Every airline needs to raise airfares !

[LASvegas777]

I believe the airlines ALL need to make an agreement to increase every fare by 25-50 dollars minimun and then after that, the airlines can compete. The bar for the airline fares has gone down way to much!!!! I remember buying a ticket from IAH-MSP in 1986 for $198. you can buy that same ticket for that price today or even lower. People will fly and need to fly and should pay for it!!! With the low cost of fares now an airline can lose less money by cancelling a flight rather operate it.

People will still fly SFO-LAX etc for 399 vs. 299!!!! and they will be happy to pay only that..its time to stop giving away seats.

 

[flyinhard]

I have to agree and disagree with you. I have thought the exact same thing to myself but then I wonder this. How does SWA do so good? Cheap seats. I am not downplaying at all what you are saying, but why is SWA doing so good with cheap seats and no one else is? Pilot pay, other costs, poor management? I am just trying to get the same question answered, any ideas would be great!

 

[LASvegas777]

I agree that airlines like SWA and the new airtran and jetblue's can make money NOW on a flight from ex. MDW-ATL for $199rt where the likes of DAL,UAL will lose money on that same route with the same airfare. There are many different reason that UAL, DAL lose money on the same fare and route but regardless $199 rt airfare is too cheap. SWA could make even more money by charging and great deal of $224 that would sell just as many tickets. the bar has dropped to low and now with the emergence of Song and probally many more to come, the airlines will try to out compete each other with lower and lower fares which will effect even SWA down the road. SWA employees now realize that they are the money making airline and when comes contract time the pilots, mechanics, dispatchers, flight attendants will get more
deservingly so not take a %30 pay cut. With all the compensations at the majors. a SWA capt. will be making very close if not more than any other 737 capt at DAL, UAL, USair, CAL. So SWA should want to raise the bar as well since it will benefit then to. ALL I am saying is that ALL airlines should agree that every fare increases $25 dollars and after that then have your competetive fares. The airlines just need to raise the bar. Considering the cost savings to passengers to fly rather than drive 1500 miles or even 500 miles the bar is below what it should be.

 

[hogdriver00]

Bad idea

I think that’s called collusion. Whether you agree to raise or lower prices. Wasn’t there a big DOJ lawsuit in the 80’s or 90’s about this issue?

I’ve said this on other threads but the airlines have NO pricing power. Ever SWA and the other low cost carriers suffer from this. To put it a different way, if McDonalds could charge $5 for a bigmac they would but they can not.

 

[canyonblue]

I believe the airlines ALL need to make an agreement to increase every fare

Well the government says thats illegal (ie: price fixing) but it would be nice if they could. I posted another thread on NWA where my wife works where they may ask the employees for wage cuts. I guess it is easier for them to ask employees to give up money than it is their passengers.

 

[Midnight Mike]

Gentlemen, it would be against the law for all of the airlines to get together & agree to raise airfares at the same time....

Now increase the fares, how much? Each airline has a different price structure.

Right now Southwest, Jetblue, and Airtran are making a profit.
If the fares were raised let's say $50, then Alaska & Continental could turn a profit & the profitable carriers would make that much more of a profit.

Until you come to the point of US Air making a profit, but by that time the SW's, JB's will be making so much of a profit, that they would more than likely lower ticket prices and then we start back at the beginning again....

 

[jon210]

why should they raise their airfares? If they can't make money for providing a service at the same price as a compititor, they should go out of business. It's is not the customers fault that some of the major carriers don't have their sh1t together and so they shouldn't have to pay more to substisize some companies poor business pracrtices.

 

[SpeedBird]

This is a copy of a phone call made 20 years ago by two very influential people (Robert Crandall, then CEO of AMR & Howard Putnam, then CEO of Braniff). For those who've been around this business long enough, it is one of the great stories of the notorious Robert Crandall. It is also a great case study that has been studied by almost every business school in the country teaching business ethics.

******************************************

Mr. Crandall: I think it's dumb as hell for Christ's sake, all right, to sit here and pound the @!#%! out of each other and neither one of us making a !@#$%! dime.

Mr. Putnam: Well...

Mr. Crandall: I mean, you now, godd@mn, what the hell is the point of it?

Mr. Putnam: But if you're going to overlay every route of American's on top of every route that Braniff has-I just can't sit here and allow you to bury us without giving our best effort.

Mr. Crandall: Oh sure, but Eastern and Delta do the same thing in Atlanta and have for years.

Mr. Putnam: Do you have a suggestion for me?

Mr. Crandall: Yes, I have a suggestion for you. Raise your godd@mn fares 20 percent. I'll raise mine the next morning.

Mr. Putnam: Robert, we...

Mr. Crandall: You'll make more money and I will, too.

Mr. Putnam: We can't talk aobut pricing!

Mr. Crandall: Oh!@#$%!, Howard. We can talk about any godd@mn thing we want to talk about.

*************************************

Here's a related article about one man's opinion on the state of the economy. It shows that the pain and suffering being felt by many in our industry is being shared by many others in other areas of our economy:

http://www.thestreet.com/_yahoo/funds/jubak/10069427.html

 

[LASvegas777]

15 years ago how much did it cost to go on a crusie? rent a car? get a Hotel?Buy Jet fuel? Buy a car or house? It was alot cheaper then, then it is now, but still an airfare today from NYC-LAX can be bought for $350 maybe even cheaper that ticket was the same price 15 yrs. ago. I am sure if you bought the same things that i mentioned today at 15 yrs ago prices the company would still make money but the way i see it the public hasnt paided for inflation when it comes to buying an airline ticket like they do with everything else they buy. it is becoming way to expected by the public that they get airfares for nothing. when all these major airlines unions finally settle on compensations from the pilots, and the SWA pilots get raises, I wouldnt be surprised if SWA 737 captains are the highest paided in the industry. The Bar has to be raised for airfares, if not just to stay with inflation of plane cost, fuel price, employees salaries. how much more money would an airline make a yr if every seat sold times $25 more dollars??

 

[canyonblue]

Just had this conversation with a mother at my daughters pre-school. Going to Florida in August but says shes gonna drive because those darn airfares are just too high. No one sees it as something that should grow with inflation. The people set the pricing power and its that magic number that will take them out of the car and into the plane. We talk about "the bar", well unfortunately the passengers have theirs below ground. I just get mad when the person who complains about airfares is the person who is in an industry that rapes the consumer but justifies it for themselves.

 

[dgs]

Demand for airline tickets is not fixed. It is unquestionably a function of price.

SWA made their money in the early days by making it cheaper to fly than to drive between San Antonio, Dallas, & Houston. "Nuts" is a good read for anybody, regardless of your background and tells the story quite well.

I was astonished in the post-9/11 market that a ticket to Colorado on United was in the $600-800 price range. I could have driven that route in one day for 1/10 that price--and taken my wife for free! Although painful, I made several of those drives simply because we could not afford the airline tickets. I most certainly would have preferred to fly and was frustrated that United didn't have lower fares. They lost a lot of potential income by pricing themselves out of the market.

One of the reasons we do well in the NY-Florida market is because we make it cost effective for New Yorkers to go to Florida regularly. We have people who fly those routes many times in a season--whenever their schedules will allow them to get away from the snow and cold in NY. I was on a plane from Rochester to JFK today where half the people were going on to Florida. If the price was too high, people would simply not go, go less frequently, or find cheaper transportation.

While Song may give us a run for the money in that market, if the fares are right, we'll probably both have full airplanes and everybody will make money--won't that be grand!

So while it may sound good on paper, the bottom line is that price affects demand. Finding the right price to fill up the airplane will make you money. Ironically, the solution may be to lower airfares, increase load factors, and make enough money to cover the expenses of operating the flight!

 

[Publishers]

OKJ

Over the last 10 to 15 years, airlines developed very sophisticated pricing models. These revenue enhancing programs allowed them to price the seat in a manner to maximize their return.

Their success with these programs masked the fact that their base revenue dollar per mile was going nowhere nor did they really have their labor and other costs under control.

It was possible that no two people on a flight of 160 passengers were paying the same fare.

One reason for the development of the program was that the passenger became a more and more sophisticated purchaser and for the most part ( other than pure last minute business flyers) was not willing to pay past a certain fare for a trip.

What we are seeing today is what happens when, even with that level of detailed pricing, you cannot make money. All this talk about protecting the profession and keeping the pay high is ludicrous if the people who pay the bills will not buy the ticket.

 

[Flying Freddie]

Hey Dudes! Supply and demand.

 

[SWA GUY]

All the airlines getting together and raising fares is not called collusion, it's called "Price Fixing" and it's illegal here in the US. Interestingly enough it's LEGAL in Japan!

Now, if one airline makes a price increase and the others follow, it's a different story.

 

[LASvegas777]

I would agree that every airline couldnt increase the fares overnight but slowly if they all go up just 10 bucks its a start. SWA what does a senior SWA captain make a year now??

 

[SWA GUY]

Well it's hard to say. Since we at SWA don't have hourly caps, other than FAA limits, it just depends on how many trips you can pull in for the month.

I can give you an idea of how much I'll make as a CA in 2006. I use that year because I've looked at my senioirty and calculated my upgrade to be in that year. By 2006 I'll be on 6th year pay, with 5 years of service.

I took an average of how many "trips" I fly and averaged it into how many hours it equals...roughly. By 2006, 6th year pay is $160.00 per trip. I usually fly 105 trips per month, or about 67.5 hours.

So, 105 trips per month, or 67.5 hours, equals $201,600.00 annually.
That does not include profit sharing, per diem, or stock options. I leave that stuff out for simplicity. Who knows what the options will be worth when they are fully vested? Maybe a lot, maybe nothing. It's just too hard to predict something like that.

The scenario above is based on 810 hours of flying annually. So, there is room for more flying, or more income. Also there is the possibility that I may not fly that much for whatever reason. In which case my annual income would be reduced. 105 trips per month is not very difficult to do at all. For instance, last month I was paid for 128.66 trips and flew 64.5 hours ( 1 week of vacation). In 2006 that month would be worth $20,585.60.

I'm sure there are carriers out there that pay more, but I think I can manage on that income. Who knows, by 2006 we might have a new contract with more money. Then again by 2006 I could be on the street.

Best wishes and best of luck to all my friends at the other majors who are on the street or about to be there...I feel for you. And I wish furlough on no one.

 

[LiveFreeorDie]

LasVegas777-


Have you taken Economics? I'll make it simple for you.


Say 1000 people fly from San Diego to LAX on a given day.

If you raise the price $10 you wont make $10,000 more dollars.

Why?

Because some of the 1000 will decide to drive to LAX.

It isn't a zero sum equation. (It is just like raising/lowering taxes doesn't increse or decrease govt revenue on a 1 for 1 basis.)

Taxes do the same thing. You put a 25$ tax on an airline fare to pay for security incresed it affects the airline and the public.

Either the airline has to lower the ticket price, or less people will decide to fly because of the higher cost.


So when you say, "ALL AIRLINES SHOULD RAISE TICKET PRICES", it makes you sound ignorant. We live in a free market. The CCCP had a planned economy. Look where it got them.


Any questions?

-LFD

 

[BLUE BAYOU]

The flying public is significantly different 15 years later... They're smarter!!! A lot of this progress is due to the internet and the ability of the consumer to obtain the lowest fare available-- as long as there are airlines offering cheaper fares and not in collusion with each other, that's capitalism at it's best.

 

[resistance]

I've have been on the theory that if you can go from New York to Florida (or New York to L.A. for that matter) cheaper by air than any other means of transportation than the system is broken. You can look into any modes of transportation (bus,train,car or ship) and I can bet that air travel is the cheapest fare. That is the problem right there!! It costs a forture to keep an airline...any airline in business due to the government regulating the business, however they won't regulate the fares?? Personally I think they need to get back to the days of regulating the route fares (a minimum set fare but the airlines could charge any price higher).

If the government want to regulate the operation than regulate the fares!!!

 

[100LL... Again!]

First of all, regulating fares will not work. KKnow why we all got flying jobs? Deregulation made new carriers easier to start.
If we go back, pilot jobs will be as scarce as they were in the 70's.

Repeat after me:

Supply and demand
Excess Capacity...

Supply and demand
Excess Capacity...

Supply and demand
Excess Capacity...

Screwing around with free markets invokes thelaw of unintended consequences.