Aviation industry tries to undercut key change

[pilotyip]

Damn It YIP STOP IT!!!! This using common sense thing has got to stop on this forum!!! These greedy companies must be stopped they are not allowed to make any profit they must SHARE the wealth equally!

I'm sorry, I some times get carried away and go into this reality thing, which really has no place on this site

 

[rice]

YIP,
Using your logic, loads should have plummeted when $25-$35 (each way) checked bag fee's hit the market. Now I'm no economist but it's been my experience that most every flight that I've been on in the past 3 - 5 years has been north of 90% full.
Again I doubt that a $10 fare increase would have much impact on the traveling public. However, that $10 per ticket could go a looooooong way towards a pay increase.

 

[AKMD80GUY]

Just my .02 but I went to ERAU on my own dime. I flight instructed, flew night single pilot 135, and flew night cargo in a twin. You can't put a price on experience. Because I had students try to kill me and then scare the hell out of my self flying in all kinds of weather at night etc...I'm a better pilot for it. You can train someone with no time to fly a big jet but it takes years of experience to make you safe. You can't train the big picture and common sense.

 

[pilotyip]

YIP,
Using your logic, loads should have plummeted when $25-$35 (each way) checked bag fee's hit the market. Now I'm no economist but it's been my experience that most every flight that I've been on in the past 3 - 5 years has been north of 90% full.
Again I doubt that a $10 fare increase would have much impact on the traveling public. However, that $10 per ticket could go a looooooong way towards a pay increase.

Hey then go for it, with your logic there should be no impact, no slowing of growth, no reduction in flying, however one of us might be wrong.

 

[Mamma]

Whether or not you agree with Yip, he is correct from an economics standpoint.

All supply/demand curves are usually smooth.

If you raise the ticket price from from 99 to 109, you will lose some passengers - that is simple fact.

The question is HOW MANY you will lose. Half a percent? Three percent?

The supply/demand curve can predict that outcome somewhat.



But that is not the whole story - since more revenue is made on the passengers that remain, total profit may increase. Or remain the same. OR decrease.


Every link in the supply/demand chain of air travel must participate in the supply/demand pricing.

There is no way to permanently insulate pilots from the variances in pricing. Right now, the US is entering a period of wage deflation. Since all pilot/company bargaining is accomplished by human beings, the pricing of the labor of those people WILL be subject to those economic laws.

You may as well get mad at the weather.

I never said supply and demand was not part of the equation BUT, are you stating as a fact that airline prices right now are at the break point? One more dollar and enough people are going to start dropping off to affect the bottom line? If you want to use supply and demand to prove your point take this example: If you go to a market that is served by only one carrier you will notice the prices are very high compared to markets that have multiple competitors. That higher price market is still filling the plane or the price would be much lower. So, that alone establishes that people are willing to sacrifice more money for more time. Many may choose to drive, but many choose to still fly. Those markets are far and few between as most markets have competition and in the age of internet purchasing, the carriers have to match the lowest fare....even if they lose money. Its called keeping market share. So, I say you and YIP are correct in the assumption that a $10 add-on to a ticket might chase away 4-5 people and that add-on will cover for their loss and increase profits. You are incorrect in that tickets are at a break point and the bottom line would be affected by small increases. YIP is also incorrect in believing that the consumer is setting the ticket price. The competition is and as recent add-ons have shown, the consumer is still willing to pay more.

I also contend that most leisure travelers would chose to save time vs a few bucks and fly. If I had to drive from Seattle to Dallas, I would lost a lot of precious vacation time; work time; productivity time and so forth. If I was retired and on a limited budget, I may not want to put all the wear and tear on my car. Maybe I would not want to drive during the winter or hot summer. I think YIP is in an extreme minority of people who would drive 1100 miles to save $200.

Last, I am for reasonable pay. I think we should be compensated for our skill-set appropriately. Supply and demand has a role. I notice when we are over supplied with pilots, the wages fall and vice versa. The economy plays a big roll too. It's a cyclical thing but there is a "fight" over the limited piece of pie at each company and it is the union's obligation to get a fair deal for their members and the company. Has the deal been fair lately? Maybe not so much given historical standards, but I am all for them going up some more...especially for regional pilots and gutter-ball outfits.

Anyway, at least the debate is respectful and we each have our own opinions. Now I will go get mad at the weather. Whatever that means.

 

[pilotyip]

I think YIP is in an extreme minority of people who would drive 1100 miles to save $200.

as per above as posted by another pilot, the saving are much more than $200 for a family of four. I have nothing against you making more money, shut the place down until you get what you what, it may come out better, it may come out worse, and anyone who says anything else is guessing.

 

[Mamma]

as per above as posted by another pilot, the saving are much more than $200 for a family of four. I have nothing against you making more money, shut the place down until you get what you what, it may come out better, it may come out worse, and anyone who says anything else is guessing.

YIP,
I never made an argument for more money. I had three issues...none of which was pilots making more money.

1) It's not good to tell people to "fly because you like to" and forget about quality of life/security issues with their careers. That is not responsible. I think people should be fully engaged in their careers. FI provides a source to vent but also can be a place to help direct their angst.

2) You made the statement that ANY increase in ticket price would cause a percentage of passengers to not fly and then made an example that many would choose to drive 1100 miles each way than spend a extra on a ticket. I say if the increase is not drastic, the leisure traveler is going to choose to fly vs drive because of limited vacation time. I also say there is more that can be added to tickets because they are artificially low due to excess capacity and numerous start-ups/LCCs fighting for marketshare.

3) Last, if labor were to get increases you said it would lead to increased ticket prices. That may be true if the increases were large enough, but I make the claim that there is a "pie" in regards to available money. Management, shareholders, employees all vie for their piece of the pie. Union negotiating committees get to see the company books during contract talks so they know how much "pie" they can realistically get. This year it is a HUGE pie. Next year, maybe not.

I don't know why you are so against the betterment of this profession. I don't know any rational person who wants to burn their company down with unrealistic expectations. You argued against the Spirit guys during their labor dispute against a horrendous management. You only argue for passengers and management. Tell you what, maybe instead of flying because you like to, maybe you can advocate making this career people of high caliber are going to want in the future.l

Here is something from the "Delta 3rd Quarter Profit" thread:

Passenger revenue rose 19 percent on higher demand and ticket prices, while revenue from cargo shipments surged 28 percent on higher volume and prices. Higher baggage fees also drove results.

 

[ualdriver]

Guys, a certain poster on this forum has been repeatedly saying that there is going to be a huge pilot shortage in 2012! Who cares if less pilots fly because airfares are FINALLY coming up to cover costs so that airlines can operate like normal, healthy companies in other industries and cover their costs? There will be PLENTY of pilot jobs for everyone in 14 short months. So when Yip says watch out, if airfares go up there might be less pilot jobs, I say no problem- let airfares come up so we can finally get raises like normal professionals. Soon there will be plenty of jobs for every pilot, right?