United Airlines sparks fare war

[Traderd]

http://money.cnn.com/2006/08/09/news/companies/airfares/index.htm

 

[Jonny Sacko]

idiots!

 

[32LT10]

idiots!

That is what we said about NWA and DL back when we were trying to get fare increases through.

 

[FR8mastr]

idiots!

That is the exact word for it!!
The Airlines are just now finally starting to squeez out tiny profits for a quarter, only 1 quarter and now they are cutting their own throats again.

I couldnt say it any better

IDIOTS

 

[Saabslime]

I guess they didn't get enough concessions their first go-round in bankruptcy so they need to go back and try again......:angryfire

 

[PHXFLYR]

That is what we said about NWA and DL back when we were trying to get fare increases through.

So that makes it right? No wonder why you guys are referred to as the "brain surgeons"


PHXFLYR

 

[accinelli]

idiots!

Uniteds Yeilds on their Business Class are far higher and far more consistent than NW or DL. Smart move if anything.

 

[densoo]

Although counterintuitive, maybe they are cutting fares precisely because they're headed for BK again. DAL and NWA in the year before their BK illogically dropped fares (or didn't match fare increases by others) to attract more passengers because they were desperate for short term cash regardless of the longer term consequences. It may be a desperation move, akin to throwing cargo off a ship that is bound to sink. Or maybe not.

 

[Gorilla]

Yup, cash (flow) is king.

 

[Saabslime]

I smell a merger announcement very soon.........United never really came up with a viable business plan when they emerged from bankruptcy. Is that a white flag being raised and an S.O.S. for somebody to come save them I see on the horizon?

 

[PlaneDrvr]

"IDIOTS"? How long have some of you been in this Business????

That is the exact word for it!!
The Airlines are just now finally starting to squeez out tiny profits for a quarter, only 1 quarter and now they are cutting their own throats again.

I couldnt say it any better

IDIOTS

I rarely post on this message board, because I often 'question' the smarts of most of the people on here. EVERY YEAR, in August, airlines (started by one airline or another), begins an "airfare sale" ahead of the fall slow-down in air travel (typically, the slow time of the year), from Sept. to Nov.

This is done "Every" year, to fill seats that would normally go empty, as I said, traffic normally slows down after the "summer travel season." The object is to put 'warm bodies' in empy seats and money in the bank; for seats that would normally be vacant.

With "yield management," which many airlines have gotten much better at, airlines will actually generate more 'revenue' than they would if the seats flew empty. And, by limiting the seats available at 'sale prices,' the airlines can 'guarantee' that there will be a warm body in the seat, instead of flying an empty seat around.

Also, as an added benefit, if you have someone who is willing to 'pay up front' and guarantee the seat will be filled; the airline gets their money (paid), for a flight a month or two or three in advance. Therefore, the airline has the passenger's money, for a month (or two, or three), in advance, for a seat that would probably go empty without the 'discounts.' It is like an "interest free" loan (money in the bank), from the passenger.

Also, read the article (the entire article) at the beginning of this link; as it states, "the sale lowers leisure fares 4 to 8 percent, while last fall the fare sale cut about 10 percent off prices." So the 'discounts' are significantly 'lower' than even last year!!

I guess that many pilots here would rather their companies fly around 'empty seats' and make 'less revenue' the they could have. Duh!!!!

DA

 

[PHXFLYR]

I rarely post on this message board, because I often 'question' the smarts of most of the people on here. EVERY YEAR, in August, airlines (started by one airline or another), begins an "airfare sale" ahead of the fall slow-down in air travel (typically, the slow time of the year), from Sept. to Nov.

This is done "Every" year, to fill seats that would normally go empty, as I said, traffic normally slows down after the "summer travel season." The object is to put 'warm bodies' in empy seats and money in the bank; for seats that would normally be vacant.

With "yield management," which many airlines have gotten much better at, airlines will actually generate more 'revenue' than they would if the seats flew empty. And, by limiting the seats available at 'sale prices,' the airlines can 'guarantee' that there will be a warm body in the seat, instead of flying an empty seat around.

Also, as an added benefit, if you have someone who is willing to 'pay up front' and guarantee the seat will be filled; the airline gets their money (paid), for a flight a month or two or three in advance. Therefore, the airline has the passenger's money, for a month (or two, or three), in advance, for a seat that would probably go empty without the 'discounts.' It is like an "interest free" loan (money in the bank), from the passenger.

Also, read the article (the entire article) at the beginning of this link; as it states, "the sale lowers leisure fares 4 to 8 percent, while last fall the fare sale cut about 10 percent off prices." So the 'discounts' are significantly 'lower' than even last year!!

I guess that many pilots here would rather their companies fly around 'empty seats' and make 'less revenue' the they could have. Duh!!!!

DA

No,not really...I just want my company and others out there to charge a fare that will cover the cost of moving Joe Six Pack and his family from one end of the country to the other. No more "free rides". We are being forced to susidize this with inadequate pay,work rules and loss of retirement for for those of us who were lucky enough to have one to begin with. I say no more. It is time for these alleged airline "managers" to show some fiscal responsibility ,don't you think?


PHXFLYR

 

[Andy]

idiots!

Have you bought a ticket lately? In just about every city pair, you'll find that United charges a premium over other carriers. Sometimes a substantial premium.
As a furloughed UAL pilot, I'd like to give most of my business to UAL, but that's not always possible. I fly UAL a lot for my current job and have Premier Exec status, so the perks for me are better if I buy a UAL ticket for leisure travel.
Two examples:
My wife was looking at midweek tickets from Washington DC area (IAD, DCA, BWI) to HNL roundtrip. The lowest UAL fare was more than $200 higher than American. She started pricing tickets a month out and finally went with American.
I've been looking for Washington DC to COS roundtrip in late Sep. UAL's fares were $150 more than Northwest. With this fare sale, the ticket was $100 more expensive. I bought the more expensive ticket on UAL. Econ Plus, upgrades to F, etc, make it worth the extra coin. But $150 x 2 was around my breaking point.

I suggest that you spend a bit of time on sidestep.com comparing airfares. Based on comments from other frequent flyers, I suspect that you will have similar results (UAL's tickets are priced at a premium to other carriers).

 

[FlyBoeingJets]

idiots!

I'll reserve my judgement until the end of the quarter.

Then we'll see who the "Idiots" were.

Airlines Continue to Look Overseas
Tuesday August 8, 3:19 pm ET
By Stan Choe, AP Business Writer Airlines Continue to Look Overseas in July

NEW YORK (AP) -- The nation's biggest airlines continued to shift their focus overseas in July, pulling seats from the domestic market and putting them on more profitable international routes, according to carriers' most recent traffic reports.


Overall domestic capacity of the six biggest traditional hub-and-spoke carriers fell 6.4 percent in July, while their international capacity grew at a 6 percent clip. The continued trend means international routes now make up over a third of the big six's total capacity, up to 36 percent from 33 percent a year ago.

Airlines have long been talking about the need to reduce domestic capacity. By limiting the number of available seats, carriers gain pricing power to raise fares and offset their persistently high fuel costs.

The industry has already imposed seven widespread ticket increases over the past 12 months, thanks to limited capacity, Cathay Financial analyst Susan Donofrio wrote in a recent research report. Typically, the industry can manage only four or five.

High gasoline prices, which are driving the cost of long-distance driving closer to the cost of flying, and continued flat domestic airline capacity should allow for even more fare increases through the year, Donofrio said.

The sharpest declines in July domestic capacity came from carriers currently in or fresh out of Chapter 11 bankruptcy protection, where companies have more ability to return planes to lessors.

Delta Air Lines Inc. said it trimmed its July domestic capacity by 12.6 percent. Northwest Airlines Corp., the second major U.S. airline in Chapter 11, reported an 11.8 percent drop in domestic capacity. US Airways Group Inc., which exited bankruptcy last year, said its July domestic capacity fell 10 percent.
AMR Corp. subsidiary American Airlines, which has remained out of bankruptcy, said its July domestic capacity declined 7.6 percent.

The outliers were United Airlines' parent UAL Corp. and Continental Airlines Inc. United, which exited Chapter 11 earlier this year, said its July North American capacity grew 3.6 percent, while Continental had the sharpest percentage growth in domestic capacity at 5.9 percent.

Internationally, four of the big six reported capacity gains. Only United and Northwest reported declines. United's fell less than a percentage point, while Northwest's dropped 8 percent.

Some of the strongest gains were by Delta, which grew its international capacity by 31.8 percent.

During July, Delta bought the authority for nonstop service between New York and London in a deal worth up to $21 million and announced increased service to the Dominican Republic and Trinidad and Tobago.

Overall, the strongest gains for the big six were in European and Latin American routes. Capacity to Asia declined 1.5 percent compared with last July.

Carriers, though, have recently been showing more of an appetite for service to China. American Airlines in July said it's seeking permission for a second route to China, hoping to offer daily nonstop service between Dallas and Beijing beginning in March.

Outside the big six, low-fare airlines -- which generally fly only domestically -- have been adding capacity.

Southwest Airlines Co. said its July capacity grew 7.9 percent, while JetBlue Airways Corp. reported a 20.8 percent gain.

 

[FR8mastr]

I rarely post on this message board, because I often 'question' the smarts of most of the people on here. EVERY YEAR, in August, airlines (started by one airline or another), begins an "airfare sale" ahead of the fall slow-down in air travel (typically, the slow time of the year), from Sept. to Nov.

This is done "Every" year, to fill seats that would normally go empty, as I said, traffic normally slows down after the "summer travel season." The object is to put 'warm bodies' in empy seats and money in the bank; for seats that would normally be vacant.

With "yield management," which many airlines have gotten much better at, airlines will actually generate more 'revenue' than they would if the seats flew empty. And, by limiting the seats available at 'sale prices,' the airlines can 'guarantee' that there will be a warm body in the seat, instead of flying an empty seat around.

Also, as an added benefit, if you have someone who is willing to 'pay up front' and guarantee the seat will be filled; the airline gets their money (paid), for a flight a month or two or three in advance. Therefore, the airline has the passenger's money, for a month (or two, or three), in advance, for a seat that would probably go empty without the 'discounts.' It is like an "interest free" loan (money in the bank), from the passenger.

Also, read the article (the entire article) at the beginning of this link; as it states, "the sale lowers leisure fares 4 to 8 percent, while last fall the fare sale cut about 10 percent off prices." So the 'discounts' are significantly 'lower' than even last year!!

I guess that many pilots here would rather their companies fly around 'empty seats' and make 'less revenue' the they could have. Duh!!!!

DA

I see your point, if they could only get the load factor up just a couple more numbers all would be well. We also have history to back that up. Increasing load factor by lowering fares has really been working out for the airlines these last 7 years.