How does Virgin make a profit on $39 fare???

[rigger]

If the FAA and congress really did want to fix this industry they would outlaw pricing below cost (including industry average pay for all work groups).

So let me get this right, you want the government to go into the private sector(again) and tell the person who OWNS those seats what he can and cannot do with them????

One step at a time.....you should be happy these folks can sell or hell give the seats away if that's what they want to do......FREEDOM, it really is a great concept...worked well for years!!! try embracing it in everything you do!

 

[pilotyip]

Re-reg

So let me get this right, you want the government to go into the private sector(again) and tell the person who OWNS those seats what he can and cannot do with them????

One step at a time.....you should be happy these folks can sell or hell give the seats away if that's what they want to do......FREEDOM, it really is a great concept...worked well for years!!! try embracing it in everything you do!

Wouldn't be a return to regulation? Life was good for a few pilots under regulation. There are probably 3-4 times as many pilot’s jobs in 2005 as there was in 1977. Back in reg time it was about 90% military that went to the majors. Dereg opened up a lot of airline job to non-military pilots. To return to regulation would raise ticket prices, reduce the number of passengers, and therefore reduce the number of pilots needed.

 

[labbats]

So let me get this right, you want the government to go into the private sector(again) and tell the person who OWNS those seats what he can and cannot do with them????

One step at a time.....you should be happy these folks can sell or hell give the seats away if that's what they want to do......FREEDOM, it really is a great concept...worked well for years!!! try embracing it in everything you do!

Yes I do. That's exactly what I want and nothing more. I never mentioned re-regulation. Flooding the market with below cost seats attacks our wages. Putting an end to that seems like a simple and effective fix to the race to the bottom.

 

[Metrojet]

Source: http://www.virginamerica.com/va/search.do?method=thisIsHowToFly

San Francisco - Las Vegas$39
San Francisco - Los Angeles$39
San Francisco - Orange County$39
San Francisco - San Diego$39
San Francisco - Seattle$49
Los Angeles - Seattle$59
Los Angeles - Boston$99
San Francisco - Boston$99
San Francisco - Washington, D.C. (Dulles)$99
Los Angeles - Washington, D.C. (Dulles)$99
Los Angeles - Fort Lauderdale$99
San Francisco - Fort Lauderdale$99
San Francisco - New York (JFK)$99
Los Angeles - New York (JFK)$99

Ok TG Joe -

I am not falling for this - are you the VP of Flt for Virgin - Joe H- and just trying to get your fellow FI brothers to click on the links and buy a full fare ticket on VA? Ha Ha! Good try though!

Metrojet

 

[get2flyin]

If you're really gonna ask this question then you also need to ask How does usair lose money on $600 fares?

Management retention bonuses.

 

[rigger]

Yes I do. That's exactly what I want and nothing more. I never mentioned re-regulation. Flooding the market with below cost seats attacks our wages. Putting an end to that seems like a simple and effective fix to the race to the bottom.

Not saying I disagree with the concept it's the manner..... Don't look to government for anything worthwhile (cept the military and now we tie their hands so much they are becoming sterile) GOVERNMENT IS NEVER THE SOLUTION....only the BIGGER PROBLEM. Flooding any market with anything is called capitalism it's the folks that take the risks (and steal the money ha ha ) decision to flood the market. It should NEVER attack wages unless there are folks that will allow the wages to be attacked. If I make my widget it has a set cost you make your widget it has a set cost....If I want in your market I can do 2 things....make a better widget and prove it to the market or I can cut cost and show the market mine is OK also. If I cut and you cut we eventually loose money....if my pockets are deeper or I have bigger nads than you I eventually will win cause I price you out of the market. I can loose more money longer!! now if I can treat my people like crap and cut the wage I will make some of that up...problem is if I cut to the point I can't get people...I loose cause I cant build my widget at all anymore...every industry has a bottom....perhaps we have not hit ours yet, I don;t like it anymore than you but Govt will not solve it....only make it worse!

As for pilot YIP's comments....I agree with him, what you are advocating is that....There was some good and some bad.....being unemployed and JR anywhere I go next I think this would be BAD if I was real senior I would think GOOD...and there in lies or real industry problem...we have created an entire industry of have and have not's Those who have don't want to change anything and will do nothing to help guys "pay their dues" and those that don't have want everything changed and will do anything to get in to start to "pay their dues" I think we should work on that without the Government being involved then perhaps it will be the industry like say ALMOST EVERY OTHER ONE IN THE WORLD where hard work and skill land and keep the job rather than DATE OF HIRE!!!

 

[pilotyip]

Any Aviation Management College Degreed Pilots?

If you do not sell seats below cost you go out of business. It makes the difference in the one or two seats a flight that is needed to ensure overall profitability. Anyone read Hard Landing? AAL's Crandall came up with yield management. It goes like this you sell low demand seats in advance for below cost, maybe there is 5 seats on Friday, 15 seats on Tuesdays that sell below cost. As those seats fill the price goes up. Leaving those seats empty will cost the airline $M's, and once the flight leaves those seats are like spoiled fruit at the super market, they have no value. An unused seat can not be stored, they cannot be inventoried for future use, and they are useless. In order to pay for the airplane it must fly 10-14 hours per day, it must fly Tuesday and Wednesday. These are low travel days; these are the days the flier with no schedule to keep will buy tickets to ensure the airline comes close to covering cost on low yield days. I am sure there are some Aviation Management College degreed guys who could make meaningful input to this discussion. But then again they may not wish to disclose that, because management is a four letter word on FI.

 

[FADEC]

Give it a few more years and they'll be jblu's worst nightmare in lcc land.

They don't have slots at JFK so I don't think B6 are too worried

 

[labbats]

If you do not sell seats below cost you go out of business. It makes the difference in the one or two seats a flight that is needed to ensure overall profitability. Anyone read Hard Landing? AAL's Crandall came up with yield management. It goes like this you sell low demand seats in advance for below cost, maybe there is 5 seats on Friday, 15 seats on Tuesdays that sell below cost. As those seats fill the price goes up. Leaving those seats empty will cost the airline $M's, and once the flight leaves those seats are like spoiled fruit at the super market, they have no value. An unused seat can not be stored, they cannot be inventoried for future use, and they are useless. In order to pay for the airplane it must fly 10-14 hours per day, it must fly Tuesday and Wednesday. These are low travel days; these are the days the flier with no schedule to keep will buy tickets to ensure the airline comes close to covering cost on low yield days. I am sure there are some Aviation Management College degreed guys who could make meaningful input to this discussion. But then again they may not wish to disclose that, because management is a four letter word on FI.

I've read hard landings and am familiar with the "grapefruit concept" you mention. However, I believe both are nullified when the entire industry is forced onto the same page.

Step back from the matter and ask yourself if flying on those same Tuesdays and Wednesdays at a loss is really necessary. Cut the flights to equal profit via an established minimum price per flight and let the chips fall where they may. The only real disadvantage from a pilot perspective would be having mainly Tuesdays off, yet that would be outweighed by being paid as good or better than those of a previous generation.

 

[Ben Franklin]

Step back from the matter and ask yourself if flying on those same Tuesdays and Wednesdays at a loss is really necessary.

Of course it's necessary.

You want as many bodies traveling through your operation as possible, as often as possible.

(One should study Steve Wynn's business model of the mega-casinos he's pioneered instead of wasting your time on 'hard landings')

Passengers spend money on other things while traveling through your system and, if you weren't flying them through your hub, some other airline would be flying them through theirs.

More ASM's, everything else equal, means more CA and FO positions - not fewer.

But, I am a pilot. I fly A-B safely for a price. Everything else is academic and I don't think you need a mgmt. degree to understand profit/loss and supply & demand.

Sincerely,

B. Franklin

 

[pilotyip]

Alllocated Fixed Cost

Step back from the matter and ask yourself if flying on those same Tuesdays and Wednesdays at a loss is really necessary. Cut the flights to equal profit via an established minimum price per flight and let the chips fall where they may. The only real disadvantage from a pilot perspective would be having mainly Tuesdays off, yet that would be outweighed by being paid as good or better than those of a previous generation.

You can not park an asset on which you are making payments, lease, insurance and fixed calendar inspections, every hour it does not fly is an additional allocated fixed burden upon the rest of the flying you are doing. If you covered fixed plus a portion of variable, you come out ahead in spite of loosing a little on low yield days. Managerial Economics 101. Again if anyone has the answer, why don't they come into management and make it better.

 

[tomgoodman]

Negative customer training

Selling a few seats below cost made sense before the internet era of complete "fare transparency". As pilotyip says, a little revenue was better than no revenue, and you would still get your full-fare passengers later on. The problem now is that the widely-known existence of cheap fares has created great customer resistance to paying full price at any time. We have a self-created marketing problem, and I do not see a solution.

 

[RiddleEagle18]

Its funny because everyone thinks this is a problem for US Pilots. We are looking at this from our perspective. I get it this is an airline pilot forum.

Think about the overall impact higher fees would have on this country. Airline tickets have plummeted and so the average person can affrod to travel on airlines. The average citizens life has improved. Better mobility, faster travel, the ability to live in a different city and still maintain meaningful relationships with family. Companies can send employees greater distances, and more often to go secure the deal. Is air travel better? Not for the folks in coach but now they can actually afford it. If you want coach treatment from regulation days, you can buy a first class ticket for the same, adjusted for inflation, price. The premium product still exist but the advantages of airplane travel are now available to everyone.

Now repeat this throughout our entire economy. We are all more than happy to reap the benefits of a free economy throughout the rest of our lives.

Regulation(Government interference) in the form of price fixing, which is what you are suggesting is a jobs destroyer and a QOL destroyer on a macro scale. (US Population)

Im not saying all regulation is bad. Regulation to prevent price fixing among the airlines themselves is needed. Regulation is needed in the forms of public safety such as maintance standards. Some on that extreme would even argue thats not needed because an airline that crashes airplanes will natuarally be elminated from the market place. Im not willling to go that far.



Different Topic refering to not flying on tuesday and wednesday.
This is why allegiants buisness model has been succesfull. There airplanes are not leased or financed. The airplanes are payed in full and such can sit on tuesday without incurring a cost






Side note, this is the solution to Health Care as well. Free the market place to sell insurance across state lines increasing competition. Competition afterall is what the Democrates keep screaming. Free the market and watch prices plummet.

 

[pilotyip]

Yea we have to remember many of these pax buying low-fare tickets may elect not to travel at higher prices. They may also elect to use alternate forms of transportation such as driving, taking a bus, or car pooling, such as going to a bowl game in Florida from Atlanta. This is an economic decision to be made by the individual ticket buyer. The marginal rate of ticket price elasticity may not be exactly known. But it is there. I remember SWA raising their advance purchase tickets price last spring, they could not hold the higher price and had to revert to the lower prices within a couple weeks.

 

[CaptSeth]

Difficult situation to be sure. My feeling is some sort of re-regulation is necessary. There is no reason why airlines should be undercutting each other at prices far below cost in the hopes of driving them out of the marketplace or relying on below-market labor costs to finance inept pricing strategies.

I believe we know enough about segment costs from required DOT reporting to come up with a formula for a regulatory minimum fare per segment. That might do the trick

 

[pilotyip]

but?

Difficult situation to be sure. My feeling is some sort of re-regulation is necessary. There is no reason why airlines should be undercutting each other at prices far below cost in the hopes of driving them out of the marketplace or relying on below-market labor costs to finance inept pricing strategies.

I believe we know enough about segment costs from required DOT reporting to come up with a formula for a regulatory minimum fare per segment. That might do the trick

But what about the people buying fares that elect not to fly anymore because the price is too. As stated above, if prices rise there will be a fall off in pax, means fewer flight, fewer pilots, but the senior guys who hold on to thei rCapt's seat, well they might make more money at the expense of 75% of the pilot workforce. One of those unintented consquence things

 

[Pogue Mahone]

Step back from the matter and ask yourself if flying on those same Tuesdays and Wednesdays at a loss is really necessary. Cut the flights to equal profit via an established minimum price per flight and let the chips fall where they may. The only real disadvantage from a pilot perspective would be having mainly Tuesdays off, yet that would be outweighed by being paid as good or better than those of a previous generation.

If this fella starts an airline I would recommend shorting the stock.

 

[chperplt]

How was the flight?

The flight was great! Airplane was very comfortable and quiet. In flight entertainment was top notch, and both the cabin and cockpit crews were outstanding.

 

[clickclickboom]

They don't have slots at JFK so I don't think B6 are too worried

Fadec dont be so sure..

Two things will happen

VA will continue to bleed out, the credit markets will continue to dry up and they will fail

OR

They will limp along barely making money as they slowly enter new markets.

The best for competition is for them to fail but dont be so sure. They probably would have collapsed by now but they have not.

If jetblue was smart they would offer the va investors a nice 100 million profit, assume the debt, get the va pilots out of the " yes I love tea bagging " uniforms, and into the " yes my blue shirt makes me look like a dousche-bag" uniform, paint the tails blue and use the 28 or so planes to hit the west coast relentlessly.

JB can pay it now or slowly pay it over time like a cancer that eats away at you.

Everyone knows I am a VA hater so redwood guys take this as a compliment. Just calling it how I see it.

PS: I heard that branson buys empty seats through a travel company to increase revenue..? ( sorry couldnt help myself

 

[rigger]

PS: I heard that branson buys empty seats through a travel company to increase revenue..? ( sorry couldnt help myself [/QUOTE]


And thats why Branson will indeed make it, out of the box thinking.....what a great idea!!!