seafeye

we have already taken concessions. Our dollar is now worth 40% less than it was 10 years ago. How's that for a pay cut?
Inflation is killing the economy. But at least our multi trillion dollar dept is now worth less because of the devalued dollar.

nicholasblonde

Darned right...many people wonder why the European carriers aren't laying off en masse as we are here in the US...three reasons:

1) When you calculate in the devaluation of dollars vs. the euro (all oil is sold in US dollars the second it comes out of the ground in Saudi Arabia), fuel has only gone up 25% in the EU vs. 40-50% in the US over the same period.

2) The Euros have a transportation infrastructure and economies that are structured around high fuel prices, since they tax the heck out of energy to limit consumption.

3) Fares over there (with the notable exceptions of Ryanair, Easy, and a few others) are where they should be, and companies like BA and Lufthansa have had success "selling up" and offering excellent customer service and amenities, vs. everyone here whoring themselves out to people who would've been on a Greyhound less than 15 years ago.

Send the Greyhound people back to the bus, and jack up fares (but offer better service and real food on real plates). If we're going to cut capacity so much anyways, we might as well upsell our product lines and get rid of the economy travelers who demand their $50 flight to Lauderdale to take their obnoxious family to Grandma's retirement village.

Pontius Pilot

When I was a child (late 70s and 80s) I remember people still dressing nice to go fly. It was not a cheap experience. You worked hard to get the money to go on a trip. You were proud to be able to afford the luxury of flying somewhere. Now you walk through the airport and it looks like a sleepover party. People in pajamas and flip-flops, ratty clothes - stuff I would be embarrassed to be seen in out in public. Anybody who has $100 can get on a plane. It has become the Greyhound of the 21st Century. Pilots get paid on a bus driver's level and treated with about the same level of respect.

I agree that we need to jack ticket prices up to a higher level...but also increase/return the amenities that used to be there. People will pay more for a better experience...just not as many of them. You cannot...and I repeat cannot compete on price alone in ANY industry. You have to offer something else otherwise someone will always come around and undercut you to get the sales. That is exactly what has been happening in our industry. Shave $10 off the price of a ticket and get 20 more passengers. If people bought cars and houses like they currently bought airline tickets they would all drive Chevy Aveo's and live in used FEMA trailers. Something has to give. I still think the word "cheap" has a negative connotation for a good reason. The industry has been doing quantity of passengers over quality for far too long...and it shows.

Another thing I notice -- how many airlines do you actively see trying to build a recognizable brand that people will commit to? I've only seen a handful of airlines advertise on television with decent commercials - nothing like they used to be. And no, "American Airlines is the official airline of the Oprah Winfrey show" does not cut it. Tell me why your airline is different and why I should pay the few extra dollars to fly it. Build a brand for me, give me a compelling reason to fly with YOU! I flew Continental a few years back and had such a positive experience and felt strongly about the company - I was willing to pay $50 extra for a ticket just to fly Continental! Its the same reason people pay $30 for an Abercrombie t-shirt rather than a $5 Wal-Mart t-shirt. What do you get in a Lexus that you can't have in a Hyundai? What is the difference between a Timex and an Omega? Brand and brand loyalty. The feeling you're getting something extra for your money. Crummy frequent flyer programs aren't enough...give people something COMPELLING! Bigger seats, meals, better service. Until someone is sucessful in this people will continue to fly the "other" airline to save 52 cents.

But I digress...

BZNpilot248

Bingo - I've wondered this too. Marketing can be pretty fascinating at times. I know people that have fierce brand loyalty simply because they like their color, logo, slogan or whatever. People will go to great lengths and pay extra for companies they like simply because of good advertising. Who can forget the "Come fly the friendly skies" ad campaigns with Gene Hackman for United? I was pretty young to even remember that but I'd venture to guess they sold a lot of tickets that way. I think a good TV ad campain would bring in a lot more dollars than would be saved by charging for first checked bags, deleting in flight entertainment and premium service etc and all the negative publicity that brings as well. There are many more ways to bring in paying customers than crappy milage programs and a 5 dollar discount over brand X. Execs seem to have missed that mark and think that money is better spent on their annual bonus - heck they have a golden parachute anyway if their other "brilliant ideas" fail.

cfii2007

Probably because product differntiation does not matter anymore.

Consumers are more motivated by price, than anything else.

tomgoodman

Bob Crandall claims that all of these things have been tried repeatedly, without success. Passengers say they'll gladly pay more for such items, but then book away for a cheaper seat. Just a few years ago AMR tried again, removing a couple rows of seats to increase legroom and advertising this widely. The result? Load factors hardly budged and revenue plummeted, causing them to replace the seats.

Pontius Pilot

I'm going to politely disagree on this just a bit. Yes many people seem to shop around for the cheapest price on things...but usually things that they don't value much. For example maybe you buy the cheapest toothpaste you can find, or a laundry basket, etc. But most people will pay more for something they do value. Look at how many people pay $5 for Starbucks products (which has a strong brand image and loyalty), look at how many people buy Apple products (again, strong brand image and loyalty). Most people don't go out and buy the cheapest LCD television they can find or the cheapest car...because they value these things. The airline industry, by cutting fares so much, has caused the consumer to devalue air travel. To them its just the Wal-Mart of the air. The experience on most every airline is exactly the same as the other - crowded, $3 cookies, not on time, etc. People don't value air travel like they used to anymore. That needs to be reversed. I think reducing availability and increasing fares is a step in the positive direction. It needs to be less commonplace than it already is...but it needs to be compelling. People will spend more for something if they PERCEIVE they are getting more value for their money. Perception is their reality. If they think Starbucks coffee is the greatest thing on earth, no amount of $1 coffee from McDonald's is going to sway them. People aren't going to stop buying Apple products because "dude, they can get a Dell" for $500 less. An airline needs to work hard on the perception of value for the money, branding and loyalty. Just paying lip service to it and not doing it will not change a thing.

American companies tend to look for the overnight innovation - something that will revolutionize their business overnight. If it doesn't work in a few weeks they abandon it. How did Toyota get to be such a dominant force in the automotive industry? They make little changes, thousands of them in a year, small steps...and they continue to pursue and nurture them. Their idea of innovation is that tiny little steps will eventually produce a great thing. They listen to customers, managers and people working on the production line. The result is a product that is dominant and a brand that people will pay more for because of perceived value for the money. So we add something at a US airline and abandon it a month later because it didn't show any immediate return. This is not a good practice at all. Slow and steady wins the race!

I could continue, because this is something I've felt passionate about for a long time and spent a lot of time thinking about and researching. I'm highly interested in business...and it eludes me how companies that provide such a great service could be so inept at turning a decent profit!!!

cbire880

You've hit the nail on the head with a dark hidden problem in American management. That is exactly what happens when you become a slave to stock price and large fund investors. They want a quick ROI and if the stock doesn't budge, they bail for the next one hit wonder. That is how our market is structured. Unfortunately, it is resulting in the gutting of American industrial might in favor of financial fragility. The airline industry is only the most recent iteration.

BZNpilot248

I'm gonna go with Pontius pilot - I think people would notice a difference and have some loyalty with a good ad campaign. I've heard enough people complain about X airlines reputation or service that if someone had an effective enough ad campaign with a higher level of service there are enough upper middle class citizens that would pay the premium.

Besides wasnt the AA debaucle with the seats in response to Legacy Oneida Airlines that flew entirely first or business class configured DC-9s somewhere in Texas? (if my memory serves correct) It was a short lived startup that American made sure to defeat quickly. So yeah AMR lost money - but won the war. Legacy Airlines is no more. After that mission was accomplished the seats went back in.

mohaupt

Not really trying to bash Comair here but what did Comair do to DAL pilots when they started furloughing??? I call it... Karma?


Pontius Pilot
Well spoken.


PS just to clarify I dont want ANYONE to get furloughed, already two of my close friends are going to be out of a job (one is a 135 turbo prop operator!!).
Good luck to all

~m