Follow the leader… off the cliff? American Airlines acknowledges that noone has figured out how to make a low cost carrier within a carrier work, but they’re considering it anyway because Delta and United are talking about it.
Monthly Archives
Monthly Archives for February 2003.
Joe Brancatelli has some
Joe Brancatelli has some basic lessons for business travelers traveling for leisure. Hint: approach leisure travel differently.
The Chicago Sun-Times has a
The Chicago Sun-Times has a piece today on the new low-cost “airlines-within-airlines” being started at United and Delta including a summary of failed past attempts by the major airlines to create low cost subsidiaries as a way of competing with Southwest and others. It’s never worked before (e.g. Continental Lite, United Shuttle). The majors simply retain too high a cost structure and dilute their premium brands by trying to mimic Southwest or JetBlue. Smaller airlines pick and choose niche markets and clean the majors’ clocks. United’s early concept was simply to re-introduce a low cost carrier with their older planes like they had with the United Shuttle on the West Coast (which they set up to compete with Southwest, but they shut down because it lost money). However, low cost carrier JetBlue offers leather seats…
USA Today reports on the
USA Today reports on the trend towards airlines rewarding high revenue flyers instead of high mileage flyers. For instance: Delta has moved towards a revenue model for elite qualification. United has formalized its VIP program. American and Northwest offer revenue tracks (parallel to mileage tracks) towards elite status. The article doesn’t point out that in most cases the perks for high revenue flyers aren’t new perks. In several cases they are even less generous than the old perks for high revenue flyers. The airlines are simultaneously cutting back and transitioning perks to a revenue-based approach. I think this is ill-advised. They run the risk of losing the loyalty of the high volume flyer who while not necessarily as lucrative are certainly built into their current businesss model. If the planes were completely packed solid, there…
Homeland security takes a bite
Homeland security takes a bite out of economic productivity. The two biggest issues on the domestic agenda right now are terrorism (and all that goes along with it, including Iraq) and the sagging economy. Either one has the potential to undo this administration. But the silliest of policies aimed at the former have the potential to do real damage to the latter. Real productivity growth was the engine of expansion in the 90s, through the widespread adoption of such inovations as electronic communications and just-in-time delivery. But new U.S. Customs rules may require giving the government as much as 3 days notice before shipping anything into the country. That means making decisions about what materials are needed in production earlier (possibly with less information, leading to bad decisions and waste). That means stockpiling inventories to…
Clothing for dignity? The Tri-Cities
Clothing for dignity? The Tri-Cities Regional Airport in Blountville, Tennessee, is giving away free socks to passengers whose shoes are inspected by airport security.
The Transportation Security Administration’s
The Transportation Security Administration’s Inspector General criticizes the agency’s wasteful and profligate spending, for instance (T)he TSA estimated that it would cost $107 million to hire tens of thousands of federal airport screeners. The contract ended up costing more than $700 million.
Politics and affinity programs. The
Politics and affinity programs. The Republic Party now has GOPoints which lets members earn rewards for political activism. The rewards are unimpressive, but the idea is a good one.
Novel concept. Air Canada
Novel concept. Air Canada boosts service to earn more revenue. Funny thing is that this is a novel concept in the airline industry. With so many airlines cutting back on their amenities, customers might just choose to fly one that isn’t. In contrast, United in recent years has eroded its premium cabins by: ending hot towel service domestically ending champagne service domestically cutting Godiva chocolates and hot chocolate chip cookies cutting the personal video library in 3-class First There are fewer passengers paying premium fares in the current environment. But those that are have no reason to choose United over a competitor flying a similar route. As other airlines introduce flat beds in business class, even United’s advantage of the best seat in the sky is gone. Delta and United are both following a low-cost…
Punditwatch is up.
Punditwatch is up.
