PSA and piedmont

[FMEpilot]

You comparing low fees at CLT to $1.50 increase at HHH is beyond comprehension. I mean, we could get into the number of daily flights out of CLT, the fact that other carriers serve CLT, etc. The airline industry is clearly much more unique then you think. Yes basic economic principals apply, but I will state for fact, increasing a fare by $1.50 in a market like Hilton Head would not change demand.... the price of a round trip tank of gas to SAV..maybe. If the island wants it and US Airways wants to continue to serve it, it'll happen.

 

[WSurf]

Hilton Head is one of if not the highest yield airport at airways. You could increase prices and demand won't fall. You stand in line at the ticket counter and watch how many people are on first name basis with the gate agents. Not saying Airways won't pull out, but it's a gold mine for them.

 

[cheapgreek]

Totally unsure what HHI is, but as an operator in and out of HHH/HXD in the Dash for PDT, I sure found Parker's words about DFW-HHH fascinating. A runway extension isn't necessarily as important as tree cutting, as far as direct operational impact. The terminal can't handle an E175 as a taxi in and turn out, and I doubt the taxiways can (trees, yet different reasons). Either way, the island hates the idea of runway extension and/or cutting trees. Plenty of boredom fodder if you look for it on google regarding this issue.

What was the title of this thread?

Oh yeah. PDT/PSA merge. Whatever. It'll be a bloodbath if it happens.

Trees were cut last year and the 4300 foot runway shows 300 foot displaced thresholds on both ends. The plan is to extend the runway in two stages, first to 5000 feet and then 5400 feet. Why in two stages beats me, do it once and be done with it. Delta and the SaabA340 were weight restricted to 21 seats and at times the dashes are also weight restricted.
Its a good market with yearly boardings the last few years around 60k.
As far as the locals, every airport has small group that feel it is their duty to oppose any project with the words "airport" and "expansion" in it.
At 5400 feet with clear approaches, RJ's to CLT and with Delta to ATL, both hubs within 300 miles away should work and that would be about all the airport would need. Look what is done at Key West with a 4800 foot runway.
When a customer buys a ticket to Hilton Head, they should be able to fly to their final destination and not in another airport in another state.

 

[cheapgreek]

Rumor is they are going to merge. Starting nov. park one 200 and one dash, and add two 900's to birding fleet combined to 89 aircraft.

906 has been parked, in October 908 will reach cycle limits and in December so will 907. I don't know if any other Dash's will time out in 2014, if anybody knows, please reply.

 

[FMEpilot]

2-4 if I recall correctly.

 

[kf4amu]

Anyone who says US could increase prices and demand would not fall "because it's hilton head" obviously has no economic or business experience.

 

[FMEpilot]

Obviously you're incorrect. In all aspects of your last statement.. SC and SC vaction destination economics or difficult to reach vacation destinations with higher then natl median income average economics... not your strong suit. To make HH accessable to greater then 2 destinations, the airport authority and island town council will authorize an increased boarding fee with lcc's aporoval. To say otherwise is just naive.

 

[kf4amu]

Obviously you're incorrect. In all aspects of your last statement.. SC and SC vaction destination economics or difficult to reach vacation destinations with higher then natl median income average economics... not your strong suit. To make HH accessable to greater then 2 destinations, the airport authority and island town council will authorize an increased boarding fee with lcc's aporoval. To say otherwise is just naive.

LCC's approval has nothing to do with an economic principle. They may be able to increase yield by decreasing costs through higher load factors after the runway extension etc. If that encourages competition it will increase the price sensitivity that passenger have. Sure the AA and Island council may want it but that has nothing to do with a basic price and quantity curve.

But to say that Hilton Head is a "difficult to reach destination" is laughable. I just pointed out SAV is 45 minutes away.

Only in ya'll's world does a Price/Quantity curve level off for at least $1.50 "because it's hilton head".

 

[FMEpilot]

The incredible lack of common sense is getting old. Enjoy the HAM radio, perhaps you can get someone to agree with you on Guam.

 

[kf4amu]

The incredible lack of common sense is getting old. Enjoy the HAM radio, perhaps you can get someone to agree with you on Guam.

The only thing that doesn't make sense is the idea that customers don't have price sensitivity, especially to a leisure destination like HHH with a much cheaper airport 45 minutes away.

Stop playing amateur economist and go run a business. You'll quickly find out how price sensitive customers are.

 

[BoilerUP]

The real world does not always play out the way an Economics textbook says it should.

 

[cheapgreek]

Anyone who says US could increase prices and demand would not fall "because it's hilton head" obviously has no economic or business experience.

Its somewhat like the DCA commanding higher fares than IAD and BWI. DCA is in the heart of DC whereas IAD is in Virginia and BWI is in Maryland, both a good distance away from Washington. The fare to HHH can rise slightly and not diminish demand as people will pay a slightly higher fare to fly into their final destination.
We are not talking about walmart and kmart and pricing on everyday goods and flyers do not consider a small fare increase a factor when buying airline tickets, with them, its all about convenience.

 

[cheapgreek]

You are mistaken that they do not. Maybe only one person out of 1000, but the price/yield/revenue relationship is pretty standard among all products with elastic demand.

Its not the same with airline tickets. Buying retail is much different than airline tickets which are not products but a service and flying to ones final destination without landing in another state is worth a small increase in fares, it happens all the time with airports in high value areas.

 

[FMEpilot]

Soooo when are we merging again?

 

[kf4amu]

Its not the same with airline tickets. Buying retail is much different than airline tickets which are not products but a service and flying to ones final destination without landing in another state is worth a small increase in fares, it happens all the time with airports in high value areas.

First, airline tickets are products. They are referred to as products constantly. "We provide a good product" etc.

Second, I agree with your point that the convenience factor will command a higher fare vs another less convenient airport, but that isn't the topic of discussion. The discussion was whether an increase in ticket price from current price level will affect demand. It will, and HHH is not immune from that economic law.

 

[WSurf]

The only thing that doesn't make sense is the idea that customers don't have price sensitivity, especially to a leisure destination like HHH with a much cheaper airport 45 minutes away.

Stop playing amateur economist and go run a business. You'll quickly find out how price sensitive customers are.

It's been like that for years. SAV has always been cheaper then Hilton Head. People want to pay the extra money to fly right too the island! We used to have 14 flights a day from CLT to HHH. Each flight full during the summer. Those people could easily go to SAV and save a couple hundred bucks. But for people with money it isn't worth it.

 

[cbrown1]

well you figure if you rent a car from sav it would cost more than to just fly into to the island and stay there without a car.

 

[cheapgreek]

First, airline tickets are products. They are referred to as products constantly. "We provide a good product" etc.

Second, I agree with your point that the convenience factor will command a higher fare vs another less convenient airport, but that isn't the topic of discussion. The discussion was whether an increase in ticket price from current price level will affect demand. It will, and HHH is not immune from that economic law.

When that phrase is used, " "We provide a good product", that refers to the service provided such as on time performance, convenient schedules, inflight service, frequent flyer programs. etc. When a flight departs with empty seats, no product was lost, but money was lost by not selling a ticket for that flight. Seats are a perishable commodity. Once the plane leaves, they can not be sold.
A small increase in fares will not affect demand for in this case the higher fare results in less ground time in reaching the final destination.
The fact that around 60k per year choose to bypass lower fares at SAV in favor of HHH proves that price will not deter demand. Economics 101 does not apply to the airline business.

 

[kf4amu]

The fact that around 60k per year choose to bypass lower fares at SAV in favor of HHH proves that price will not deter demand. Economics 101 does not apply to the airline business.

Stop comparing SAV to HHH. That's not the topic. The topic is a reduction in demand just to HHH when the price of the ticket increase.

And yes, economics 101 applies to the airline business, even HHH as much as you don't want to believe it.

 

[cheapgreek]

Soooo when are we merging again?

When Piedmont and Allegheny merger some years ago, it made sense since they both flew the same aircraft. With Piedmont flying Dash-8's and PSA flying RJ's, what savings will result? You can't service an RJ in ROA or SBY without doubling up the parts inventory at all the bases.
It might result in a few layoffs at the management level, but aside from that, what savings will make the merger pay off?