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SeaDoo
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Alaska starts Saver Fares

Tue Nov 20, 2018 11:09 am

Alaska appears to have started saver fares with no seat assignments or limited seat assignments before the gate and possibly other restrictions.

https://www.alaskaair.com/content/deals ... viewOffers

The savings are somewhat significant, but unfortunately, in my opinion, this is another slide towards a less desirable experience.
 
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enilria
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Re: Alaska starts Saver Fares

Tue Nov 20, 2018 12:46 pm

Sounds like Basic Economy and they had to do it. Particularly in California they can’t allow the legacies to have a lower price point than they do.
 
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SteveXC500
Posts: 600
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Re: Alaska starts Saver Fares

Tue Nov 20, 2018 1:29 pm

Definitely the market at work here. If a consumer wishes to simply save money and not care about the seat or experience, then the airlines have a market. Clearly, it's working for them.
 
dbo861
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Re: Alaska starts Saver Fares

Tue Nov 20, 2018 1:37 pm

enilria wrote:
Sounds like Basic Economy and they had to do it. Particularly in California they can’t allow the legacies to have a lower price point than they do.


You say they had to do it, but WN does pretty well sans Basic Economy. What’s so different about WN that they can get away without while all the other airlines have to follow suit?
 
ei a330-200
Posts: 353
Joined: Thu Apr 05, 2001 8:22 am

Re: Alaska starts Saver Fares

Tue Nov 20, 2018 1:49 pm

dbo861 wrote:
enilria wrote:
Sounds like Basic Economy and they had to do it. Particularly in California they can’t allow the legacies to have a lower price point than they do.


You say they had to do it, but WN does pretty well sans Basic Economy. What’s so different about WN that they can get away without while all the other airlines have to follow suit?


I think one of the main reasons is that WN doesn't appear in booking engines, so if you want to price compare, it involves using several websites, rather than a simple sort by price. Also, given they already lack assigned seating, what would they do? Assign everyone in a super saver fare class Boarding Group C?
 
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enilria
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Joined: Fri Feb 22, 2008 7:15 pm

Re: Alaska starts Saver Fares

Tue Nov 20, 2018 2:05 pm

dbo861 wrote:
enilria wrote:
Sounds like Basic Economy and they had to do it. Particularly in California they can’t allow the legacies to have a lower price point than they do.


You say they had to do it, but WN does pretty well sans Basic Economy. What’s so different about WN that they can get away without while all the other airlines have to follow suit?

Actually, WN has withdrawn from quite a few East markets where they face a ULCC and a legacy in the same market. Obviously there are markets where WN is king and they can pretty much do whatever they want. That's why I said California for Alaska. They are not king in California. They can't ask people to pay "more", or at least that is how it appears in Expedia, etc.
ei a330-200 wrote:
dbo861 wrote:
enilria wrote:
Sounds like Basic Economy and they had to do it. Particularly in California they can’t allow the legacies to have a lower price point than they do.


You say they had to do it, but WN does pretty well sans Basic Economy. What’s so different about WN that they can get away without while all the other airlines have to follow suit?


I think one of the main reasons is that WN doesn't appear in booking engines, so if you want to price compare, it involves using several websites, rather than a simple sort by price. Also, given they already lack assigned seating, what would they do? Assign everyone in a super saver fare class Boarding Group C?

That's part of it. WN has no worry of appearing to be undercut on expedia.
 
cledaybuck
Posts: 1740
Joined: Thu Aug 18, 2016 6:07 pm

Re: Alaska starts Saver Fares

Tue Nov 20, 2018 2:11 pm

ei a330-200 wrote:
dbo861 wrote:
enilria wrote:
Sounds like Basic Economy and they had to do it. Particularly in California they can’t allow the legacies to have a lower price point than they do.


You say they had to do it, but WN does pretty well sans Basic Economy. What’s so different about WN that they can get away without while all the other airlines have to follow suit?


I think one of the main reasons is that WN doesn't appear in booking engines, so if you want to price compare, it involves using several websites, rather than a simple sort by price. Also, given they already lack assigned seating, what would they do? Assign everyone in a super saver fare class Boarding Group C?
Not to give them any ideas, but there are plenty of things they could do. There could be a fare class that doesn't include checked bags (or carry on bags). They could certainly create a fare class that automatically starts at group B or C or even create a group D.
As we celebrate mediocrity, all the boys upstairs want to see, how much you'll pay for what you used to get for free.
 
cledaybuck
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Joined: Thu Aug 18, 2016 6:07 pm

Re: Alaska starts Saver Fares

Tue Nov 20, 2018 2:17 pm

enilria wrote:
dbo861 wrote:
enilria wrote:
Sounds like Basic Economy and they had to do it. Particularly in California they can’t allow the legacies to have a lower price point than they do.


You say they had to do it, but WN does pretty well sans Basic Economy. What’s so different about WN that they can get away without while all the other airlines have to follow suit?

Actually, WN has withdrawn from quite a few East markets where they face a ULCC and a legacy in the same market. Obviously there are markets where WN is king and they can pretty much do whatever they want. That's why I said California for Alaska. They are not king in California. They can't ask people to pay "more", or at least that is how it appears in Expedia, etc.
ei a330-200 wrote:
dbo861 wrote:

You say they had to do it, but WN does pretty well sans Basic Economy. What’s so different about WN that they can get away without while all the other airlines have to follow suit?


I think one of the main reasons is that WN doesn't appear in booking engines, so if you want to price compare, it involves using several websites, rather than a simple sort by price. Also, given they already lack assigned seating, what would they do? Assign everyone in a super saver fare class Boarding Group C?

That's part of it. WN has no worry of appearing to be undercut on expedia.
I doubt AS was priced any higher. They were probably priced the same but you got more for your money. Almost all of these basic economy fares are backdoor fare increases.

As for WN, is there really a significant portion of the flying public that doesn't know to check WN, especially in a place like California? Google flights will even show you that a WN flight exists, just not the price.
As we celebrate mediocrity, all the boys upstairs want to see, how much you'll pay for what you used to get for free.
 
LAXBUR
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Re: Alaska starts Saver Fares

Tue Nov 20, 2018 2:48 pm

My anecdotal experience is that there’s a pretty large group of people that never check anyone else but Southwest for domestic travel. Most assume WN will always be the least expensive, and the remainder are taking advantage of Southwest’s lack of change fees. I have a couple friends from my hometown that also live in LA that always act surprised I’m on a nonstop. Because Southwest doesn’t have one, they assumed no one had one.
 
RamblinMan
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Re: Alaska starts Saver Fares

Tue Nov 20, 2018 3:09 pm

cledaybuck wrote:
As for WN, is there really a significant portion of the flying public that doesn't know to check WN, especially in a place like California? Google flights will even show you that a WN flight exists, just not the price.


More like a significant portion of the flying public that doesn't check anyone else. Southwest has a customer base which either thinks the cheapest tickets are always on WN, or realizes this isn't always the case but exclusively flies them anyway because they won't be nickel-and-dimed for baggage, seats, etc.

My parents are among this group. They want to fly somewhere, they go to southwest.com and buy tickets. If they want to go somewhere WN doesn't fly, they usually end up calling me as they don't really know where else to buy tickets.
 
LAXBUR
Posts: 412
Joined: Wed Jun 27, 2018 1:05 pm

Re: Alaska starts Saver Fares

Tue Nov 20, 2018 3:17 pm

SeaDoo wrote:
Alaska appears to have started saver fares with no seat assignments or limited seat assignments before the gate and possibly other restrictions.

https://www.alaskaair.com/content/deals ... viewOffers

The savings are somewhat significant, but unfortunately, in my opinion, this is another slide towards a less desirable experience.


Unfortunately, these aren’t savings. They’re simply matching pricing by competitors. For instance, I fly LAX-LAS fairly often. Fares are as low as $41 most of the time. While I have not seen these fares go live yet even based on this ad, the experience/options I normally get for $41 each way may be as much as $30 more each way according to the link. That’s pretty significant for a short flight.

Obviously their bean counters think this was the smart move. Competing against WN is hard since their fare rules are so much more lax and they have a quasi captured market. I personally don’t know that making an even more restrictive fare will help against WN in California. But with this move I suppose they may just be focusing on capturing market share from the others in CA to be a strong number two rather than eroding WNs share.
 
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enilria
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Re: Alaska starts Saver Fares

Tue Nov 20, 2018 3:18 pm

cledaybuck wrote:
I doubt AS was priced any higher. They were probably priced the same but you got more for your money. Almost all of these basic economy fares are backdoor fare increases.

You're not seeing it. That's the same problem. Very few people actually travel on these Basic Economy fares, it's a gateway drug to get you in the door and then sell you up with a fee for a seat or a fee for bags. So AS has two choices 1) take a premium which is death because people *think* that it makes no sense to pay more for AS/B6/etc over a legacy except maybe in markets where AS/B6 have a lot of loyalty. It's really the same for WN, but by not being in the OTAs they make the comparison harder 2) match the Basic Economy price without having the opportunity to sell up for seat assignment, carry on bags, whatever. Either scenario means they are in a bad situation competitively and potentially losing money.

I disagree Basic Economy is a back door fare increase in all cases. B6 and DL are in a market.

Scenario 1 - Before Basic Economy
Lowest Fares
B6 $350RT
DL $350RT
DL matches B6's fares. Each carrier has advantages. B6 is probably more comfortable seat. DL is seen as the bigger brand. B6 probably does well in its strength points. DL does well in theirs. Detente.

Scenario 2 - After Basic Economy
Lowest Fares
DL $325RT Basic Economy, but averages $370 with sell-up (this was a backdoor fare increase)
B6 $325RT Matches DL's Basic Economy price, loses $25/ticket vs before, but may sell more because their product is clearly better

Scenario 3 - Armageddon
NK enters market
NK $138RT
DL $228RT Basic Economy, but averages $285 with sell-up
B6 is shafted. If they offer their full product at $228 they will lose their shirt. If they keep selling at more than $228 they will lose all their demand to DL and NK.
 
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EA CO AS
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Re: Alaska starts Saver Fares

Tue Nov 20, 2018 3:58 pm

cledaybuck wrote:
I doubt AS was priced any higher. They were probably priced the same but you got more for your money.


True. Compared side-by-side to other carriers, AS was priced the same for the main cabin as other carriers' "basic economy" or equivalent, with no opportunity for customers to buy up to an experience with more frills, whereas the competitors had the same fare but also offered a buy-up option for a better experience for not much more money, in most cases.

AS was missing out on that buy-up option, which many travelers choose, resulting in the same net effect as a fare increase without stifling overall demand in the process.

And since about 70% of travelers already in an airline's website booking path will continue to either their "basic economy" equivalent or buy up to a more expensive fare, AS was losing those price-sensitive, brand-agnostic customers who found the no-frills price on the competition. Based on these factors, AS felt it made sense to offer the "Saver Fare" option to customers, with the option to buy-up to main cabin for a reasonable difference. The estimate is this will add about $100M annually to the bottom line.
"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan

Comments made here are my own and are not intended to represent the official position of Alaska Air Group
 
hiflyeras
Posts: 2281
Joined: Thu Jul 14, 2011 6:48 pm

Re: Alaska starts Saver Fares

Tue Nov 20, 2018 4:22 pm

LAXBUR wrote:
My anecdotal experience is that there’s a pretty large group of people that never check anyone else but Southwest for domestic travel. Most assume WN will always be the least expensive, and the remainder are taking advantage of Southwest’s lack of change fees. I have a couple friends from my hometown that also live in LA that always act surprised I’m on a nonstop. Because Southwest doesn’t have one, they assumed no one had one.


Some of my family flew SEA-SAN a couple of weeks ago. I'd texted them to see if they made it to SAN okay....they replied 'oh, we're in OAK. One more flight to go!' I was like WTF? Did you know that there are like 10 non-stop flights a day to SAN on AS? They took WN because it was supposedly 'cheaper' but they paid to move up their boarding priority so they could all sit together. <smacking head>
 
cledaybuck
Posts: 1740
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Re: Alaska starts Saver Fares

Tue Nov 20, 2018 4:35 pm

enilria wrote:
cledaybuck wrote:
I doubt AS was priced any higher. They were probably priced the same but you got more for your money. Almost all of these basic economy fares are backdoor fare increases.

You're not seeing it. That's the same problem. Very few people actually travel on these Basic Economy fares, it's a gateway drug to get you in the door and then sell you up with a fee for a seat or a fee for bags. So AS has two choices 1) take a premium which is death because people *think* that it makes no sense to pay more for AS/B6/etc over a legacy except maybe in markets where AS/B6 have a lot of loyalty. It's really the same for WN, but by not being in the OTAs they make the comparison harder 2) match the Basic Economy price without having the opportunity to sell up for seat assignment, carry on bags, whatever. Either scenario means they are in a bad situation competitively and potentially losing money.

I disagree Basic Economy is a back door fare increase in all cases. B6 and DL are in a market.

Scenario 1 - Before Basic Economy
Lowest Fares
B6 $350RT
DL $350RT
DL matches B6's fares. Each carrier has advantages. B6 is probably more comfortable seat. DL is seen as the bigger brand. B6 probably does well in its strength points. DL does well in theirs. Detente.

Scenario 2 - After Basic Economy
Lowest Fares
DL $325RT Basic Economy, but averages $370 with sell-up (this was a backdoor fare increase)
B6 $325RT Matches DL's Basic Economy price, loses $25/ticket vs before, but may sell more because their product is clearly better

Scenario 3 - Armageddon
NK enters market
NK $138RT
DL $228RT Basic Economy, but averages $285 with sell-up
B6 is shafted. If they offer their full product at $228 they will lose their shirt. If they keep selling at more than $228 they will lose all their demand to DL and NK.
I get what you are saying for scenario three, but scenario two the cost was most often still $350.
As we celebrate mediocrity, all the boys upstairs want to see, how much you'll pay for what you used to get for free.
 
cledaybuck
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Joined: Thu Aug 18, 2016 6:07 pm

Re: Alaska starts Saver Fares

Tue Nov 20, 2018 4:43 pm

EA CO AS wrote:
cledaybuck wrote:
I doubt AS was priced any higher. They were probably priced the same but you got more for your money.


True. Compared side-by-side to other carriers, AS was priced the same for the main cabin as other carriers' "basic economy" or equivalent, with no opportunity for customers to buy up to an experience with more frills, whereas the competitors had the same fare but also offered a buy-up option for a better experience for not much more money, in most cases.

AS was missing out on that buy-up option, which many travelers choose, resulting in the same net effect as a fare increase without stifling overall demand in the process.

And since about 70% of travelers already in an airline's website booking path will continue to either their "basic economy" equivalent or buy up to a more expensive fare, AS was losing those price-sensitive, brand-agnostic customers who found the no-frills price on the competition. Based on these factors, AS felt it made sense to offer the "Saver Fare" option to customers, with the option to buy-up to main cabin for a reasonable difference. The estimate is this will add about $100M annually to the bottom line.
I don't think this is really aimed at the price-sensitive, brand-agnostic customers. What is going to cause them to buy up? Most of the things being taken away they won't be using anyway. Most families just want to sit together, and it appear Alaska will still allow seat selection toward the back of the plane. I think you will get more buy up from elite members who have much more to lose with a saver fare.
As we celebrate mediocrity, all the boys upstairs want to see, how much you'll pay for what you used to get for free.
 
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enilria
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Joined: Fri Feb 22, 2008 7:15 pm

Re: Alaska starts Saver Fares

Tue Nov 20, 2018 4:46 pm

cledaybuck wrote:
enilria wrote:
cledaybuck wrote:
I doubt AS was priced any higher. They were probably priced the same but you got more for your money. Almost all of these basic economy fares are backdoor fare increases.

You're not seeing it. That's the same problem. Very few people actually travel on these Basic Economy fares, it's a gateway drug to get you in the door and then sell you up with a fee for a seat or a fee for bags. So AS has two choices 1) take a premium which is death because people *think* that it makes no sense to pay more for AS/B6/etc over a legacy except maybe in markets where AS/B6 have a lot of loyalty. It's really the same for WN, but by not being in the OTAs they make the comparison harder 2) match the Basic Economy price without having the opportunity to sell up for seat assignment, carry on bags, whatever. Either scenario means they are in a bad situation competitively and potentially losing money.

I disagree Basic Economy is a back door fare increase in all cases. B6 and DL are in a market.

Scenario 1 - Before Basic Economy
Lowest Fares
B6 $350RT
DL $350RT
DL matches B6's fares. Each carrier has advantages. B6 is probably more comfortable seat. DL is seen as the bigger brand. B6 probably does well in its strength points. DL does well in theirs. Detente.

Scenario 2 - After Basic Economy
Lowest Fares
DL $325RT Basic Economy, but averages $370 with sell-up (this was a backdoor fare increase)
B6 $325RT Matches DL's Basic Economy price, loses $25/ticket vs before, but may sell more because their product is clearly better

Scenario 3 - Armageddon
NK enters market
NK $138RT
DL $228RT Basic Economy, but averages $285 with sell-up
B6 is shafted. If they offer their full product at $228 they will lose their shirt. If they keep selling at more than $228 they will lose all their demand to DL and NK.
I get what you are saying for scenario three, but scenario two the cost was most often still $350.

I said it's not a backdoor fare increase "in all cases". Certainly there are cases where it is.

BTW, another interesting phenomena is that when people get a lower price on the base fare they are more likely to "splurge" on add-ons because they feel like treating themselves for saving money. This is why the sell-up amount actually tends to increase the lower the fare goes.
Last edited by enilria on Tue Nov 20, 2018 4:49 pm, edited 1 time in total.
 
cledaybuck
Posts: 1740
Joined: Thu Aug 18, 2016 6:07 pm

Re: Alaska starts Saver Fares

Tue Nov 20, 2018 4:48 pm

enilria wrote:
cledaybuck wrote:
enilria wrote:
You're not seeing it. That's the same problem. Very few people actually travel on these Basic Economy fares, it's a gateway drug to get you in the door and then sell you up with a fee for a seat or a fee for bags. So AS has two choices 1) take a premium which is death because people *think* that it makes no sense to pay more for AS/B6/etc over a legacy except maybe in markets where AS/B6 have a lot of loyalty. It's really the same for WN, but by not being in the OTAs they make the comparison harder 2) match the Basic Economy price without having the opportunity to sell up for seat assignment, carry on bags, whatever. Either scenario means they are in a bad situation competitively and potentially losing money.

I disagree Basic Economy is a back door fare increase in all cases. B6 and DL are in a market.

Scenario 1 - Before Basic Economy
Lowest Fares
B6 $350RT
DL $350RT
DL matches B6's fares. Each carrier has advantages. B6 is probably more comfortable seat. DL is seen as the bigger brand. B6 probably does well in its strength points. DL does well in theirs. Detente.

Scenario 2 - After Basic Economy
Lowest Fares
DL $325RT Basic Economy, but averages $370 with sell-up (this was a backdoor fare increase)
B6 $325RT Matches DL's Basic Economy price, loses $25/ticket vs before, but may sell more because their product is clearly better

Scenario 3 - Armageddon
NK enters market
NK $138RT
DL $228RT Basic Economy, but averages $285 with sell-up
B6 is shafted. If they offer their full product at $228 they will lose their shirt. If they keep selling at more than $228 they will lose all their demand to DL and NK.
I get what you are saying for scenario three, but scenario two the cost was most often still $350.

I said it's not a backdoor fare increase "in all cases". Certainly there are cases where it is.
Fair enough.
As we celebrate mediocrity, all the boys upstairs want to see, how much you'll pay for what you used to get for free.
 
chrisair
Posts: 2163
Joined: Fri Sep 01, 2000 11:32 pm

Re: Alaska starts Saver Fares

Tue Nov 20, 2018 5:36 pm

EA CO AS wrote:
AS was missing out on that buy-up option, which many travelers choose, resulting in the same net effect as a fare increase without stifling overall demand in the process.


At least someone from AS, no matter how unofficial you are ( :lol: ), has acknowledged that this is nothing more than a money grab.
 
Tack
Posts: 130
Joined: Thu Oct 04, 2018 11:13 pm

Re: Alaska starts Saver Fares

Wed Nov 21, 2018 7:12 am

chrisair wrote:
EA CO AS wrote:
AS was missing out on that buy-up option, which many travelers choose, resulting in the same net effect as a fare increase without stifling overall demand in the process.


At least someone from AS, no matter how unofficial you are ( :lol: ), has acknowledged that this is nothing more than a money grab.


Of course it was a ‘money grab’. I’m self employed, everything I do at work is a ‘money grab’. From raising my prices if the demand is there, to discounting prices or adding/subtracting services. If I don’t ‘grab’ as much money as I can I may not have a business. Just wondering why you’re so annoyed that an airline tries to increase revenue? AS isn’t forcing anyone to buy up. I’m EP on AA, and I don’t buy, nor want a BE product....ever. But I have a friends that fly nothing but basic economy. Some don’t buy up and others do. All like it and use it exclusively. So I’m not really sure what your point was? Did AS take something away from the flying public? If so, what?
 
frmrCapCadet
Posts: 4410
Joined: Thu May 29, 2008 8:24 pm

Re: Alaska starts Saver Fares

Wed Nov 21, 2018 3:31 pm

Question on Alaska, when things go amiss WN is proactive in taking care of it, legacies often don't give a damn, what is Alaska's track record?
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