How does Virgin make a profit on $39 fare???

[pilotyip]

Alllocated Fixed Cost

Step back from the matter and ask yourself if flying on those same Tuesdays and Wednesdays at a loss is really necessary. Cut the flights to equal profit via an established minimum price per flight and let the chips fall where they may. The only real disadvantage from a pilot perspective would be having mainly Tuesdays off, yet that would be outweighed by being paid as good or better than those of a previous generation.

You can not park an asset on which you are making payments, lease, insurance and fixed calendar inspections, every hour it does not fly is an additional allocated fixed burden upon the rest of the flying you are doing. If you covered fixed plus a portion of variable, you come out ahead in spite of loosing a little on low yield days. Managerial Economics 101. Again if anyone has the answer, why don't they come into management and make it better.

 

[tomgoodman]

Negative customer training

Selling a few seats below cost made sense before the internet era of complete "fare transparency". As pilotyip says, a little revenue was better than no revenue, and you would still get your full-fare passengers later on. The problem now is that the widely-known existence of cheap fares has created great customer resistance to paying full price at any time. We have a self-created marketing problem, and I do not see a solution.

 

[RiddleEagle18]

Its funny because everyone thinks this is a problem for US Pilots. We are looking at this from our perspective. I get it this is an airline pilot forum.

Think about the overall impact higher fees would have on this country. Airline tickets have plummeted and so the average person can affrod to travel on airlines. The average citizens life has improved. Better mobility, faster travel, the ability to live in a different city and still maintain meaningful relationships with family. Companies can send employees greater distances, and more often to go secure the deal. Is air travel better? Not for the folks in coach but now they can actually afford it. If you want coach treatment from regulation days, you can buy a first class ticket for the same, adjusted for inflation, price. The premium product still exist but the advantages of airplane travel are now available to everyone.

Now repeat this throughout our entire economy. We are all more than happy to reap the benefits of a free economy throughout the rest of our lives.

Regulation(Government interference) in the form of price fixing, which is what you are suggesting is a jobs destroyer and a QOL destroyer on a macro scale. (US Population)

Im not saying all regulation is bad. Regulation to prevent price fixing among the airlines themselves is needed. Regulation is needed in the forms of public safety such as maintance standards. Some on that extreme would even argue thats not needed because an airline that crashes airplanes will natuarally be elminated from the market place. Im not willling to go that far.



Different Topic refering to not flying on tuesday and wednesday.
This is why allegiants buisness model has been succesfull. There airplanes are not leased or financed. The airplanes are payed in full and such can sit on tuesday without incurring a cost






Side note, this is the solution to Health Care as well. Free the market place to sell insurance across state lines increasing competition. Competition afterall is what the Democrates keep screaming. Free the market and watch prices plummet.

 

[pilotyip]

Yea we have to remember many of these pax buying low-fare tickets may elect not to travel at higher prices. They may also elect to use alternate forms of transportation such as driving, taking a bus, or car pooling, such as going to a bowl game in Florida from Atlanta. This is an economic decision to be made by the individual ticket buyer. The marginal rate of ticket price elasticity may not be exactly known. But it is there. I remember SWA raising their advance purchase tickets price last spring, they could not hold the higher price and had to revert to the lower prices within a couple weeks.

 

[CaptSeth]

Difficult situation to be sure. My feeling is some sort of re-regulation is necessary. There is no reason why airlines should be undercutting each other at prices far below cost in the hopes of driving them out of the marketplace or relying on below-market labor costs to finance inept pricing strategies.

I believe we know enough about segment costs from required DOT reporting to come up with a formula for a regulatory minimum fare per segment. That might do the trick

 

[pilotyip]

but?

Difficult situation to be sure. My feeling is some sort of re-regulation is necessary. There is no reason why airlines should be undercutting each other at prices far below cost in the hopes of driving them out of the marketplace or relying on below-market labor costs to finance inept pricing strategies.

I believe we know enough about segment costs from required DOT reporting to come up with a formula for a regulatory minimum fare per segment. That might do the trick

But what about the people buying fares that elect not to fly anymore because the price is too. As stated above, if prices rise there will be a fall off in pax, means fewer flight, fewer pilots, but the senior guys who hold on to thei rCapt's seat, well they might make more money at the expense of 75% of the pilot workforce. One of those unintented consquence things

 

[Pogue Mahone]

Step back from the matter and ask yourself if flying on those same Tuesdays and Wednesdays at a loss is really necessary. Cut the flights to equal profit via an established minimum price per flight and let the chips fall where they may. The only real disadvantage from a pilot perspective would be having mainly Tuesdays off, yet that would be outweighed by being paid as good or better than those of a previous generation.

If this fella starts an airline I would recommend shorting the stock.

 

[chperplt]

How was the flight?

The flight was great! Airplane was very comfortable and quiet. In flight entertainment was top notch, and both the cabin and cockpit crews were outstanding.

 

[clickclickboom]

They don't have slots at JFK so I don't think B6 are too worried

Fadec dont be so sure..

Two things will happen

VA will continue to bleed out, the credit markets will continue to dry up and they will fail

OR

They will limp along barely making money as they slowly enter new markets.

The best for competition is for them to fail but dont be so sure. They probably would have collapsed by now but they have not.

If jetblue was smart they would offer the va investors a nice 100 million profit, assume the debt, get the va pilots out of the " yes I love tea bagging " uniforms, and into the " yes my blue shirt makes me look like a dousche-bag" uniform, paint the tails blue and use the 28 or so planes to hit the west coast relentlessly.

JB can pay it now or slowly pay it over time like a cancer that eats away at you.

Everyone knows I am a VA hater so redwood guys take this as a compliment. Just calling it how I see it.

PS: I heard that branson buys empty seats through a travel company to increase revenue..? ( sorry couldnt help myself

 

[rigger]

PS: I heard that branson buys empty seats through a travel company to increase revenue..? ( sorry couldnt help myself [/QUOTE]


And thats why Branson will indeed make it, out of the box thinking.....what a great idea!!!