Expert calls latest round of fare sales 'economic suicide'

[capt. megadeth]

I feel I have been subsidizing (with my paycheck) cheap airfare for last 5 years!

I agree.....we all have (except for managment of course) Sad but true.

 

[canyonblue]

Predatory pricing? Lets see, its ok for JB AT or SW sell/give tickets away for 39 bucs, but if a legacy carrier does it.. Stop the presses its predatory pricing.

If a business can make money by charging above the cost of the product ,then it's acceptable. If a business cannot make money at the same price but chooses to sell below cost, then it's insane and they will go out of business soon. (Except in the airline industry)

 

[FR8mastr]

I am assuming from your avatar you are SW. So you know that nobody with an airplane could make money charging $39 per ticket. As a pilot you know the true cost of moving all that aluminium around. The reality as we know is not all tickets are 39. SW has done the best marketing job I have ever seen, People actually believe all the hype on pricing. Please keep in mind I am not bashing, I wish my airline had a fraction of the management team yours does. The point being, that pricing, $39, is a gimmick to get the people in, but when the legacy's would do that all heck was raised about predatory pricing. Well why not now? that is the only point I was trying to make.

 

[Snoopy58]

If you sold EVERY seat for $39, you couldn't make money. If you sell a FEW seats for $39 but the average is higher, you can. After all, 100 seats at $100 is less money than 100 seats at $100 and 20 seats at $39. SWA is pretty sharp with their fares, and the folks who make those decisions know what they're doing when they discount some number of seats, offer introductory fares, etc. It isn't about losing money, and the evidence doesn't really support a complaint that SWA is pricing seats the way they are & losing $ just so everybody else loses more.

There's a big difference between "predatory" (selling at a loss to cause some competitor pain) and pressing a competitive advantage (being able to make money at an average fare that is below somebody else's costs).

 

[FR8mastr]

Ok I guess I had it all wrong SW coming into PHL and Pit and the rest of the NE with "low introductory fairs" has nothing to do with Airways being in major trouble. I'm sure they would love it if Airways found a way to compete. Again I am not bashing SW but if you think they are not trying to kill off the competition, then I have some of that beach front property you may be interested in.

 

[Dizel8]

They may be hasting the demise, yes. However, unlike what has happened previously, SWA stays in their market and maintains a lower fare. When AA hastened the demise of say Vanguard, they pulled out once the deed was done. (No pun intended)

U is in trouble, but they are in essence being subsidized by the goverment and where it not for the ATSB agreeing to change the terms, they would be gone.

It is a dog eat dog world, the goverment needs to get out and let the chips fall where they may!

 

[Snoopy58]

SWA isn't losing money in the PHL market... that's the point. "Intro" fares are just like having some seats priced cheap for the leisure market but having the average fare high enough to cover costs: average fares for the 6 months will be enough to cover costs, even if initially there are a greater fraction of cheapies.

The point isn't whether SWA is "going after" US Air or not (although the argument has been made that they aren't trying to kill them, but simply positioning themselves to be where the best opportunities will be when U inevitably dies), but that they aren't losing money doing what they're doing. With the new "economic suicide" fares (yeah, it's a bit of hyperbole), U and UAL are losing money, even beyond what they already are. Wouldn't be such an issue if they weren't on the dole.

 

[canyonblue]

Again I am not bashing SW but if you think they are not trying to kill off the competition

We don't have to. They are doing a pretty good job of killing themselves.

 

[ATR-DRIVR]

We don't have to. They are doing a pretty good job of killing themselves.

THAT is a very true statement.