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G500
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JB, DL, AA To Introduce "Last Class".

Wed Dec 16, 2015 12:34 am

The downward spiral continues for us who seat back in coach....... Jesus Christ this keeps getting and better


It’s called “last class.”

In case “coach” didn’t sound low-brow enough, airlines have come up with a new, unofficial seating category: “last class.”

There, passengers’ seats are unassigned and crowded closely together. The tickets are cheap, but they can’t be exchanged or refunded. And most extras, like baggage, come with a fee, according to USA Today.

Airlines including Delta ( DAL 1.93% ) , JetBlue ( JBLU 0.35% ) , and American Airlines ( AAL 1.98% ) have announced they would be selling the bare-bones tickets in order to compete with the growing popularity of budget airlines like Spirit ( SAVE 2.96% ) and Frontier.

http://fortune.com/2015/12/15/last-class-seats-airlines/?iid=sr-link1
 
commavia
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RE: JB, DL, AA To Introduce "Last Class".

Wed Dec 16, 2015 12:43 am

Quoting G500 (Thread starter):
The downward spiral continues for us who seat back in coach....... Jesus Christ this keeps getting and better

It’s called “last class.”

In case “coach” didn’t sound low-brow enough, airlines have come up with a new, unofficial seating category: “last class.”

  

Oh, great ... more media sensationalism about the airline industry. Just what we need.

Back here in reality, airlines are simply responding to what customers - or at least some subset of customers - have demonstrated with their purchasing behavior that they want. If someone isn't in that subset of customers, and doesn't want to pay a lower price for less amenities, then they don't have to. Nobody is forcing anyone to pay lower fares for these lower-amenity products, just as nobody is forcing anyone to fly on Spirit. Those that want to can, and those that don't want to can book differently.
 
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mayor
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RE: JB, DL, AA To Introduce "Last Class".

Wed Dec 16, 2015 1:12 am

Quoting G500 (Thread starter):

And this bothers you, why? As has been said, if you don't want the cheap seats, pay a little more for regular coach
"A committee is a group of the unprepared, appointed by the unwilling, to do the unnecessary"----Fred Allen
 
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Boeing778X
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RE: JB, DL, AA To Introduce "Last Class".

Wed Dec 16, 2015 1:25 am

Quoting commavia (Reply 1):
Oh, great ... more media sensationalism about the airline industry. Just what we need.

You said it   And to make matters worse, these are some pretty high profile guys! I'd understand if it were Spirit or something, but my gosh!

Will the cost be worth the trouble?    I doubt it!
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usairways85
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RE: JB, DL, AA To Introduce "Last Class".

Wed Dec 16, 2015 1:26 am

Eh, wasn't it discussed somewhere that DL didn't really lower fares that much but took away a ton of benefits from the bottom 3-5 fare classes.
 
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mayor
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RE: JB, DL, AA To Introduce "Last Class".

Wed Dec 16, 2015 1:28 am

How is this any different than the "Basic" economy fares that DL has instituted?
"A committee is a group of the unprepared, appointed by the unwilling, to do the unnecessary"----Fred Allen
 
Viscount724
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RE: JB, DL, AA To Introduce "Last Class".

Wed Dec 16, 2015 1:36 am

Quoting mayor (Reply 5):
How is this any different than the "Basic" economy fares that DL has instituted?

That's what the article is referring to. This is old news.
 
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compensateme
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RE: JB, DL, AA To Introduce "Last Class".

Wed Dec 16, 2015 1:57 am

Quoting commavia (Reply 1):
Oh, great ... more media sensationalism about the airline industry. Just what we need.

Back here in reality, airlines are simply responding to what customers - or at least some subset of customers - have demonstrated with their purchasing behavior that they want. If someone isn't in that subset of customers, and doesn't want to pay a lower price for less amenities, then they don't have to. Nobody is forcing anyone to pay lower fares for these lower-amenity products, just as nobody is forcing anyone to fly on Spirit. Those that want to can, and those that don't want to can book differently.

    Let's put the pom-poms down and join reality.

While DL's Economy Basic fares were initially introduced to compete with NK, they've evolved into a straight-discount ($10-$25 each way) off DL's regular fares. In other words... they're no longer competing with NK. Economy Basic is primarily a marketing tool designed to mask fare increases -- 'you can have our old fares, but only if you agree to these restrictions.'
We don’t care what your next flight is.
 
jb1087xna
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RE: JB, DL, AA To Introduce "Last Class".

Wed Dec 16, 2015 2:03 am

Quoting CompensateMe (Reply 7):
In other words... they're no longer competing with NK. Economy Basic is primarily a marketing tool designed to mask fare increases -- 'you can have our old fares, but only if you agree to these restrictions.'

That's been my experience. I was watching several different trips on DL before and after Economy Basic was introduced and when it happened, the "regular" fares were increased and the "basic" fares were what the "regular" ones had previously been.
I don't disagree with the hypothetical logic of offering something for the ULCC shopper/flier, but if you're just giving them the option of the old regular DL fare with less benefits, I don't know if that's really going after them.

[Edited 2015-12-15 18:05:01]
 
commavia
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RE: JB, DL, AA To Introduce "Last Class".

Wed Dec 16, 2015 2:11 am

Quoting CompensateMe (Reply 7):
Economy Basic is primarily a marketing tool designed to mask fare increases -- 'you can have our old fares, but only if you agree to these restrictions.'

So like I said - if you want to get more, pay more, and if you want to get less, pay less. Like all the endless whining about Spirit, I'm still not sure what the complaint is.
 
pipeafcr
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RE: JB, DL, AA To Introduce "Last Class".

Wed Dec 16, 2015 2:13 am

Isn't JetBlue a LCC already?
Felipe Carrillo
 
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compensateme
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RE: JB, DL, AA To Introduce "Last Class".

Wed Dec 16, 2015 2:20 am

Quoting commavia (Reply 9):
So like I said - if you want to get more, pay more, and if you want to get less, pay less. Like all the endless whining about Spirit, I'm still not sure what the complaint is.

It's concerning that the DOJ allowed AA-US to go through despite the fact that it's clear airlines are charging more and providing less, despite an environment yielding near-historic low inputs (inflation adjusted).
We don’t care what your next flight is.
 
N867DA
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RE: JB, DL, AA To Introduce "Last Class".

Wed Dec 16, 2015 2:25 am

The quality of air travel in America (and the world) will only get worse and worse. Pretty soon the only thing different between the legacy carriers and Frontier will be the fare. Remember, once upon a time AA, DL, and UA considered themselves full service airlines. Then legacy airlines. And now they're "network carriers".

Monetizing something that was free and costs airlines mere pennies like seat selection shows how low airlines will stoop to bring perceived value to their product. In the future, fliers with status will be pleased they can pick which uncomfortable seat they'll have, while ten years ago the idea of charging for the seat was ridiculous.
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mayor
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RE: JB, DL, AA To Introduce "Last Class".

Wed Dec 16, 2015 2:25 am

Quoting CompensateMe (Reply 11):
It's concerning that the DOJ allowed AA-US to go through despite the fact that it's clear airlines are charging more and providing less, despite an environment yielding near-historic low inputs (inflation adjusted).

Yeah, I'm concerned as well that airlines like DL are spending big chunks of money to provide "less" service.  
"A committee is a group of the unprepared, appointed by the unwilling, to do the unnecessary"----Fred Allen
 
commavia
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RE: JB, DL, AA To Introduce "Last Class".

Wed Dec 16, 2015 2:49 am

Quoting CompensateMe (Reply 11):
It's concerning that the DOJ allowed AA-US to go through despite the fact that it's clear airlines are charging more and providing less, despite an environment yielding near-historic low inputs (inflation adjusted).
Quoting N867DA (Reply 12):
The quality of air travel in America (and the world) will only get worse and worse.

  

This again? It's "clear" that carriers are "charging more and providing less." The "quality of air travel" will "only get worse and worse."

Not everyone thinks that way. I couldn't possibly disagree more. I think the quality of air travel only continues to improve with automation, self-service technology and fare unbundling allowing me to pay more for things I want and not pay for things I don't want.

Quoting N867DA (Reply 12):
Pretty soon the only thing different between the legacy carriers and Frontier will be the fare.

Yeah, that ... and the fact that Frontier doesn't fly to hundreds of cities large and small across the U.S. and the world.

As has been repeated over and over, not everyone values the price above all else. Some people place value on differentiation based on other things like global network access - an area where the legacy carriers and Frontier are most definitely different, and will be for the foreseeable future.

Quoting N867DA (Reply 12):
Monetizing something that was free and costs airlines mere pennies like seat selection shows how low airlines will stoop to bring perceived value to their product. In the future, fliers with status will be pleased they can pick which uncomfortable seat they'll have, while ten years ago the idea of charging for the seat was ridiculous.

But therein lies the key fallacy. It was never free. For a variety of historical, regulatory and competitive reasons - some within and some outside airlines' control - consumers were just conditioned to think it was free. Every single item that is now priced individually by some or most airlines has always had a very real cost to the airline and/or value to the consumer, and there is absolutely no reason why airlines shouldn't monetize this cost and/or value just like other companies in other industries do.
 
MIflyer12
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RE: JB, DL, AA To Introduce "Last Class".

Wed Dec 16, 2015 2:57 am

Quoting usairways85 (Reply 4):
Eh, wasn't it discussed somewhere that DL didn't really lower fares that much but took away a ton of benefits from the bottom 3-5 fare classes.

Nope. There's one fare bucket - E - for DL Basic Economy fares. This rollout and expansion is documented. It's been around for more than three years!

Look at the growth in ASMs of Allegiant and Spirit vs. DL, UA and AA over the last five years. Unbundled is a trend that can't be ignored. AC with Tango fares, too.
 
N867DA
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RE: JB, DL, AA To Introduce "Last Class".

Wed Dec 16, 2015 2:59 am

Quoting commavia (Reply 14):
Not everyone thinks that way. I couldn't possibly disagree more. I think the quality of air travel only continues to improve with automation, self-service technology and fare unbundling allowing me to pay more for things I want and not pay for things I don't want.

It isn't all bad. I enjoy the convenience of booking tickets to a city thousands of miles away from my phone, or checking in before getting to the airport. I enjoy being able to watch Modern Family while my seatmate watches nonstop romcoms. The overall experience though has fallen flat.

Quoting commavia (Reply 14):
But therein lies the key fallacy. It was never free. For a variety of historical, regulatory and competitive reasons - some within and some outside airlines' control - consumers were just conditioned to think it was free. Every single item that is now priced individually by some or most airlines has always had a very real cost to the airline and/or value to the consumer, and there is absolutely no reason why airlines shouldn't monetize this cost and/or value just like other companies in other industries do.

Your perspective is from someone inside the industry. Are you in favor of broadband ISP data caps? Are you comfortable with the idea of hotels hypothetically charging for pillows? Things that were once considered an essential part of traveling are now considered frills or extras. It costs money to bring a product to market, but unbundling integral parts of the product and reselling them for higher cost is not very well received. What airlines are doing is the equivalent of IKEA selling a table...and then charging for each leg. Some of it is simply responding to perceived consumer demands, but a lot of it just because regulations don't preclude it.
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LAX772LR
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RE: JB, DL, AA To Introduce "Last Class".

Wed Dec 16, 2015 3:11 am

Quoting commavia (Reply 9):
if you want to get more, pay more, and if you want to get less, pay less. Like all the endless whining about Spirit, I'm still not sure what the complaint is.

THIS.

There's a real easy way to avoid all this: pay more.

If you don't want to, then suck it up.
If you can't, then congratulations on learning the single greatest truth in life: you get what you pay for.

What's new about any of this?
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lutfi
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RE: JB, DL, AA To Introduce "Last Class".

Wed Dec 16, 2015 3:14 am

Quoting N867DA (Reply 12):
The quality of air travel in America (and the world) will only get worse and worse. Pretty soon the only thing different between the legacy carriers and Frontier will be the fare. Remember, once upon a time AA, DL, and UA considered themselves full service airlines. Then legacy airlines. And now they're "network carriers".

Not true. DL, AA have both introduced much better long haul business class seats that are a step change improvement on their old long haul business class seats.

Compare just about any airline's J class product now and ten years ago, and the improvement is remarkable.
 
DariusBieber
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RE: JB, DL, AA To Introduce "Last Class".

Wed Dec 16, 2015 3:22 am

I don't mind it. I just hope this last class doesn't "replace" economy class prices and economy prices just go up.

[Edited 2015-12-15 19:36:24]
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CV880
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RE: JB, DL, AA To Introduce "Last Class".

Wed Dec 16, 2015 3:50 am

[quote=DariusBieber,reply=19]
I don't mind it. I just hope this last class doesn't "replace" economy class prices and economy prices just go up.

Just another version of the "no frills" class that the majors had back in the 70's. They all wanted "free" upgrades to coach....what a joke it was.
 
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LAX772LR
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RE: JB, DL, AA To Introduce "Last Class".

Wed Dec 16, 2015 3:57 am

Quoting DariusBieber (Reply 19):
I just hope this last class doesn't "replace" economy class prices and economy prices just go up.

Regardless as to what they call it, or how they choose to market it, it will eventually *BE* economy class.

Everything else will just be a buy-up.
I myself, suspect a more prosaic motive... ~Thranduil
 
MSPNWA
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RE: JB, DL, AA To Introduce "Last Class".

Wed Dec 16, 2015 4:13 am

Quoting DariusBieber (Reply 19):
I just hope this last class doesn't "replace" economy class prices and economy prices just go up.

Too late. That's pretty much what's happened. These fares have been erroneously said to compete with the NKs of the world. They're not. Instead they're being used to devalue the lowest fares and create yet another up-sell opportunity. Boom. Profit.
 
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ua900
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RE: JB, DL, AA To Introduce "Last Class".

Wed Dec 16, 2015 4:57 am

Quoting G500 (Thread starter):
It’s called “last class.”

Um, no, it's called basic economy. It exists because people continue to vote with their feet and wallets for the likes of F9 and NK. In Europe there are separate planes for that on carriers like EW ex 4U in response to FR and U2. Move on folks, nothing to see there. Folks like me pay good money to never find out how that other half flies  
Quoting commavia (Reply 9):
So like I said - if you want to get more, pay more, and if you want to get less, pay less. Like all the endless whining about Spirit, I'm still not sure what the complaint is.

Exactly, you get what you pay for. Don't complain about being stuck in BOG for two days because a plane went tech and it takes NK 2-3 days to work off the backlog. Don't whine about baggage charges just because you didn't read the fine print on size restrictions. You asked for it.

Bundles are available for those who want them. They are called something like Delta One, Delta First, Comfort+, Medallion status on a Main Cabin ticket, etc. For everyone else, there are a dozen different add-on's, skinny bundles, standalones, a la carte BoB style choices. Nothing wrong with giving people a myriad of options at both ends of the product spectrum.
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lightsaber
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RE: JB, DL, AA To Introduce "Last Class".

Wed Dec 16, 2015 5:20 am

So if anyone charges too much, a new entrant will find the answer. All fares have gone up as airlines are almost making normal business profits.

These new fares aren't horrid. One still compares online. Just now it is all 'with fees' instead of someone sneaking in a fare without.

Quoting mayor (Reply 2):
And this bothers you, why? As has been said, if you don't want the cheap seats, pay a little more for regular coach

My thoughts. Airlines lost money for a long time. I don't mind them making money.

This is bringing online search engines more to a level ground.

Lightsaber
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airzona11
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RE: JB, DL, AA To Introduce "Last Class".

Wed Dec 16, 2015 7:03 am

The part that makes this hard to swallow is that when airlines trim and cut costs they are listening to market forces. Albeit when times are good and oil is cheap.

When labor costs are up and oil is high, they dodge the market forces with BK, taxpayer bailouts,etc.

Then again this is the problem when the government allows partial monopolies.

Oil has fallen, why are bag fees not removed? What about close-in aware fees? What about fuel surcharges? Everything that was added to as necessities during high fuel seem to be sticking around just fine.

The same people on A.net applaud United (for being like Delta and gasp...Southwest) for bringing back crackers and peanuts stating airlines should be moving up market while at the same time applauding the devaluing of Coach, stating it is market forces.

Above I am reading new airplanes, more automation, more efficiency, more self serve - this all makes travel better. Yes it does, but IT ALSO MAKES IT LESS EXPENSIVE. Each mile, each passenger = less cost. Fares should be going down.

Let me summarize: this is the race to the bottom
 
HAL
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RE: JB, DL, AA To Introduce "Last Class".

Wed Dec 16, 2015 7:14 am

Quoting airzona11 (Reply 25):
Oil has fallen, why are bag fees not removed? What about close-in aware fees? What about fuel surcharges? Everything that was added to as necessities during high fuel seem to be sticking around just fine.

Because the fares paid by the passengers don't cover the actual cost of operating the airline, even in this day of lower oil cost, plain and simple. It became a war between the carriers to have the 'lowest fares', driving revenue below expenses. To make up the difference without raising 'fares', the airlines had to do something, and presto: ancillary fees.

If the government forces airlines to end extra fees, watch fares skyrocket. But the total cost to the passenger would remain about the same.

HAL
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TWA772LR
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RE: JB, DL, AA To Introduce "Last Class".

Wed Dec 16, 2015 7:36 am

Quoting airzona11 (Reply 25):
they dodge the market forces with BK

Then hundreds of thousands of people will be jobless, thus making the economy worse. Almost every major US airline has gone through BK since 9/11. The only legacy that would be remaining if BK wasn't a saving grace would be CO. Then that would leave whom to pick up the slack? B6? WN? NK? Who's gonna fly those people across the globe from the US? No international carrier can handle that much traffic. BK has saved the lives of airlines and even employees who haven't taken their own because they don't want to try their hand in the job market or just loved their job and company so much.

Quoting airzona11 (Reply 25):
Oil has fallen, why are bag fees not removed? What about close-in aware fees? What about fuel surcharges?

Don't you like receiving free money? I sure do. Don't gotta be a business major to figure that one out.

Quoting airzona11 (Reply 25):
Above I am reading new airplanes, more automation, more efficiency, more self serve - this all makes travel better. Yes it does, but IT ALSO MAKES IT LESS EXPENSIVE. Each mile, each passenger = less cost. Fares should be going down.

A penny saved is a penny earned. Don't want to do the automated check-in stuff? There's a perfectly good agent at that counter a few feet away that gets paid to help you, with a smile on his/her face. I know, I've been that agent.
Also, those new planes and technologies have to be paid for somehow. You think Boeing and Airbus give planes away for free? Go check the going rate for a new A350 or 787. Also, all those employees gotta get paid too. And the background employees in tech-ops and HQ gotta get paid. And landing fees. And fly-over fees.

Airlines are businesses. They want to make money. They have to remain competitive to do so. Your "race to the bottom", is capitalism at its finest. If you don't want to fly coach, there's some pretty badass things happening up front in First and Business class. Flying is a privilege, not a right.
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OB1504
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RE: JB, DL, AA To Introduce "Last Class".

Wed Dec 16, 2015 7:49 am

Quoting lightsaber (Reply 24):
So if anyone charges too much, a new entrant will find the answer.

Which is what Spirit did, and Spirit and the other airlines discovered that for all the complaining people do about airlines, they're really only looking for the cheapest possible seat.

Quoting TWA772LR (Reply 27):
Airlines are businesses. They want to make money. They have to remain competitive to do so. Your "race to the bottom", is capitalism at its finest. If you don't want to fly coach, there's some pretty badass things happening up front in First and Business class. Flying is a privilege, not a right.

   No one's being forced to fly "last class" and the option to buy up to premium economy/business/first/private jet remains always available.

[Edited 2015-12-15 23:51:53]
 
N867DA
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RE: JB, DL, AA To Introduce "Last Class".

Wed Dec 16, 2015 8:26 am

Quoting TWA772LR (Reply 27):
Airlines are businesses. They want to make money. They have to remain competitive to do so. Your "race to the bottom", is capitalism at its finest. If you don't want to fly coach, there's some pretty badass things happening up front in First and Business class. Flying is a privilege, not a right.
Quoting TWA772LR (Reply 27):
BK has saved the lives of airlines and even employees who haven't taken their own because they don't want to try their hand in the job market or just loved their job and company so much.

When something goes against US carriers' wishes we're all Americans fighting to protect US aviation jobs. When times are great, then airlines are businesses in a capitalist system. I'm supposed to care about airlines and their employees when times are bad even though they're clearly willing to nickel and dime me whenever they possibly can? You know what else people don't have a right to? A job. Let airlines die and the market will take care of itself...or let them bring back the frills when times are good. They shouldn't be able to have it both ways.
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TWA772LR
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RE: JB, DL, AA To Introduce "Last Class".

Wed Dec 16, 2015 8:57 am

Quoting N867DA (Reply 29):
When something goes against US carriers' wishes we're all Americans fighting to protect US aviation jobs. When times are great, then airlines are businesses in a capitalist system. I'm supposed to care about airlines and their employees when times are bad even though they're clearly willing to nickel and dime me whenever they possibly can? You know what else people don't have a right to? A job. Let airlines die and the market will take care of itself...or let them bring back the frills when times are good. They shouldn't be able to have it both ways

Say that to Chase, Wells Fargo, Bank of America, GM, Ford, Chrysler, et al. You obviously haven't grown up in the industry like I have, dedicated my life to it, and studied it religiously. It's a fine balance. Were you calling for the collapse of the aforementioned companies? Imagine if all of the big players in an industry suddenly collapsed. This country would almost literally disintegrate. Look at Enron. Huge company. Fell hard. Died. The US economy was in shock. If all of the big banks, big 3 auto makers and big 3 airlines were to disappear at the same time (industry wise), the hit would be too big to the country as a whole. The term "too big to fail" is at play here because if they were to fail, then the country would too. That's why so much money is pumped into companies in Ch 11, and they want to make sure they don't return to that state, hence the extra fees.

Quoting N867DA (Reply 29):
You know what else people don't have a right to? A job

Let me hear you say that if you ever get furloughed.
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ahmetdouas
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RE: JB, DL, AA To Introduce "Last Class".

Wed Dec 16, 2015 9:13 am

Yeah British did this for the past 6 months or so, its called Hand Luggage only Fare on their Domestic and European Routes.
You cannot choose your seat. My trick is generally to board the plane last and sit wherever is empty in economy and no one bothers me. If the plane is 100% full, then i sit where i am assigned i guess = )
The other thing i do is i buy tickets with miles and cash most of the time due to my BA awards AMEX card, and the award tickets always allow you to choose your seat and carry one piece of luggage. So no problems for me there = )

Or I can always do Ryanair if i am very desperate and pay the 10 Euros each way to choose my seat = )
 
N867DA
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RE: JB, DL, AA To Introduce "Last Class".

Wed Dec 16, 2015 10:46 am

Quoting TWA772LR (Reply 30):
Let me hear you say that if you ever get furloughed.

Happened earlier this year. Doing better than ever now, thanks.

The point is that maybe these companies shouldn't be too big to fail in the first place. I'm singling out airlines specifically because this is a.net, but the problem is in many different sectors of the economy.
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Aquila3
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RE: JB, DL, AA To Introduce "Last Class".

Wed Dec 16, 2015 11:30 am

The race to the bottom. Plain and simple. The answer? Good LCCs like U4 and FR. More and more of us peones are choosing them, an less an less the "full service" carriers, that of full have only the price. There must be a reason. Let them fly business class only flights, I do not want to be their paying ballast.
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cathay747
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RE: JB, DL, AA To Introduce "Last Class".

Wed Dec 16, 2015 12:17 pm

Quoting G500 (Thread starter):
It’s called “last class.”

Why not just call these lowest-of-the-low fare
buckets "No Class" and be done with it? LOL

Quoting commavia (Reply 14):
Not everyone thinks that way. I couldn't possibly disagree more. I think the quality of air travel only continues to improve with automation, self-service technology and fare unbundling allowing me to pay more for things I want and not pay for things I don't want.

Agreed. I didn't use to think this way, but I do now.

Quoting commavia (Reply 14):
As has been repeated over and over, not everyone values the price above all else. Some people place value on differentiation based on other things like global network access - an area where the legacy carriers and Frontier are most definitely different, and will be for the foreseeable future.
Quoting commavia (Reply 14):
But therein lies the key fallacy. It was never free. For a variety of historical, regulatory and competitive reasons - some within and some outside airlines' control - consumers were just conditioned to think it was free. Every single item that is now priced individually by some or most airlines has always had a very real cost to the airline and/or value to the consumer, and there is absolutely no reason why airlines shouldn't monetize this cost and/or value just like other companies in other industries do.

Agreed and all quite true, again.

Quoting N867DA (Reply 16):
Things that were once considered an essential part of traveling are now considered frills or extras.

Not true...since when were things such as advance seat assignments
and FF miles "essential"?? Even checking a bag is not essential...not
everyone NEEDS to check a bag...some people are going on a very
short trip and can make do with a carry-on. If I am not, and I need to
check a bag, then I pay for that service, which as you may or may not
know is a very large cost to airlines...employee injuries alone (on the
job) caused by handling baggage is enormous...which they managed
to reduce somewhat by lowering max. allowed bag weight, although in
somewhat typical industry fashion, they didn't really explain to the public...
the industry is not good at communicating such things, so it winds up
with the appearance of "taking something else away" or another
cut in "service".

I think this was a main reason why the public (including me at first)
got so ticked-off about bag fees...it was the way the industry handled
it and rolled it out...it had the appearance of being a simple money-
grab. If instead (OK I'm being an arm-chair CEO here) they had taken
their existing fares and made them the "new" unbundled fare that didn't
include checked bags, and then rolled out "new" fares that were $25
higher that DID include checked bags, it would have been more
transparent...including for travel agents...so in the GDS you would have
seen something like (using hypothetical fare basis codes):

FBAG = $500
FNOBAG = $475
YBAG = $400
YNOBAG = $375
HE7NRBAG = $300
HE7NRNOBAG = $275

etc., etc., etc. Seems to me this would have been a better approach.
Only now, with the increased capabilities of the GDS' are airlines
starting to introduce "fare families" where they are creating fares
which are re-bundling some things into the fare such as one checked
bag, advance seat assignment, etc.

But alas, it is what it is. And as some have said above...if I can afford
to pay more for what I value, I will...if I can't, then I get what I CAN
afford and pay for and have no basis for complaint...just like if I were
buying a new car...can I afford to pay extra for non-essentials such as
a CD player, a GPS, and a sunroof? However much I might LIKE to
have those items, they are not essential and I'm not going to complain
to the dealer that they are charging extra for them.
Try a Little VC-10derness
 
commavia
Posts: 11489
Joined: Mon Apr 25, 2005 2:30 am

RE: JB, DL, AA To Introduce "Last Class".

Wed Dec 16, 2015 12:23 pm

Quoting N867DA (Reply 16):
Things that were once considered an essential part of traveling are now considered frills or extras.

"Essential" is highly subjective, and based on consumer conditioning. The world has changed, and the days of airlines destroying capital just so consumers can get for free the things they're conditioned to believe are "essential" are over. And as a passenger myself, I'm quite fine with that - I'd much prefer airlines actually earn a risk-appropriate return on their capital, and charge me a price commensurate with what the product/service they're providing is actually worth, and as such I'd also much prefer that they disaggregate at least some portions of said price so I don't have to pay for formerly-"essential" things I'll never use like checked bags.

Quoting airzona11 (Reply 25):
The part that makes this hard to swallow is that when airlines trim and cut costs they are listening to market forces. Albeit when times are good and oil is cheap.

When labor costs are up and oil is high, they dodge the market forces with BK, taxpayer bailouts,etc.

Airlines are always "listening to market forces," but in the post-9/11 period said market forces - including, but not limited to, competitive dynamics and union-driven labor costs and productivity - became so untenable that airlines were unable to "listen" and respond.

Quoting airzona11 (Reply 25):
Oil has fallen, why are bag fees not removed? What about close-in aware fees?

What about them? Bag fees and close-in award fees not only help airlines recover very real costs - the direct and indirect cost of handling checked bags, and the opportunity cost of holding back capacity until just before departure for award redemption - but beyond that, more importantly, both of those costs are attached to real value for passengers. Why should airlines not get some portion of that value?

Quoting airzona11 (Reply 25):
Above I am reading new airplanes, more automation, more efficiency, more self serve - this all makes travel better. Yes it does, but IT ALSO MAKES IT LESS EXPENSIVE. Each mile, each passenger = less cost. Fares should be going down.

Again, it's not all about cost. It's also about value. New aircraft, more automation, more self-service technology - each and every one of these things certainly has both an upfront and ongoing/recurring cost, but beyond that, all of these items generate real value for all or some subset of passengers, so why shouldn't airlines capture some of that value?

As has been said seemingly a million times - why are airlines so different? Other companies all over the world in just about every other industry acts, and prices their product, in this way every day. The fact that airlines are still - nearly four decades after "deregulation" - still held to a higher standard and harangued for acting this way, and the comments are still made about how certain allegedly-"essential" elements of air travel (for some people, but not all of us!) are, used to be, or should be, "free," further illustrates just how conditioned customers really were.

[Edited 2015-12-16 05:05:56]
 
vjzalb
Posts: 31
Joined: Wed Dec 11, 2013 12:37 am

RE: JB, DL, AA To Introduce "Last Class".

Wed Dec 16, 2015 12:46 pm

Companies have to evolve with the market sometimes to stay relevent and keep shareholders happy; thats the reality in any business.

While I haven't personally flown with the F9's or NK's of the world, I get the overwhelming sense they market to the leisure traveler (generalizing). Same can be said with the unbunblded fares of DL, AA etc. I also assume that many leisure travelers have bags, are traveling with familes and don't fully grasp that once they pay for their bag(s), entertainment in flight, snacks, a bottle of water, and so on, they are basically paying for a legacy carrier Y (or Y+) fare...bottom line, the marketing works for LCCs; the legacies need to keep up to compete. When I travel for business, our corporate travel agency prefers we choose "legacy-type" carriers due to unseen costs upfront, for anything other than a seat. In the end, if you want more legroom, or a checked bag, or some pretzels, is it really that different to pay for it upfront vs. along the way?
 
apfpilot
Posts: 742
Joined: Wed Jun 05, 2013 4:19 pm

RE: JB, DL, AA To Introduce "Last Class".

Wed Dec 16, 2015 1:37 pm

There is an interesting juxtaposition here between the cable industry and the airline industry. In cable almost everyone is clamoring for the unbundling of channels. People want the ability to only select the networks they want without having to have 15 home shopping networks to get ESPN. I would think the same would apply to the airline industry, but this thread shows that the same sentiment isn't shared by everyone. Personally, the majority of my flying is for business purposes. I don't check bags, and I have a company card to purchase a snack and drink to bring on the plane. I'd rather have a less expensive fare and not have those items included and be able to justify purchasing a better seat and the IFE through my spend.
Opinions are my own and do not reflect an endorsement or position of my employer.
 
ckfred
Posts: 5183
Joined: Wed Apr 25, 2001 12:50 pm

RE: JB, DL, AA To Introduce "Last Class".

Wed Dec 16, 2015 2:44 pm

Alfred Kahn, the father of deregulation, predicted that carriers would go down the path like hotels and automobile brands, with different levels of service for different fares.

I think he predicted that for coach (and presumably first class), you would have some airlines offering Cadillac service for expensive fares. A more moderate level of service and fares would be akin to Oldsmobile. The bare bones level of service, along with a low level of service, would be akin to Chevrolet (or perhaps the original VW Beetle, where carpeting was an option).

Whereas you see that in the hotel industry, with the major companies offering basic hotels like Fairfield and Hampton Inn to mid-level hotels like Courtyard and Holiday Inn to luxury hotels, like Waldorf-Astoria and Ritz-Carlton, you haven't seen that in the airline industry. It's basically no-frills coach, with cheaper fares for even fewer frills, and domestic first (which isn't as nice as it was 20 years ago).

I think part of the reason for how the airlines have behaved is simply people thinking, what's a few hours on a plane, versus several nights in a hotel.

I know people who will stay at horribly expensive hotels on vacation, while flying the cheapest fare to get to their destination.
 
Osubuckeyes
Posts: 1874
Joined: Mon Mar 01, 2004 10:05 am

RE: JB, DL, AA To Introduce "Last Class".

Wed Dec 16, 2015 2:46 pm

Quoting mayor (Reply 13):
DL are spending big chunks of money to provide "less" service.

Correct. Less legroom throughout coach, less benefits for frequent fliers, higher prices for the same product (C+ to W, Y to Y-).

Quoting commavia (Reply 14):
fare unbundling allowing me to pay more for things I want and not pay for things I don't want.

I agree with fare unbundling and it should absolutely be the way of the future for the air travel experience. NK and F9 have provided fantastic products in this respect. The only comparable product is measurably worse in DL's E fares. With E fares I get at best a 10% discount than prior to E fares existence. Additionally, I don't even have the option to buy up to any of the experiences that I might want to customize my trip. Further if you are a Medallion and take an E fare you forfeit all your benefits. The US3 seem to be creating 4-5 sections that they think they can efficiently fit people in to where NK and F9 have a truly unbundled product. In the past we have seen airlines struggle in trying to efficiently sell a whole bunch of different cabins, and trying to be too many things. We'll see what happens going forward.

Quoting commavia (Reply 35):
Airlines are always "listening to market forces,"

Always is a massive stretch. And by market forces do you mean investors, because consumers sure aren't driving change in the industry.

Quoting commavia (Reply 35):
As has been said seemingly a million times - why are airlines so different? Other companies all over the world in just about every other industry acts, and prices their product, in this way every day. The fact that airlines are still - nearly four decades after "deregulation" - still held to a higher standard and harangued for acting this way, and the comments are still made about how certain allegedly-"essential" elements of air travel (for some people, but not all of us!) are, used to be, or should be, "free," further illustrates just how conditioned customers really were.

The airlines aren't held to a higher standard. They just consistently fail to meet attainable standards compared to other industries. You speak of how great it is that airlines have introduced automation and other technology, but fail to recognize that most industries are way ahead in this. These same improvements in other industries leads to better products for better prices. It seems as though the airlines are the only companies actively charging more for the same/lessor of a product. Nothing seems to be changing in the marketplace, because guess what there is no real incentive to compete for passengers or adjust capacity. They will continue to run the same 90%+ LFs regardless of what passengers want, because they've created an environment where they are indifferent to (infinitely replacable) customers.

Quoting apfpilot (Reply 37):

You bring up a fantastic example. I would surmise though that cable companies moving towards unbundled products is actually against their most efficient business model. In that industry you are paying for a bundle to pay for more than you would otherwise pay for the package unbundled. I want ESPN so the cable company offers the Sports package charges more than they would otherwise even though there is a marginal cost to them providing 10 extra sports channels. Cable companies have had to respond to a huge shift in technology in the marketplace making their bundling archaic in the eyes of the consumer. Conversely the US3 airline industry is trying to market their bundles different ways instead of true unbundling a la NK and F9
 
apfpilot
Posts: 742
Joined: Wed Jun 05, 2013 4:19 pm

RE: JB, DL, AA To Introduce "Last Class".

Wed Dec 16, 2015 2:48 pm

Quoting ckfred (Reply 38):

I think part of the reason for how the airlines have behaved is simply people thinking, what's a few hours on a plane, versus several nights in a hotel.

I know people who will stay at horribly expensive hotels on vacation, while flying the cheapest fare to get to their destination.

Also everything that I have read is that when it comes to the ultimate decision to purchase consumers consistently rank fare as the most important element of the decision. The threshold is even very low for people flying on an airline that they claimed they would never fly again. If the market demanded otherwise the airlines would adjust accordingly.
Opinions are my own and do not reflect an endorsement or position of my employer.
 
Osubuckeyes
Posts: 1874
Joined: Mon Mar 01, 2004 10:05 am

RE: JB, DL, AA To Introduce "Last Class".

Wed Dec 16, 2015 2:48 pm

Quoting ckfred (Reply 38):
with the major companies offering basic hotels like Fairfield and Hampton Inn to mid-level hotels like Courtyard and Holiday Inn to luxury hotels, like Waldorf-Astoria and Ritz-Carlton, you haven't seen that in the airline industry

Ironically though, you get more in terms of product (wifi, breakfast etc...) at the basic level hotels than you do at the luxury hotels.
 
superjeff
Posts: 1371
Joined: Fri Feb 05, 2010 2:14 am

RE: JB, DL, AA To Introduce "Last Class".

Wed Dec 16, 2015 2:52 pm

Years ago (about 1969), Continental entered the U.S. Mainland-Hawaii market with a new "Economy" class fare, which was essentially coach without certain frills (mainly meal service). In the 1970's, National Airlines (the original one that later merged with Pan Am) had a "No Frills" fare on the East coast where they charged extra for soft drinks, and other "frills." Neither worked. Coach to Hawaii (priced nominally higher than Economy) essentially only added a meal, but people overwhelmingly paid the extra few dollars for the extra service and the 3rd class of service only lasted a relatively short time. Same thing to Puerto Rico where TransCaribbean had a "Thrift Class" service, which ultimately went away after their merger into American.

If the airlines offered a choice, it would be interesting to see what the "Coach/Economy" passenger would actually pay for. Not a Premium Economy on a 7 hour (or longer) international flight, but a normal coach (as in the old school days). Not everybody can justify J or F class on an international flight.

I don't have a problem with airfares covering expenses and an appropriate profit for the airlines. Bankruptcy isn't an option taken likely; many on this newsgroup apparently don't realize that the stakeholders (i.e., Shareholders) generally get wiped out even if the company successfully reorganizes (look at "those that went away: Braniff, the original Eastern, Pan Am, TWA, etc.) as well as those that reorganized and are still with us (i.e., American, Delta, United, for example). And their employees also have taken major hits.

I worked my way through college with the original Eastern as a ticket agent in the 1970's, and was paid $7.25 an hour. Today's ticket agents make not much more than that, even adjusting for inflation.
 
commavia
Posts: 11489
Joined: Mon Apr 25, 2005 2:30 am

RE: JB, DL, AA To Introduce "Last Class".

Wed Dec 16, 2015 3:02 pm

Quoting osubuckeyes (Reply 39):
consumers sure aren't driving change in the industry

I could not possibly disagree more. I think the pricing behavior we are seeing from airlines is a direct result of consumer behavior.

Quoting osubuckeyes (Reply 39):
They just consistently fail to meet attainable standards compared to other industries.

That may be true to an extent, but I'd say it's no more or less true than the fact that consumers - owing to decades of regulation, following by decades of hypercompetition conditioning pricing wholly detached from either cost or value - have extremely unrealistic expectations about what "attainable standards" should be for the price they're paying. From my perspective, all that's changed in the last 5-10 years is that the airlines have finally now reached an industry structure where they have the pricing power to actually price their product commensurate with cost and value, and a risk-appropriate rate of return, and thus consumers are finally - for the first time since deregulation - actually being exposed to what they should have been paying all along.

Quoting osubuckeyes (Reply 39):
You speak of how great it is that airlines have introduced automation and other technology, but fail to recognize that most industries are way ahead in this.

In some ways yes, and in some ways, no. In terms of technological developments like computerized reservations systems and yield/revenue management, the airline industry was way out ahead at the forefront - indeed, I would go so far as to say that one could arguably draw a straight line from SABRE to much of what today is considered commonplace eCommerce. In more recent times, that technological innovation slowed - no question about it. But again, is it not true that at least part of the reason why the airline industry's investments in technology and innovation slowed is precisely because they weren't making any money, and thus couldn't afford it? It is notable that now, when airlines are finally making risk-appropriate returns on capital, they are once again investing massively in things like not only automation and technology, but also aircraft, onboard and ground products and services, etc. The two are connected. Profits enable investment!
 
liftsifter
Posts: 495
Joined: Sun Feb 03, 2008 5:25 am

RE: JB, DL, AA To Introduce "Last Class".

Wed Dec 16, 2015 3:09 pm

Quoting CompensateMe (Reply 7):
'you can have our old fares, but only if you agree to these restrictions.'

And the worst part is that all the airlines are following suit in the name of "competition," AKA "we're rigging the system"

Quoting N867DA (Reply 12):
(and the world) will only get worse and worse.

If you said this in 2000, maybe I would have agreed. But there's a significant number of airlines in the Middle East and Asia who are revolutionizing the passenger experience on the ground and in the air. Having worked for a ME3 carrier, I know that in all cases, the pax experience is more important than cost to SOME airlines these days.

Quoting commavia (Reply 14):
Not everyone thinks that way. I couldn't possibly disagree more. I think the quality of air travel only continues to improve with automation, self-service technology and fare unbundling allowing me to pay more for things I want and not pay for things I don't want.

Then you're simply buying into their BS. For example, when B6 removed free checked bags, they didn't lower the bottom tier fare by ~$25. The fares remained the same, with luggage being tacked on. If this was truly the epitome of the free-market and everything was rainbows and smiles, that fare should have come down by at least $20. The airlines are removing features which are fundamental to flying today in order to drive fares up.

Just wait and see, fuel prices are low now, yet fares haven't budged. The moment the oil price returns or at least increases significantly, suddenly fares will need to be raised in order to maintain the bottom line. These practices are not only anti-consumer, they also create pockets of economic recession amongst their employees and those requiring their services.

The DOJ needs to get on these practices QUICK, before we're bailing out Chicago/Dallas/Atlanta again.
A300 A310 A319 A320 A321 A332 A333 A342 A343 A346 A380 B736 B737 B738 B744 B763 B77L B77E B77W B788 E190
 
Osubuckeyes
Posts: 1874
Joined: Mon Mar 01, 2004 10:05 am

RE: JB, DL, AA To Introduce "Last Class".

Wed Dec 16, 2015 3:13 pm

Quoting commavia (Reply 43):
pricing power to actually price their product commensurate with cost and value

If they have pricing power how are consumers driving change in the industry? Airlines are now able to control capacity and pricing at will a la cartels with little to no repercussions. With LFs hanging in the 90% levels there is no reason that airlines should be capping capacity other than to artificially prop up their margins due to a cartel environment.

Quoting commavia (Reply 43):
is it not true that at least part of the reason why the airline industry's investments in technology and innovation slowed is precisely because they weren't making any money, and thus couldn't afford it?

Most of the innovation and technical progression that the airlines have implemented was in the mid to late 2000s. They weren't exactly rolling in dough. Lately it seems that technological improvements have been designed specifically to extract more revenue. I would also argue that airlines in line with other service industries have intentionally combated price transparency to extract value.

Quoting commavia (Reply 43):
Profits enable investment!

There was no shortage of massive capital investment in aircraft in the decades prior.
 
commavia
Posts: 11489
Joined: Mon Apr 25, 2005 2:30 am

RE: JB, DL, AA To Introduce "Last Class".

Wed Dec 16, 2015 3:39 pm

Quoting osubuckeyes (Reply 45):
If they have pricing power how are consumers driving change in the industry?

Because consumers have communicated that they value a wide range of variously-priced products from which to choose, and airlines are delivering just that.

Quoting osubuckeyes (Reply 45):
Airlines are now able to control capacity and pricing at will

Really? Each individual airline can certainly control its own capacity, but airlines can "control ... pricing at will?" I can only say that, again, I could not possibly disagree more.

Quoting osubuckeyes (Reply 45):
a la cartels

I continue to eagerly await the slightest shred of proof - by regulators, lawyers, anybody - that airlines are actually acting, colluding, as illegal cartels.

Quoting osubuckeyes (Reply 45):
With LFs hanging in the 90% levels there is no reason that airlines should be capping capacity other than to artificially prop up their margins due to a cartel environment.

No reason other than ... economics.

Quoting osubuckeyes (Reply 45):
Most of the innovation and technical progression that the airlines have implemented was in the mid to late 2000s.

Once again, I completely disagree.

Quoting osubuckeyes (Reply 45):
Lately it seems that technological improvements have been designed specifically to extract more revenue.

Well I should hope so! Airlines aren't charities - they exist, like all businesses in a capitalist market economy, to make money. So if airlines are making investments in anything - aircraft, "technological improvements," whatever - that aren't designed to enhance profit by either increasing revenue or decreasing cost, why on earth else would they be doing it?

Quoting osubuckeyes (Reply 45):
There was no shortage of massive capital investment in aircraft in the decades prior.

And there was also no shortage of bankruptcies and liquidations.
 
Osubuckeyes
Posts: 1874
Joined: Mon Mar 01, 2004 10:05 am

RE: JB, DL, AA To Introduce "Last Class".

Wed Dec 16, 2015 4:14 pm

Quoting commavia (Reply 46):
No reason other than ... economics.

So economics is the reason that airlines are unwilling to expand capacity to meet demand? Don't say they've met demand, because with 90% LF there certainly could be a large portion of capacity being crowded out. They've met demand with their target margins, which are increasing. Not necessarily good for the marketplace.

Quoting commavia (Reply 46):
Once again, I completely disagree

Most self service kiosks and the elimination of much of the check in staff came between 2005-2007. OTAs and online booking/profiles/controls came more or less the same time frame. Smart phone apps came around 2010-2011. Most of that came during times of little or no profitability.

Quoting commavia (Reply 46):
why on earth else would they be doing it?

There is a difference between customer friendly improvements and "improvements" specifically designed to make the customer pay more. There also can be improvements that do both yet lately they have been pretty much exclusively tailored to extract more $.

Quoting commavia (Reply 46):
And there was also no shortage of bankruptcies and liquidations.

Right so your argument that profitability=capital investment is wrong, because companies will invest in capital anyway... Should they, no... But they do, did, and will likely do so in the future.
 
bkflyguy
Posts: 232
Joined: Wed Dec 05, 2012 6:25 pm

RE: JB, DL, AA To Introduce "Last Class".

Wed Dec 16, 2015 4:27 pm

How dare the airlines do this???? I, as an American with an overly-inflated sense of entitlement that matches my over-expanded waistline, have the god-given right to buy a ticket on any airline, sit in a seat that is 40 inches wide and converts into a bed, on a plane that is only 1/3 full, while checking 17 bags and carrying on 3, be served a seven course gourmet meal at any time of the day, by flight attendants who provide white glove service, on a plane that is no more than 5 years old, and fly to any city in the country, or the world, for no more than $50 dollars.

Any airline not providing the above is a heartless terrible excuse of a company and is clearly making me pay more for less service because of their own sadistic sense of humor.
 
commavia
Posts: 11489
Joined: Mon Apr 25, 2005 2:30 am

RE: JB, DL, AA To Introduce "Last Class".

Wed Dec 16, 2015 4:29 pm

Quoting osubuckeyes (Reply 47):
So economics is the reason that airlines are unwilling to expand capacity to meet demand?

Absolutely yes. If the incremental revenue generated for an individual airline by adding another, marginal seat to the market does not cover the cost and commensurate return of adding that seat, why should the airline add it?

Quoting osubuckeyes (Reply 47):
They've met demand with their target margins, which are increasing. Not necessarily good for the marketplace.

Well, as has been repeated over and over, it all depends on how one defines "the marketplace." If, as seems to be the case with many around here, "the marketplace" is narrowly defined as "customers," then sure, of course all else equal the cheaper the price the better. I prefer to define "the marketplace" more holistically - to include both employees and shareholders/owners. And when viewed from that perspective, airlines are - in general - behaving exceedingly economically rationally, not only finally creating (as opposed to destroying) value, but distributing said value in a more balanced way among customers, employees and shareholders/owners, whereas up until virtually none of the value created by an airline accrued to employees or shareholders/owners.

Quoting osubuckeyes (Reply 47):
There is a difference between customer friendly improvements and "improvements" specifically designed to make the customer pay more. There also can be improvements that do both yet lately they have been pretty much exclusively tailored to extract more $.

I can only just respond by saying - yet again - that airlines, like all companies, should only be doing things that increase profit, either by increasing revenue or decreasing cost. As responsible stewards of shareholders' capital, that is exactly what they're supposed to do - just like every other business on the face of the earth.

Quoting osubuckeyes (Reply 47):
Right so your argument that profitability=capital investment is wrong

No it's not.

Profitably enables capital investment.

In the short-run, companies can make capital investments absent profitability using debt or other alternative financing methods, but over the long-run, profitability - and the operating cash flow it generates - is required to make immediate capital investments and/or service the debt assumed in the lean years to finance past capital investments. When that cycle gets out of whack, and profitability/cash is insufficient (or nonexistent) to cover investments and debt, and generate a risk-appropriate rate of return for investors, that's when bankruptcy happens.

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