The End of Discount Airlines?????

[WSurf]

http://www.independenttraveler.com/resources/article.cfm?AID=662&category=13

 

[Publishers]

The end may not be so near. While they may have problems like the other carriers, they also remain relatively low in the cost structure. Furthermore, the big carriers died under pension contributions and work rules that are not quite as onerous on these carriers.
I think one reason that they have been successful is that they tend to look at a route as a profit center on its own while the bigger carriers that use the hub and spoke structure have a more difficult time of figuring out certain impacts on their systems. They have feed concerns that create timing issues in addition to filling long haul equipment.

 

[Dizel8]

I think the article would have been better titled: End of rock bottom, dirt cheap, less than greyhound airfares.

The cost of fuel and hence the cost of doing business has skyrocketed, yet the airlines have not raised fares to cover cost, something gotta give and as the article mentioned, a $20 fare increase is still one heck of a bargain, but it may mean the difference between making money and losing.

We have finally seen the airlines agree on raising fares, hopefully, we will not see another dumping of prices in the near future.

 

[starvingredtail]

The frequently very candid Mr. Neeleman "told an investor conference last week that JetBlue had set prices too high on top-end fares, failing to sell some seats, and too low on some bottom-end fares, selling out but at too low a price" . In other words, the cheapest fares were way too low, and the most expensive fares too high. Exactly. Put into hard numbers, Neeleman said that the airline had sold a lot of $69 tickets on their Florida routes, as well as a lot of $299 tickets. The average sale price, however, came out to $94-95, a price point at which the airline loses money on the flight. "We should have had more $129's and $139's," he said, according to thestreet.com. Which seem to me a perfect example of sensible, consistent, and reliable airline prices. (Neeleman's candor, and real-life examples, are almost astounding given the major/legacy airlines current lobbying onslaught against truth in advertising in the industry: A Move to Add Still More Fine Print to Advertised Airfares)

Is the author actually giving an example of a CEO who is actively breaking down results and then fixing problems? I thought the answer always ended up being that employees just gave up salary and benefits. I'm glad I work for this guy.