Expert calls latest round of fare sales 'economic suicide'

[canyonblue]

If you've been waiting for the next round of fare sales to buy your ticket, now may be the time to act. United and US Airways announced broad fare sales Monday, and Northwest quickly matched, reports the Chicago Tribune.

Travel Web site Travelocity said it recorded more than 47,000 airfare reductions ahead of the sale on Sunday night, accounting for one of the most widespread price markdowns in recent history, according to a company spokeswoman. Some industry experts, however, questioned the wisdom of the move when most U.S. airlines are strapped for cash.

"I love how two bankrupt airlines are lowering prices at the same time oil prices are surging upwards," said Henry Harteveldt, vice president and travel specialist for Forrester Research. "The airlines are just continuing to commit economic suicide." With demand typically low before the busy summer travel season, airlines typically discount spring fares to spur demand.

 

[Skater]

It sounds like Pan Am and Eastern, you have to generate cash just to pay your debt servicing. I saw where US Air is down to $540 million in cash left (of the $745ish the government let them tap into).

 

[skykid]

Unbelievable. There have never before been sales for seats for the post-Spring break/pre-Summer travel period - this is unprecedented. It would be much better to let the seats go empty. It is a good thing that experts like Henry in the article and folks on this board can point out the obvious. I bet if you had access to tell an airline executive to raise fares $50/ticket they'd say "Oh you're right. I never thought of that!" It's just that simple, right?

 

[Saabslime]

I bet if you had access to tell an airline executive to raise fares $50/ticket they'd say "Oh you're right. I never thought of that!" It's just that simple, right?

Actually.............yes, it IS that simple. Every other industry known to man seems to have figured it out.

 

[skykid]

Actually.............yes, it IS that simple. Every other industry known to man seems to have figured it out.

Yippee! As soon as the CEOs of a couple airlines get my email then, this industry will right itself. I'd say by tomorrow, all problems solved. In the meantime, vote for Pedro and all your wildest dreams will come true.

 

[Jetjockey]

Supply and Demand. Were you guys sleeping during that econ class? There is way to much supply. Demand is growing, but so is supply. Almost every airline reported gains in revenue passenger miles, avail seat miles, and load factors. Yeild is still in the negative column when compared to year-to year results. Combined with the unfair playing field bankruptcy creates, you get results like this. The saddest part of all is the costs are handed to the employees, instead of the consumer where it belongs. I feel I have been subsidizing (with my paycheck) cheap airfare for last 5 years!

 

[skykid]

Supply and Demand.

Oh, I've never heard of that. So you're saying they can't raise fares. I need to recall my emails to the CEOs. Would this concept of supply and demand be taught in macro or micro economics? Let me know because I'm going to enroll in a class at CU. Right now I just have an Indian Studies class there, and I need to pick up another class.

 

[Jetjockey]

Consider basket weaving.

 

[labbats]

I'm still shocked that the government allows the bankrupt airlines to do whatever they want. I realize this is a democracy, but c'mon. Fair is fair.

 

[skykid]

I'm still shocked that the government allows the bankrupt airlines to do whatever they want. I realize this is a democracy, but c'mon. Fair is fair.

You need to research the terms of the sale. Excerpts from United's terms:

Tuesday and Wednesday travel ONLY (domestic flights).

Only valid Apr 4 - Jun 10.

 

[mnboyev]

Southwest made money... AirTran made a little money... JetBlue made a little money... Sorry Honey.... Big Boys... made no money.....

Last week I think there were about 5 NWA overnite mainline jets on the Ramp in Flint.... Good use of resources... But, they are flooding the market with Red.... ......Red Ink that is...... LOLOLOL...

Keep up the good work Steenland.... Just another lawyer.

 

[furloughfodder]

Surprise, surprise.

It's United and USAir starting the fare sale!

Oh the joys of being bankrupt. "If we're goin' down, we'll take all the rest of you with us!"

 

[skykid]

Surprise, surprise.

It's United and USAir starting the fare sale!

Oh the joys of being bankrupt. "If we're goin' down, we'll take all the rest of you with us!"

Again, 1 minute of research might be helpful. United is putting Tuesdays and Wednesdays on sale April-early June with a gazillion other restrictions. The sky is falling! Suicide, Suicide!! Predatory pricing!! This will have a gigantic impact on the industry for years to come! Think of it, Tuesdays and Wednesdays! The horror.

 

[labbats]

Skykid, I realize your point, but you have to realize ours.

 

[Hoot R. Hunter]

Welcome to the CRAAPA wimp-line for Tuesday, 8 March. I have been receiving many whine-o-grams concerning the recent fare increases. I need to take a moment to remind our members that with our flea-like intellects, our focus needs to remain on flying and conceding. Let’s trust our executives to worry about the complicated stuff like revenue and yield management. While the company’s projected huge first quarter losses are, on first glance, somewhat disturbing, I’m here to tell you that nothing could be further from the truth. In fact, I was in the company limo with the boss just the other day. After I got done unloading the luggage for him and his family, he told me the Takeaway plan was on track. By taking money from the pilots and turning around and using it to secure the futures of the senior staff, the company has ensured the continuity of its management team. This team will be critical to the survival of the company during bankruptcy proceedings. Needless to say, I breathed a sigh of relief after hearing this good news.

My fellow national officers and I have been unfairly accused of having no fallback plan. Nothing could be further from the truth. Our Concede It/Save It campaign has worked thus far. Rest assured, we will not engage in the folly of employee equity, no matter how much we money pour down the company crapper. Now with losses projected at $15,000/per pilot/per month, it is time to commence with the Secure Higher Income Tomorrow program or $HIT for short. This will require some short-term adjustments to our working agreement. Since time is of the essence and because 70% of the membership will follow me into the slaughterhouse on any given issue, no voting will be required. Here are some of the highlights of $HIT:
1. Effective immediately, pilots will work without compensation. This should cut the monthly losses to more manageable levels and still allow our members to proudly tell mommy, daddy, wifey, and the kids that “I’m still a jet airline pilot”. The intrinsic value of this alone is priceless.
2. We will tirelessly lobby the flight attendants and mechanics to see if they will be willing to give up a buck or so an hour. Not likely, but we will press forward with this initiative. Please use your exalted status as an airline pilot to help. As you are proceeding to your deadhead seat in coach, please pause and speak to your deadheading FA’s who are comfortably settling into their seats in First Class on the importance of this issue.

We are also initiating a companion program called NO $HIT (National Officer Secure Higher Income Today) for your ASSociation leadership. Since we are up to our necks in $HIT, we are severely limited in our ability to waddle up to the trough. Therefore, it is only fair that we be compensated at 100 hours per month, naturally at triple 7 rates.

Please remember these actions are for your own good. Now when I walk thru operations and hear you say that I have $HIT for brains, I can proudly respond, “Yes, I do”.

That’s all for today, please stop calling.

 

[NTS ALL 4]

Welcome to the CRAAPA wimp-line for Tuesday, 8 March. I have been receiving many whine-o-grams concerning the recent fare increases. I need to take a moment to remind our members that with our flea-like intellects, our focus needs to remain on flying and conceding. Let’s trust our executives to worry about the complicated stuff like revenue and yield management. While the company’s projected huge first quarter losses are, on first glance, somewhat disturbing, I’m here to tell you that nothing could be further from the truth. In fact, I was in the company limo with the boss just the other day. After I got done unloading the luggage for him and his family, he told me the Takeaway plan was on track. By taking money from the pilots and turning around and using it to secure the futures of the senior staff, the company has ensured the continuity of its management team. This team will be critical to the survival of the company during bankruptcy proceedings. Needless to say, I breathed a sigh of relief after hearing this good news.

My fellow national officers and I have been unfairly accused of having no fallback plan. Nothing could be further from the truth. Our Concede It/Save It campaign has worked thus far. Rest assured, we will not engage in the folly of employee equity, no matter how much we money pour down the company crapper. Now with losses projected at $15,000/per pilot/per month, it is time to commence with the Secure Higher Income Tomorrow program or $HIT for short. This will require some short-term adjustments to our working agreement. Since time is of the essence and because 70% of the membership will follow me into the slaughterhouse on any given issue, no voting will be required. Here are some of the highlights of $HIT:
1. Effective immediately, pilots will work without compensation. This should cut the monthly losses to more manageable levels and still allow our members to proudly tell mommy, daddy, wifey, and the kids that “I’m still a jet airline pilot”. The intrinsic value of this alone is priceless.
2. We will tirelessly lobby the flight attendants and mechanics to see if they will be willing to give up a buck or so an hour. Not likely, but we will press forward with this initiative. Please use your exalted status as an airline pilot to help. As you are proceeding to your deadhead seat in coach, please pause and speak to your deadheading FA’s who are comfortably settling into their seats in First Class on the importance of this issue.

We are also initiating a companion program called NO $HIT (National Officer Secure Higher Income Today) for your ASSociation leadership. Since we are up to our necks in $HIT, we are severely limited in our ability to waddle up to the trough. Therefore, it is only fair that we be compensated at 100 hours per month, naturally at triple 7 rates.

Please remember these actions are for your own good. Now when I walk thru operations and hear you say that I have $HIT for brains, I can proudly respond, “Yes, I do”.

That’s all for today, please stop calling.

PRICELESS!

No doubt from a slightly disgruntled, furloughed ALPA member.

 

[TAZ MAN]

PRICELESS!

No doubt from a slightly disgruntled, furloughed ALPA member.

No doubt. Unfortunately with too much time on their hands.

Outstanding!!

 

[skykid]

Skykid, I realize your point, but you have to realize ours.

I realize your point. However, I think your point is long on rhetoric and short on supporting information. United's sale is for April -early June, and is for Tuesday and Wednesday flying domestically, with other restrictions that are too numerous to write here. Do you really think the government should get involved to save the rest of the industry from this? the idea that someone who calls himself an analyst actually calls this suicide is incredible. There are going to be a lot of empty seats Apr-early June on all airlines. Its hardly suicide or "unfair" pricing to try and sell some midweek seats during that timeframe that would otherwise go empty. These sales have very limited success because of the short notice time frame, numerous restrictions, and midweek requirement. Retired people are about the only demographic than can take full advantage.

Now, U's sale is a little bit different. I suppose you haven't read their terms either.

 

[Dizel8]

"Do you really think the government should get involved to save the rest of the industry from this?"

Well, one could argue, that in the case of U, it is indeed the goverment helping the rest of the "fleet" sink. The only reason U is around, is due to the ATSB loan, mind you, the goverment keep changing the agreement every time U does not make the "numbers".

So essentially we have a goverment subsidized carrier (U) thrashing ticket prices. For some odd reason, that does not sit well with me.

 

[miles otoole]

This might help raise revenue

Enhanced CRJ900 Adds Value for Operators
(3/4/2005)
Bombardier Aerospace has significantly enhanced its CRJ Series with the introduction of an upgraded Bombardier CRJ900 aircraft, offering important new benefits to operators.
The upgraded CRJ900 aircraft combines substantially improved take-off and landing performance and increased range. In addition, the jetliner now provides lower fuel consumption.

The enhanced CRJ900 aircraft was developed to provide improved payload range capability from shorter airfields. The improved airfield performance will pay special dividends at airports that are constrained by field length, surrounding obstructions, or hot weather/high-altitude conditions.

'CRJ900 aircraft flying from such airports will be able to take-off at a higher aircraft weight and thus carry more revenue-generating payload,' said Rod Williams, vice-president, Aircraft Programs, Bombardier Regional Aircraft. 'That, coupled with lower fuel consumption, can make an important difference to the operator's bottom line,' added Mr. Williams.

In addition to the performance improvements, Bombardier is launching a new Long Range (LR) CRJ900 aircraft variant which complements the existing Baseline and Extended Range (ER) aircraft.

'The Bombardier CRJ900 aircraft already had the lowest operating costs in its class of aircraft. The upgraded CRJ900 aircraft will bring these costs even lower,' stated Mr. Williams.