and ULCCs appealed to different subsets of the overall market. In other words, there appears to be plenty of room for both at a hub like DFW. I don't see where NK's growth at DFW (or WN's post-WA growth at DAL) have materially hurt AA.
Great Lakes, great life.
 
a380787
Posts: 4573
Joined: Tue Jul 09, 2013 4:38 pm

RE: AA Will Start Matching Any Non-stop Fare

Mon Oct 26, 2015 2:39 pm

Quoting GSPSPOT (Reply 49):
I don't see where NK's growth at DFW (or WN's post-WA growth at DAL) have materially hurt AA.

Q3'15 earnings, AAL reported -9.6% drop in mainline domestic yield while the equivalent figure at UAL is only -2.2% (DAL was very similar to UAL in that metric)

I would quantify that as material.

Popular Searches On Airliners.net

Top Photos of Last:   24 Hours  •  48 Hours  •  7 Days  •  30 Days  •  180 Days  •  365 Days  •  All Time

Military Aircraft Every type from fighters to helicopters from air forces around the globe

Classic Airliners Props and jets from the good old days

Flight Decks Views from inside the cockpit

Aircraft Cabins Passenger cabin shots showing seat arrangements as well as cargo aircraft interior

Cargo Aircraft Pictures of great freighter aircraft

Government Aircraft Aircraft flying government officials

Helicopters Our large helicopter section. Both military and civil versions

Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

Night Photos Beautiful shots taken while the sun is below the horizon

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos