Jump in Air Fares?

[ualdriver]

The point is she will fly less at higher prices, people flying less will effect load factors. There is cause and effect in every economic action. Will 4 of those 10 seats be filled by a $400 fare to provide the revenue for that flight at 0600 on Tuesday? Things will not remain status quo. I not saying this is right or wrong.

I think the airlines are starting to realize that (well, at least most airlines except those like Virgin America). It almost seems as if the airlines collectively are starting to come to their senses and realize that $59 fares to grandma's or Disney aren't profitable. So except to compete with airlines like the aforementioned, they're starting to charge fares that actually will make a profit. Further, since they realize that means less people fly, they've stopped irrational growth and/or shrunk their fleets. Heck, even SWA is doing it. So maybe that Tuesday 0600 flight doesn't exist anymore in the future so they don't need to charge cheap fares to fill it. And maybe there are less $189 fares to ABQ and we're starting to see that.

 

[ualdriver]

There is cause and effect in every economic action.

True. Which is why maybe the stores near your wife's house will be happy! Maybe now that she can't find $189 airfares, she'll feel bad for not wanting to spend 100 bucks more to visit her grandkids and instead buys them some toys and mails them to her grandchildren. Then the local store makes money they otherwise would not have made. So does the cargo aircraft that carries the toys to your grandkids. Maybe that store and cargo company need to hire more employees because less guilty grandmas are flying to visit their grandkids and are buying them presents instead. So maybe a cargo pilot flying job at UPS comes open for a furloughee because of increased cargo demand.

 

[pilotyip]

In the end the consumer of your services no matter what business you are in will determine the success of your business.

 

[ualdriver]

In the end the consumer of your services no matter what business you are in will determine the success of your business.

Yup, couldn't agree more. Market forces (i.e. what the consumer demands) are far more powerful than any union or CEO.

 

[dispatchguy]

In the end the consumer of your services no matter what business you are in will determine the success of your business.

That is very true, but if we do not price the product to where we can make a return on investment - then all the consumers dont mean anything if the airline, or the business, ceases to exist.

I mean, should we purposefully price our product to where we are loosing money every time someone sits on a seat?

The airline biz has been doing that long enough; lets hope that carrier managements have pulled their head out and have decided to price their product to where there is a little return on their costs. I mean, if it costs $375 to produce that seat out of ABQ, then what legitimate justification is there to sell it at $189???

You say you have limited resources; fine. But why should I lose $186.00 to put a butt in the seat??? I didnt know that airlines were in the business of charity.

 

[pilotyip]

The unknown

You say you have limited resources; fine. But why should I lose $186.00 to put a butt in the seat??? I didnt know that airlines were in the business of charity.

But what no one knows will there be more empty seats that could have made an additional $189?

 

[ualdriver]

But what no one knows will there be more empty seats that could have made an additional $189?

So what's grandma going to do? Stay home with you or visit the grandkids? We're all wondering.....

 

[pilotyip]

travel less

So what's grandma going to do? Stay home with you or visit the grandkids? We're all wondering.....

go 1/2 as often, we are on a budget.

 

[andyd]

and so are we. we are tired of subsidiing grandma's visit with our paycuts and pensions. i could care less if she see's the grandkids again....if it means that we have 60% load factors and are PROFITABLE. travel is NOT a right, it is a priveledge for those who can afford it WITHOUT my help. rant over....

 

[pilotyip]

Missing the point

we have 60% load factors and are PROFITABLE. travel is NOT a right, it is a priveledge for those who can afford it WITHOUT my help. rant over....

You are missing the point, that 60% LF will be on fewer flights because there will fewer passengers, fewer flights means fewer A/C, fewer capts, and fewer pilots. The question is, will the airlines be better off with an empty seat, or $189 to put a bottom in that empty seat. It my be that smaller airline industry will be more profitable, but who will be the first to give up market share for the good of the industry.