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Decline of 1st Class: LCC vs. Mainline

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MK82Man

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The Wall Street Journal, 2 March 2004
By Ron Lieber

Is First Class still Classy?
As Prices (and Perks) Drop, We Do a Cross-Country Test; Paying $2, 000 for Five Flights

HOW FAR MUST first-class airfares fall before people decide it's actually worth it to pay to sit in the front seats? In recent weeks, the nation's airlines have decided to find out. Alaska Air Group's Alaska Airlines kicked off the deals a couple weeks ago by cutting some first-class fares to less than a third of what they cost a year ago. America West quickly followed with the introduction of a new type of non-refundable, advance-purchase ticket: First-class round-trips from New York to Los Angeles are now available for roughly $1,000. All this is happening because carriers are getting tired of giving away their first-class seats to people who are using their elite status to upgrade. Fewer than 10% of domestic first-class seats are actually sold for money. With the airlines fighting for every dollar, they've now decided that they have nothing to lose by lowering fares to see if more people will pay money for a confirmed seat rather than buying in coach and hoping for an upgrade.

Bigger, airlines, including AMR Corp.'s American Airlines, Delta Air Lines, and Continental Airlines, are already matching the price cuts on some routes. US Airways says it is matching other carriers' cheap first-class fares to Las Vegas. Meanwhile, the low-cost carriers keep raising the stakes. ATA Airlines Inc. said last month that it will add premium cabins in its planes by the end of the year. Its plan: Cap domestic fares at $399 one way for coast-to-coast flights-$100 less than America West's cheapest first-class ticket. But does "first class" still mean first class? Prices aren't the only thing being cut. Airlines have been dropping meals for first-class passengers on many domestic flights, and legroom is now just slightly better than in coach on many domestic flights.

To assess whether and when it's worth forking over actual money to get out of steerage, we set out on a two-day, six-city, 18-hours-of-flight marathon. The trek took us from New York, to Los Angeles, San Francisco, Seattle, Las Vegas, Atlanta, and then back home. The first thing we learned is just how much prices have tumbled. With just a half-hour of shopping around online, we were able to line up five one-way first-class tickets for a total of $2,022.50. We also quickly found out why most people weren't willing to pay the old inflated fares. We were served meals on only two of the five first class flights. On AirTran, we had so little room in our first-class seat that we couldn't work on a laptop. This problem is more common than one might think in domestic first class, particularly if the person in front of you reclines, since first-class seats lean back farther than, coach seats. In fact, in our experience, all of the first-class seats in our test actually provided less legroom than most emergency exit-row seats in, coach. True, coach seats are still a few inches narrower than first class. But still, if you can sit in an exit row you can always unfold your laptop if you need to work-without having to pay more money, or cash in a bunch of miles, for the privilege.

The-trip started with an early-morning America West flight from John F. Kennedy airport in New York to Los Angeles International. It's a new route for America West, and it goes up against American, United, and Delta-all of which had been in the habit of charging sky-high fares to the Hollywood types who frequent the route. We paid $507.60 for our one-way fare, including taxes and fees. Bigger airlines sometimes charge more than three times as much for a similar ticket, but they also still have some advantages. For one thing, our America West flight was on a narrow-body Airbus A319. But American, United, and Delta fly widebody planes on the route, which cuts down on claustrophobia during six-hour flights like these. America West served a sizeable fruit platter, plus granola and a croissant. We asked the flight attendant for one of the egg sandwiches on sale for $5 back in coach. While we did have to pay for it, we got the added bonus of having it heated up in the first-class oven.

Next we hopped United from Los Angeles to San Francisco. At $407.10, it was the priciest flight on a miles-per-dollar basis, even though Alaska now travels the route in some cases at less than half that price. Once airborne, we were impressed when the flight attendant passed out business cards with a written message from the captain: "Welcome aboard." Even though he misspelled our name, it's clear Capt. Mark J. Hitchcock isn't taking any passenger for granted these days. "A lot of flying these days is very impersonal, with people packed in like sardines," Capt. Hitchcock said later.

Next, we flew Alaska Airlines up to Seattle on a dinner-hour flight. Price: $259.10. The big glitch here was, in fact, dinner. The counter agent said there'd be no onboard meal, so we chowed on a burger only to score a freebie chicken sandwich and pasta salad after takeoff. An Alaska spokesman said a recent revamp in catering may have caused the mix-up. One day down, one to go. For relaxation, we took a dip in the outdoor pool at our hotel near the Seattle airport in 45- degree weather. The next day: Vegas. We paid $178.10 to fly down on Southwest (which has no first-class). Unfortunately, Southwest does “party” style seating in the sought-after exit row, meaning two rows of three people face one other with their legs tangled up. Since Southwest doesn't have assigned seating, a standoff ensued when a late-boarding mother and son couldn't find seats together. The flight attendants offered free drinks to passengers willing to swap.

Our real reason for hitting Vegas was to try out AirTran's premium cabin on the next leg. It doesn't serve meals, even on the three-plus hour noontime flight we took from Las Vegas to Atlanta, for which we paid a modest $300.60. Its seats were the best of the bunch--or the worst depending on your needs. The seats recline very far, which is great for snoozing, but not so great if you are behind a napper. When this happened to us, we couldn't open our tray, let alone work on a laptop. A company spokesman said the seats aren't supposed to go back quite that far. The final leg of our marathon was a $548.10 flight from Atlanta to La Guardia on Delta, the most expensive fare we paid. It was also very pleasant and even old-school, with wide leather seats, doting flight attendants (and several rounds of drinks before takeoff). We felt like we were sitting in first class.

WSJ, By Ron Lieber, 2 March 2004

Have a complaint about the consumer experience? Write to [email protected]
 
The final leg of our marathon was a $548.10 flight from Atlanta to La Guardia on Delta, the most expensive fare we paid. It was also very pleasant and even old-school, with wide leather seats, doting flight attendants (and several rounds of drinks before takeoff). We felt like we were sitting in first class.

WSJ, By Ron Lieber, 2 March 2004

[/B]

Although this was just one trip, that's nice to hear. It's good to get some good press once in a while.:)
 
AirTran doesn't sell First Class seating; we only have Business Seating. Unfortunately, the person who wrote the article seemed not to know the difference.

Also, as a person who sits in Biz Class quite often, I have no problem working on my laptop onboard . . . . apparently, there really was a problem with the seat ahead of him. Unfortunate, but I guess that is the luck of the draw, and a F/A should have noticed it if it was that bad (and it sounds like it was).

Anyway, copngratulations to all the airlines mentioned in the story; seems like we at least met his expectations . . . . no horror stories about disappearing luggage, flatulent F/A's or drunken pilots, at least.
 
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.....BUT.....

If you takeaway the perk of upgrading to First Class on long trips, here is what will likely happen...

1-Travelers won't enjoy your coach section. So...if they cannot upgrade rather than get beaten up in the cattle car section of coach they will look for airlines with either the BEST coach section or CHEAPEST business class upgrade. That leads many towards Jetblue or AirTran in the city pairs they serve.

2-Folks will look for ANY alternative to traveling coach, be in teleconferences, GA or corporate travel, or driving. Not only is it more comfortable, they avoid the TSA nazis undressing them in public.

So...if the airlines try to alienate their frequent travelers who for company fiscal reasons are not allowed to upgrade, then they will find yet another group of travelers who will seek alternatives. It strikes me that whenever times get tough in the airlines, the customers who STICK IT OUT IN ROUGH TIMES and continue to support the airline are the ones who are the first to get penalized. I fly on (company discounted) NWA tickets at least 4-5 times a month on a good month. If my reward is being crammed in coach every time, odds are I'll find other arrangements. I'm sure the guys who travel frequently on business accounts feel the same way. Pushing your most loyal customers out of their favorite perks is a way to make short term gains but lose your most valuable and lucrative customers. Comments about the trays aside, the majors DO NOT want to compete with AirTran's $35 dollar business class upgrade. AT has the nicest ride of any airline I've flown (to include JB and its gucci TVs) on its 717s, and although I haven't been to Paris in on 777 lately for domestic service the AT business class is hard to beat. JBs TVs are nice, but at 6'2" I'll take a better seat pitch and more legroom anyday. However, if I had my family along, I guess the TVs would be a huge incentive to keep everyone else happy. In either case, the majors better watch what they wish for...they may soon just have a handful of infrequent travelers paying for first class while their bread and butter frequent flyers are exploring other options.
 
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Ty Webb said:
Also, as a person who sits in Biz Class quite often, I have no problem working on my laptop onboard . . . . apparently, there really was a problem with the seat ahead of him. Unfortunate, but I guess that is the luck of the draw, and a F/A should have noticed it if it was that bad (and it sounds like it was).

The last time I flew was on AirTran. For some reason or another, I was upgraded to Business Class. It was quite comfortable. I was able to sleep on an airplane for the first time in my life.

Oh yeah, thanks AirTran for not flying me the entire trip on an RJ, and allowing my late evening trip home to be relaxing. I'll definitely ride AirTran again even though I have to go through Hot-lanta.
 
When I was living in Atlanta and commuting to MDW I would always use AirTran to jumpseat to Chi Town. Often I would get a "Business Class" seat. That's exactly what AirTran advertises their seat as. Biz Class! Nothing more. For heaven's sake, it's a B-717 and the biz class is comfortable!!! What do some of these news reporter types (experts at nothing) expect on a B-717.... flip out TVs, piano lounge with your choice of whiskey, an upper deck to lounge around in?

AirTran offers a great product and I'm sorry to see they still carry the stigma of the ValueJet crash in MIA (I have relatives in ATL and MIA who won't fly AirTran because they say, "Oh, that's ValueJet, they had a crash you know.") I want to wring their necks, and I try to "'splain to them that ValueJet did nuthin' wrawng when dat der 'plane' weent down over yonder in da 'glades" but you always have to consider your audience.

Anyway, enough ranting. AirTran does a mighty fine job of getting people from A to B with minimal fuss and on nice aircraft, but to expect the same B-767 first class cabin on a B-717 is a stretch, yet I realize we are dealing with reporters here. :rolleyes:

BTW thanks to all the AirTran crews who let me ride to/from work. I no longer commute, but when I upgrade, I hope to return the favors. :)
 
AlbieF15 said:
.....BUT.....

If you takeaway the perk of upgrading to First Class on long trips, here is what will likely happen...

1-Travelers won't enjoy your coach section. So...if they cannot upgrade rather than get beaten up in the cattle car section of coach they will look for airlines with either the BEST coach section or CHEAPEST business class upgrade. That leads many towards Jetblue or AirTran in the city pairs they serve.

It's irrelevant. People look for one thing only, Price. That's why their is Priceline.com and not Best seat.com or Most TV channels.com.

Just ask someone. The only two things you ever hear are.
1-the price they paid
2-IF the service stunk.
We tend to get too caught up in the minutia because we travel for a living. My neighbor booked JetBlue to try out the TV. He liked the airline. BUT when I asked him who he last flew to FLL, he told me LUV. One reason only, price. Their is no brand loyality among LCC travelers, this is huge difference when comape\red to the business FF traveler
----------------------------------------

2-Folks will look for ANY alternative to traveling coach, be in teleconferences, GA or corporate travel, or driving. Not only is it more comfortable, they avoid the TSA nazis undressing them in public.

I argee with you completly. I am now flying for a major international bank out of NY. We recently sat down with our travel people. I asked them the exact question you refer to. They told me, "travel is down 12% and teleconferences were up 18%. This was a trend that she expected to continue.

This is why I firmly believe that domestic coach service is a price line commodity.

The perk of First class will always be there for the legacy carriers. Because of the uprgaded service and the international destinations. For the time being the legacy carriers will still be able to maintain a business traveler advantage over the LCC. A larger seat is great but it's still just a bigger seat on the bus. Business travelers (the repeat customers) want a seat in the Limo.

Legacies will still dominate business travel because:
1- Because they can take you to more places with their route structure.
2-They fly Internationally.
3-And most importantly they shop the travel contracts. Large Fortune 500 companies are still tied into reservation systems that do not access SWA, B6 or AT. Those companies do not offer the large corporations the discounts that the legacy carriers do. So even if the AA internet fare is $100 and a LCC fares is the same $100, corporation XYZ never pays the $100 anyway.

According to those same travel folks I work for. They are not interested in the LCC:
1-Because it requires going to different web sites for each airline. That takes time and during here recent studies it doesn't save all that much money (legacy fares are competitive, especially with the corporate discounts)
2- The over booking tends to be worse. What she they mean is. If AA over books on a DFW-LGA flight they have on leaving one hour later. It's not the same with an LCC.
3-You can't go international
4-They do not travel to the airports of choice. B6 LGB vs LAX, SWA does not do NY, you get the picture. In their opnion time is money and the few dollars that you may save does not translate well to the business market.
Don't get me wrong I am not picking on the LCC. Their destinations airports are located in the Burbs and bode well for the liesure traveler. I just put my wife and child on an SWA flt out of ISP because I was not interested in traveling into JFK or LGA for the same price.

This is why I believe any deviation from the orignal LUV model will prove disasterous for the LCC. You either compeate on price or you don't.
 
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chawbein said:

Oh yeah, thanks AirTran for not flying me the entire trip on an RJ, and allowing my late evening trip home to be relaxing.

Give it time.;)

What happens when all that is left is SWA, Air(valuejet)tran, ATA, Jetblue, VirginUSA, Frontier etc? And the shet hits the economic fan and all the airlines are gasping for air because you can basically buy an airline ticket for cheaper than a pack of gum at the airport. They will be asking for pay concessions from all the underpaid LCC pilots and even when they get them they will still outsource flying to the Big 150 seat RJ flown by gulfstream intl. pilots paying to work there.:rolleyes:

Boy am I a killjoy or what?
 
The only thing this Paul character wants is to start a pi33ing contest on this thread. Air(valujet)Tran, underpaid LCC pilots, give it a break pauly no one wants to hear you cry anymore.
 
Ours was expensive but they were treated well. That is nice to hear for a change....

Bye Bye---General Lee:rolleyes:
 
jetdawg said:
The only thing this Paul character wants is to start a pi33ing contest on this thread. Air(valujet)Tran, underpaid LCC pilots, give it a break pauly no one wants to hear you cry anymore.

Listen friend,

I'm not trying to start anything "jetdawg", Valujet is or was airtran and LCC pilots are underpaid. These are facts. Are you often offended by facts? I am just saying that one possible outcome of all this muck is that there will only be LCCs most of which have their managerial style based largely upon paying employees less and less to outdo the other. If it keeps up this way the LCCs will begin undercutting other LCCs and then that leads down a path the "Legacies"(whatever that is) are in now. U-C? :rolleyes:
 
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Paul:

You are an idiot. AirTran and Valujet merged so long ago that there isn't even a single airplane in our fleet from either carrier . . . not a one. Management? CEO, COO, DO, DOM . . .All either post-merger or original AirTran. Pilots? Maybe 1/4 of the seniority list is former VJ.

In other words, that was another time, another world.

As for LCC guys being low-paid, well, let's hear your story. Where do you work? Show me the money . . . . or I'll be happy to show you- the door.


See Yaa!
 
TY,
Give the guy a break man. It’s a bitch to fly that C-210 at night with no radar, sleep, sloppy maintenance and no one hiring for the foreseeable future.

On the “Can’t put the tray table down” reporter I wanted to point out he was on Ryan and not AAI.
 
FLB717 said:
TY,
Give the guy a break man. It’s a bitch to fly that C-210 at night with no radar, sleep, sloppy maintenance and no one hiring for the foreseeable future. [/i]


Well, then, he should do what the rest of us did- scavenge the change out of the cracks of the pilot lounge Barcoloungers and keep his d@mn yapper shut!
 
**CENSORED****CENSORED****CENSORED****CENSORED** it MAN! that’s my retirement fund, don’t give him any ideas!
 
Paul R. Smith said:
Give it time.;)

What happens when all that is left is SWA, Air(valuejet)tran, ATA, Jetblue, VirginUSA, Frontier etc? And the shet hits the economic fan and all the airlines are gasping for air because you can basically buy an airline ticket for cheaper than a pack of gum at the airport. They will be asking for pay concessions from all the underpaid LCC pilots and even when they get them they will still outsource flying to the Big 150 seat RJ flown by gulfstream intl. pilots paying to work there.:rolleyes:

Boy am I a killjoy or what?

Outsource of flying is a real threat. We SHOULD focus on that. LCCs being the problem, I have no idea.

Failure of the Big boys to deal with the competition had nothing to do with, I'm sure. It had nothing to do with UAL spending big bucks on a failed business jet venture or merger with USAir.

I don't think you are a killjoy. Just a what.
 

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