2009 worst year on record for airlines

smigaldi said:
Gee and planes have been filled everytime I fly. Seems like the guys running the airlines have no clue on how to price their product.
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I had a ticket for San Diego to Boston flight for $109. How much does
the fuel cost for hauling 220 lb (with bags) from San Diego to Boston
on a 757?
 
smigaldi said:
Gee and planes have been filled everytime I fly. Seems like the guys running the airlines have no clue on how to price their product.
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Agree. Almost all of the airplanes I've been on recently have been full or close to full, but I've also gotten some pretty low pricing, not any more than it was 20 years ago for the same route.
 
Bob Noel said:
I had a ticket for San Diego to Boston flight for $109. How much does
the fuel cost for hauling 220 lb (with bags) from San Diego to Boston
on a 757?
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Fifty years ago, mom flew from NY to LA for $250. I think this hits the nail on he head:

smigaldi said:
Seems like the guys running the airlines have no clue on how to price their product.
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Well.

I got a quote of over $900.00 for a round-trip, DFW to CRP. It was way cheaper to fly the Bonanza. It's the AA "Based Here" pricing philosophy.
 
At least 4 trips last year for me...planes looked full to me.
 
kevin7500 said:
Yes! They would save the most by leaving all the seats empty never leaving the gate. Of course they wouldn't earn any money either.
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<sigh>

I should have asked: Wouldn't the airlines has saved money by
leaving the seat empty rather than charging less than the cost
of fuel to haul 220 lbs across the country?
 
Really?

Come on, of course the airlines have people who know very well how to set their prices. High executive salaries aren't the problem, either.

It's very difficult to make money as an airline, and not at all surprising that you would post huge losses during a recession. Business travel was extremely reduced last year and the airlines couldn't sell their premium products.
 
I agree: premium product usually means 'business' travel, which has been curtailed by greater than 50% in my company. The alternatives: webcasts, webinars. social networking via secure company links. Airtravel...virtually gone.

If you're gonna spend multi AU's on a first class carrier ticket, and have the bucks, you might as well go fractional and get way better service and flexibility. But even the high rollers with the multi AU's are hurting.

Pricing: Here are some random 'lowest fare' choices in this area for the 4 hr trip I will be taking this March to visit mom in Florida in season and during the Easter break:

LGA to RSW: $283.00 RT (an hour away)
JFK to RSW: $308.00 RT (over an hour away)
EWR to RSW: $296.00 RT (over an hour away)
HPN to RSW: $426.00 RT (40 mins from my house door to door)
SWF to RSW: $587.00 RT (20 mins from my house door to door)

guess where I am flying out of...
 
Bob Noel said:
<sigh>

I should have asked: Wouldn't the airlines has saved money by
leaving the seat empty rather than charging less than the cost
of fuel to haul 220 lbs across the country?
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Sorry....couldn't resist. However, the gross weight empty of a 737-800 is nearly 100,000 pounds. The addition of 220 will have nearly unmeasurable affect on any calculations.

IMO, the airlines are neglecting a huge market in non-stop, short distance travel. For example, I want to go from Grand Rapids, Michigan to Minneapolis, Minnesota. This ticket, with two week lead time, is about $560 or I can purchase through to Las Vegas for $220 and just not connect.

Would budget pricing on flights less than 500nm overload the capabilities of the airports?
 
kevin7500 said:
Sorry....couldn't resist. However, the gross weight empty of a 737-800 is nearly 100,000 pounds. The addition of 220 will have nearly unmeasurable affect on any calculations.

IMO, the airlines are neglecting a huge market in non-stop, short distance travel. For example, I want to go from Grand Rapids, Michigan to Minneapolis, Minnesota. This ticket, with two week lead time, is about $560 or I can purchase through to Las Vegas for $220 and just not connect.

Would budget pricing on flights less than 500nm overload the capabilities of the airports?
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I once priced a flight from BOS to CVG which had a connection in Columbus OH. The flight from Boston to Columbus was more than the flight to CVG through Columbus even though the BOS to Columbus leg was the same flight! Absolutely insane
 
steingar said:
According to Iata. Losses of $11 billion worldwide. Story on BBC.
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No surprise there. Can't speak for the rest of the world, but in the U.S. demand for business travel is way down. In a healthy marketplace, United would go belly up, Southwest and Delta would pick up the pieces, cherry-picking the best of United's routes -- and both surviving companies would be able to raise their ticket prices to profitable levels. This is the way the free market works. (Disclaimer: Substitute whatever airlines you like into that last paragraph; I have nothing against or for United, Delta, or Southwest.)

If things get bad enough, United (or one of the other legacy carriers) will try to go out of business, as per the normal course of events in a recession. Given our recent history of propping up the auto and banking industry, however, I doubt that this would be allowed to happen. If the government follows this model, it's fairly safe to predict that U.S. airlines will simply continue to operate at an artificially high capacity, keeping fares below what the market would normally bear.

In the end, we, as consumers, benefit from low ticket prices, but we, as taxpayers suffer. And, of course, this economic model works only until the airlines get squeezed to the point where maintenance suffers. If large aluminum tubes start falling from the sky, things will change.

Personally, I'd rather eat broken glass than fly commercially, but sometimes there is just no good alternative. So, I keep my fingers crossed every time I fly, hoping that today isn't the day they decided to cut the mechanic's hours...
 
Jay Honeck said:
<SNIP>If things get bad enough, United (or one of the other legacy carriers) will try to go out of business, as per the normal course of events in a recession. Given our recent history of propping up the auto and banking industry, however, I doubt that this would be allowed to happen. If the government follows this model, it's fairly safe to predict that U.S. airlines will simply continue to operate at an artificially high capacity, keeping fares below what the market would normally bear.

<SNIP>...
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Jay...based on the anecdotes that others, and I have posted (and anecdotes may not be data) indicating flights are full, why do the airlines have an artifically high capacity? Do they have planes sitting unused someplace that they still need to service debt/lease/airworthiness?
 
Jay Honeck said:
No surprise there. Can't speak for the rest of the world, but in the U.S. demand for business travel is way down. In a healthy marketplace, United would go belly up, Southwest and Delta would pick up the pieces, cherry-picking the best of United's routes -- and both surviving companies would be able to raise their ticket prices to profitable levels.
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How's that deregulation working out? This scenario is EXACTLY what deregulation was supposed to prevent. Deregulation was supposed to PROMOTE the HEALTHY competition among airlines to create a competitive atmosphere to promote competitive fares. Instead the competition is CUTTHROAT and each company seems to be hell bent on putting every other company out of business. Not what the framers of Deregulation had in mind, IMO.
If things get bad enough, United (or one of the other legacy carriers) will try to go out of business,
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Hope not. That is the horse I have my wagon hitched to. :D

U.S. airlines will simply continue to operate at an artificially high capacity, keeping fares below what the market would normally bear.
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Hmm. Not sure what you mean by this. UAL just finished PARKING 100 airplanes in order to REDUCE capacity, so they would be able to have the higher load factors. In order to at least cut their losses.

In the end, we, as consumers, benefit from low ticket prices
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Yeah. The consumer has become ADDICTED to the low prices. Every time one airline tries to raise prices in order to become profitable, or at least incur less losses, one of two things happen. EITHER no other airline will raise prices, OR the public screams bloody murder.
 
Greg Bockelman said:
Yeah. The consumer has become ADDICTED to the low prices. Every time one airline tries to raise prices in order to become profitable, or at least incur less losses, one of two things happen. EITHER no other airline will raise prices, OR the public screams bloody murder.
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A big part of that is how the public perceives the value of airlines. It is a double edged sword that now with airfares being ala carte no one perceives any value in the ticket price. It represents nothing but a steerage class entry pass. The airline executives turned their product into a low tier, bad experience travel tube. When they try to raise prices for tickets people scream bloody murder because they now want something for that price increase. They feel they get nothing now so they do not wish to pay twice as much as still get nothing.
 
If the airlines all charge reasonably, the public can scream all they want. If no one flies on jets as a result, it means the business model has changed and the airlines will have to change with it if they want to stay solvent. There was a time when very few people flew on airplanes. It could easily come again.
 
smigaldi said:
A big part of that is how the public perceives the value of airlines. It is a double edged sword that now with airfares being ala carte no one perceives any value in the ticket price. It represents nothing but a steerage class entry pass. The airline executives turned their product into a low tier, bad experience travel tube. When they try to raise prices for tickets people scream bloody murder because they now want something for that price increase. They feel they get nothing now so they do not wish to pay twice as much as still get nothing.
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Thing is, Scott, the passengers, for the most part DEMANDED what they got. They wanted cheap fares so the airlines had to cut the frills to accommodate. They had to put in more seats which means less legroom. Had to cut out in flight meals for the most part. Had to start charging for baggage. The passengers demanding lower prices is what STARTED the ala carte thing to begin with. If there is no perceived value it is pretty much because they were unwilling to pay for it to begin with.

It kind of sucks for the high end passengers, but I can't feel very sorry for the low end passengers because in order to provide the "service" (that being transportation from point A to point B) they are willing to pay for, the frills have to go away.
 
Greg Bockelman said:
Thing is, Scott, the passengers, for the most part DEMANDED what they got. They wanted cheap fares so the airlines had to cut the frills to accommodate. They had to put in more seats which means less legroom. Had to cut out in flight meals for the most part. Had to start charging for baggage. The passengers demanding lower prices is what STARTED the ala carte thing to begin with. If there is no perceived value it is pretty much because they were unwilling to pay for it to begin with.

It kind of sucks for the high end passengers, but I can't feel very sorry for the low end passengers because in order to provide the "service" (that being transportation from point A to point B) they are willing to pay for, the frills have to go away.
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Customers want everything for free in any business. Smart business people know how to show value in what they are selling. The airline executives are not smart businessmen or else they would not have gone to a model where they lose money even when selling out all the seats.

This is not the customers fault, it is the fault of the executives for not understanding their own business. What they wanted is what you were saying to begin with, they wanted a monopoly. They were more interested in driving each other out of business than actually providing a service that they could make money on and serve their customers.
 
smigaldi said:
What they wanted is what you were saying to begin with, they wanted a monopoly. They were more interested in driving each other out of business than actually providing a service that they could make money on and serve their customers.
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Yeah, exactly. And I lay that squarely at the feet of deregulation. In the mean time, the customers are getting what they are willing to pay for. That is the truth according to me, living with it day in and day out. Your truth is different, and I respect that. You have your views and I have mine.
 
Greg Bockelman said:
Yeah, exactly. And I lay that squarely at the feet of deregulation. In the mean time, the customers are getting what they are willing to pay for. That is the truth according to me, living with it day in and day out. Your truth is different, and I respect that. You have your views and I have mine.
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Greg, keep in mind that many of the issues pertinent to airline flight are opaque to the passengers. When you purchase your ticket you can't determine the experience level of the pilots, or whether the aircraft has been serviced according to its maintenance schedule. All a passenger has is a schedule and a price. How do you expect them to act, given this situation?
 
steingar said:
Greg, keep in mind that many of the issues pertinent to airline flight are opaque to the passengers. When you purchase your ticket you can't determine the experience level of the pilots, or whether the aircraft has been serviced according to its maintenance schedule. All a passenger has is a schedule and a price. How do you expect them to act, given this situation?
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Michael, I don't get your point. What does that have to do with what they are willing to pay for?
 
smigaldi said:
I guess I don't understand why you think that is unique to the airline industry, but oh well. :cheerswine:
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I never said that. Customer service in this country generally sucks in EVERY industry. No one gives a damned about anything any more.
 
Greg Bockelman said:
Michael, I don't get your point. What does that have to do with what they are willing to pay for?
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I believe his point is that every airline looks just like every other airline, from the passenger's point of view. All the planes are big and shiny, they all use the same airports, and, heck, they're all built by the same two companies. The consumer can't tell if the pilots are more experienced, or if the mechanics are doing their job, simply by looking at a computer screen with flights and prices on them.

Given that position, a customer would have to be fairly stupid to pay MORE for what they perceive to be exactly the same service.

And that, in a nutshell, is why the airlines are where they are. Throw in that the government won't allow any of them to fail, and you see that consumers have been placed in a position where the ONLY thing that matters is price of the ticket.

Actually, from a consumer standpoint, it's an excellent place to be. It's called a "buyer's market", and it has made air travel as common as bus travel. And, sadly, about as much fun.

Actually, though, I'm told that if you want better service there is still this thing called "First Class" travel. I've never actually seen one of those tickets up close, but I've walked through those sections, and drooled on those enormous leather seats... :D
 
Greg Bockelman said:
I never said that. Customer service in this country generally sucks in EVERY industry. No one gives a damned about anything any more.
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While I agree with your overall sentiment, there *are* still some of us who make a living by providing more and better service than what the consumer expects. It's not the easiest road to travel, by any means, but it's certainly the most rewarding.

The look on people's faces when they get more than they thought possible for less than they're used to paying is one of the things that makes owning and operating our hotel so much fun! :)
 
Greg Bockelman said:
I never said that. Customer service in this country generally sucks in EVERY industry. No one gives a damned about anything any more.
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You know, I had a down coat that I never wanted to wash. It was the warmest coat I ever had, and I didn't want the down to deteriorate, which it will with washing. My wife finally said it had to be washed, it was too disgusting. She was of course correct, and during the wash one of the panels tore open and spilled down everywhere. This was a Spyder jacket, and had a lifetime warranty. I felt damage during washing definitely qualified as a manufacturing defect. They agreed straightaway, and exchanged it for a brand new coat with no argument whatsoever. They could have argued quite easily, and they could have delayed. They did neither.

I have had such good experiences with American companies, that I don't think that's the case anymore. Perhaps with airlines, and giant corporations that route your calls to India. Mid Continent avionics, Spyder, and Nordicware are among those companies that have given me memorably excellent service. I think customer relations is getting a rebirth in this country.
 
Jay Honeck said:
I

Actually, though, I'm told that if you want better service there is still this thing called "First Class" travel. I've never actually seen one of those tickets up close, but I've walked through those sections, and drooled on those enormous leather seats... :D
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And please stop the drooling, those of us who have to sit in those seats like them dry when we have to use them. :D

1st class ain't what it used to be either. While there are some improvement, like no more smoking! The service has also been down graded. On domestic flights first class is basically what coach was about 10 years ago. On international 1st is still pretty nice but it reminds me of biz class about 20 years ago.
 
smigaldi said:
1st class ain't what it used to be either. While there are some improvement, like no more smoking! The service has also been down graded. On domestic flights first class is basically what coach was about 10 years ago. On international 1st is still pretty nice but it reminds me of biz class about 20 years ago.
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Coach seats 10 or 20 years ago weren't as good as first class or businee
class are today. Not even close.

My favorite business class seats were the ones Virgin Atlantic had on
the 747's between Gatwick and Boston. And the service was awesome
as well.
 
Greg has made some interesting points. I was there in the early discussions on deregulation, and the deregulating of the airlines. Pardon my cynicism but I early on suspected the move was to put the airlines in play. Guys like Burr and Lorenzo et. al. swooped in and cleaned up and moved on. It is amazing the resources and wealth that evaporated out of the airlines.
 
Bob Noel said:
Coach seats 10 or 20 years ago weren't as good as first class or businee
class are today. Not even close.

My favorite business class seats were the ones Virgin Atlantic had on
the 747's between Gatwick and Boston. And the service was awesome
as well.
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As you may not have noticed I was talking of service. not seats.

10 years ago in coach you got a small hot meal and a couple of sodas on a cross country flight. That is what you sorta get in 1st class domestically now. In coach you may get the chance to buy an over priced snack pack that makes truck stop beef jerky and a candy bar seem like a good meal.

On domestic flights little has changed in the way of seating. UAL still has no electrical connectors in their coach and limited in first class. People who are trying to work while enroute need access to power for laptops. Heck on far too many planes, even in first class, if the guy puts the seat back in front of you your laptop screen is in jeopardy of being crushed. The airlines are not offering the business flier what they need and yet they say the business flier is who they make their money off of. The airlines treat their vacation customers even worse with few places for them to wait at the gates, ala carte basic services, etc. Then they wonder why people would nto want to pay more? People do not feel that what they are paying for now is worth it. Customer service with a sneer is not helping either.
 
Although airline travel has a lot of problems I think that deregulation has been more of a positive than an negative for a large majority of the population, therefore I think it would be very difficult to reverse. I'm trying to think of something else to say here that wouldn't send this to SZ but I can't so I'll leave it at that.
 
>As you may not have noticed I was talking of service. not seats.

yep. I noticed. It would have been better if I added that
wonderful service in coach wouldn't make the cruddy seats in coach
any better. I'd rather have the better seats and absolutely no service.
 
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