Cost of flying vs amenities
 

In 1990 I took a new job that entailed frequent travel from Boston to Columbus, Ohio. My company paid about $375 round trip for those flights. In today's dollars, that would be about $585, but USAir will sell me a ticket for September for less than $200. If we wonder why the airlines are in trouble and why we don't get many amenities on the flight, that might be the difference.

I totally agree. Something's gotta give & it will be more crowded seats, less food/drink & being treated more like Greyhound passengers.

We can't have it both ways.

If it is a short flight, I don't mind bringing my own food and drinks, however, don't put me on a plane for 6 hours plus and say, "food for purchase" and $5 drinks; especially when I can buy 4 wines at the store for $5.00.

But $200 is better than a half empty plane. And they usually charge premium prices for those last seats on the plane.

I don't really care for all that stuff but since I'm pretty much destined to be flying economy in the forseable future, I would just KILL for three inches for leg room.

crefloors - You don't need to kill anybody or anything. Just fly enough on UA to become an elite, or pay $299 a year, to get E+ seats.

And I wonder when AA had More Room Throughout Coach a few years ago, did you try to fly AA more?

I completely agree with you. The public has spoken with their feet. They are not willing to pay extra for steak, cold lasagna, beer, terrible wine, or mystery meat sandwiches. They just want the cheapest possible fare. The airlines delivered on this demand. There are still some who want the sandwich, the liquer, or the dinner. Challenge is they are probably not willing to pay for it..but they still complain about not having it.

For the 3&quot; more leg room you can simply fly <b><font color="blue">jetBlue</font></b> and sit in rows 13 thru 26 on their A320 (row 26 is the last row). Or get a roomy exit row seat (rows 11 and 12).

How come foreign airlines such as BA and VS have not had to resort to such idiocy as charging for drinks and provide superior entertainment even in coach for the same fares? Why fly AA JFK-LHR when you get 1000% better service on BA and VS? It's just contempt for the pax.

&lt;&lt;The public has spoken with their feet. They are not willing to pay extra for steak, cold lasagna, beer, terrible wine, or mystery meat sandwiches.&gt;&gt;

I don't understand how they've spoken with their feet, from my understanding all the airlines in the US scrapped food just about the same time and therefore what choice do you have except by flying first class which is considerably more expensive.

United saved themselves $30 million per year by scrapping food on US domestic flights, hardly earthshattering, let alone enabling them to reduce air fares significantly.

The problem that airlines had, was that they were overstaffed, overpaid, and had over capacity, this has been changing and they are able to adjust their fares due to a reduced cost base. Also the Low Cost carriers are keeping regular airlines 'more honest' in their pricing policies.

In Europe, airlines such as Lufthansa, Air France &amp; British Airways still offer full service including free beer and wine and as recent results show, they are still able to make huge profits, despite being up against very low fares from companies such as Ryanair &amp; Easyjet.

Geordie

If Lufthansa, Air France, or BA were competing in the U.S. domestic market then their results would be different.

I flew Air France from Paris to Rome recently in coach, and &quot;breakfast&quot; consists of a cookie. My parents fly Aer Lingus AMS-DUB recently and coffee cost &euro;1.

The flying public in the US has indeed voted with their feet. If they have wanted full service all along, then Southwest would have shut its doors years ago. AA gave them more legroom a few years ago, and their load factor was about the same as other majors and fares were the same. CO still serve free food, and their load factor also remained about the same as others. Song gave them free TV and DL has to shut it down. Jetblue gave them free TV, new planes and decent legroom, and its stock prices has gone nowhere and was losing money for a while.

Time and time again, the only thing that works for the airlines is cut cost. To my eyes, the flying public had voted - they want low price, low price and low price.

I think you have compare Apples to Apples. International routes are high profit margin routes, and airlines can still afford to compete with amenities. U.S. domestic routes are highly competitive and price sensitive. Comparing European international routes to U.S. domestic routes isn't a fair comparison.

That being said, I've flown domestic routes on South American airlines (Lan Chile, Lan Peru, Aerolineas Argentina) and they've always served up food on even the shortest routes. Usually it's just a ham and cheese sandwich or a roll and OJ for breakfast. Of course, these are the national airlines for their countries and tend to be heavily subsidised. I'm not sure they'd be able to maintain their amenities in the competitive U.S. market.

&lt;&lt;My parents fly Aer Lingus AMS-DUB recently and coffee cost &euro;1.&gt;&gt;

Poor point, you know Aer Lingus is no longer full service as it competes with Ryanair, thats another reason its leaving One World

&lt;&lt;The flying public in the US has indeed voted with their feet. If they have wanted full service all along, then Southwest would have shut its doors years ago.&gt;&gt;

The regular airlines didn't try to compete with Southwest for a long time, therefore the price differential for the same destination was enormous. If you were a family of 4 going to Orlando, it would be a no-brainer, you'd choose Southwest everytime.

Now that the regular airlines have woken up to the threat of Southwest &amp; Jetblue to their business, the regular airlines have made some of the necessary changes to overstaffing, overpaying and over capacity, so that they are now able to compete with them on price. Food is almost irrelvant in their cost equation, and as xyz123 mentioned, I also think the US airlines are treating customers with contempt.

&lt;&lt;Jetblue gave them free TV, new planes and decent legroom, and its stock prices has gone nowhere and was losing money for a while&gt;&gt;

So your telling me that Jetblue is a more expensive airline to fly due to these new features, that's something I'm not aware of. Maybe its to do with other 'regular airlines' now being able to charge similar fares without losing billions in addition to having comprehensive frequent flyer miles programs.

&lt;&lt;If Lufthansa, Air France, or BA were competing in the U.S. domestic market then their results would be different.&gt;&gt;

Your right, they'd be better but they're not allowed to do it.

To the posters who think that the US domestic market is completely different to the European domestic market, I would like to know the reasoning.

In Europe you have a lot more airlines competing. You have Ryanair or Easyjet offering free flights or 99 cent fares every week. There are numerous other low cost carriers to pick from. These Low Cost Carriers as well as regular airlines are also extremely succesful as can be seen from their share price and profits

Geordie

I think Geordie poses a lot of valid issues. I just don't have the data to come up with a qualified answer. Certainly US airlines had bloated, hostile and underworked staff, USAir being a perfect example, that inflated the cost structure. They also used larger planes for longer distances, with higher fuel costs.

But I don't know the role of subventions and tax breaks in the UK/Europe environment, nor do I know the cost of airport taxes/landing fees and so forth in comparison with the US where such items are all locally controlled and seen as cash cows. Finally, and most controversial, it seems that Thatcher winning the fight against Scargill and the miners may have made unions more reasonable in the UK than in the past. Or maybe not. I find all this very interesting.

Do labor contracts vary between airlines?

When I pointed out about service of AF and EI in my post, I was trying to point out that the service in European mainline and discount carriers are little different from US mainline and discount carriers. In fact, their discount carriers have less service than US ones. That's why I give you two examples.

My point about Jetblue is that passengers are not willing to pay more for more service. If they are, then Jetblue will be packed to the gills, and making so much money; so is Delta. Instead, they have no pricing power to charge more. And their planes are no fuller than other airlines. So, there's really no competitive advantage to add extra service on the flight.

The European market is indeed very different. And they treat problems differently.

Just look at these three things that happened in Europe (or is happening) that can't happen in the US:

- Letting big carriers fail. Like Swissair and Sabena. Two national flags. Last time a large US airline closed its door is Eastern almost 20 years ago.

- Letting big carriers merge. AF-KL. They can talk about it here all day, but anti-trust and political pressure mean we still have 6 major carriers, which is about 3 too many here.

- Ask how much money the Italian government has put into Alitalia to keep it afloat in the past 30 years, or the Greek government into Olympic. The US has done some after 9/11, but the extent is much less.

- British Airways have majority of slots at LHR, and new carriers are prohibited to enter in that market.

Now, can you start to see there are significant differences in the markets?

rrkwan,
&lt;&lt;In fact, their discount carriers have less service than US ones.&gt;&gt;

Aer Lingus offers a hot breakfast to purchase as well as plenty of other fresh options, not just coffee. If you compare this against Ted as an example they offer only $5 food packs that are a crime against humanity.

&lt;&lt;Just look at these three things that happened in Europe (or is happening) that can't happen in the US:.........
Now, can you start to see there are significant differences in the markets?&gt;&gt;

No, I really don't understand your points about airlines failing, merging etc.

TWA &amp; Pan Am are barely in business and were very large carriers in the less 20 years.

US Airways has just merged with America West, and there are more in the pipeline, I'll keep you posted.

&lt;&lt;The US has done some after 9/11, but the extent is much less.&gt;&gt;

done some, your talking about bilions upon billions of dollars.

&lt;&lt;British Airways have majority of slots at LHR, and new carriers are prohibited to enter in that market.&gt;&gt;

Its called Supply and Demand and unfortunately Heathrow is full at the moment, that's one of the reasons why airlines are buying the A380. BA has always been the dominant carrier at Heathrow and and as you would expect, has the most slots. Just like Delta at Atlanta or United at Chicago

In conclusion, I think your arguments are pretty weak with regards to differentiating between the US and Europe markets, I was actually expecting a better effort.

Geordie

There's no need to be confrontational, Geordie.

My view is that comparing US legacy carriers to Euro flag carriers really is apples and oranges. BA serves how many mainline domestic stations - seven? And how many domestic mainline destinations does Lufthansa serve? Or Swiss?

The US airlines' business models are all about their domestic markets, whilst the European (and most Asian) carriers have to focus on international and longhaul markets. Domestic competition is intense in the US. How intense is it on LHR-EDI?

And what's the point of this argument anyway? Some people shop in Harrods' food halls, some at Tesco. Some ride on Easyjet and pay &pound;1 for a bottle of water, some fly in Club Europe and get a hot breakfast (along with 31&quot; seat pitch) for their overpriced flight to Malaga.

Last I checked, load factors were up pretty much everywhere, so evidently the price/benefit equation is working at something like equilibrium.

Don't like paying for a sandwich on a domestic flight? Groovy. Mickey D's awaits. Want a free drink? Fly on an airline that gives 'em. (And BTW EI isn't the only flag carrier that's going to pay-per-nip. SAS has started too.)

Enjoy your inflight service on EDI-MAN next time, too. What's that you say?

I think we have made our points pretty clear. No need to rehash.

However, I wonder what Geordie's suggestion is to the US airline executives? If Geordie has a great idea, I want to hear it.

I would vote with my feet, but since I'm tied to a second-tier, non-hub airport, I have NO CHOICE on many routes - there's no &quot;supply and demand free market&quot; outside the major city hubs -- you get what you get. And I too would kill for extra room, but since we're doomed to regional jets, that's naganna hapn. (And btw do notice how many cross-continental JetBlue routes are red-eyes, esp. coming from the West Coast.)

Gardyloo

I'm not trying to be confrontional, I'm simply responding to statements that I think are misleading.

&lt;&lt;The US airlines' business models are all about their domestic markets, whilst the European (and most Asian) carriers have to focus on international and longhaul markets. Domestic competition is intense in the US. How intense is it on LHR-EDI? &gt;&gt;

How's that different to BA or LH flying around europe, I simply don't understand how you relate BA or LH simply to the UK or German domestic markets, its a ridiculous argument. So LHR to AMS is international and therefore completely different from BOS to JFK

EDI - LON There are plenty of options e.g direct flights with BA, BMI, easyjet, or Scot Airways

&lt;&lt;However, I wonder what Geordie's suggestion is to the US airline executives?&gt;&gt;

I've already mentioned what the problems are, which was largely their own doing, but you can also add old &amp; inefficient aircraft to the list. So, here's some free advice, why not operate only the routes where you make money!

Geordie

The jetBlue schedule has 4 nonstops daily from LGB to IAD, 1 of which is a redeye. United has 9 nonstops, 2 of of which are redeyes. AA has 3 nonstops tomorrow on that route, 1 of which is a redeye. I think you would find similar results for other transcons.

For that redeye flight on jetBlue they have an amenity kit, not sure if it is complimentary or not. I believe it is complimentary. They also have a hot towel service.

Here is a description of the kit:

Bliss Spa has joined forces with JetBlue to bring some ‘aaahhh’ into the air. Sample some sky-high ‘spa-ing’ with the new Shut-Eye KitTM, to help fly-by-night types arrive from the West at their best.

Includes: lemon+sage body butter, mint lip balm, ear plugs, and eye shades.

I go six hours withoug eating or drinking almost everyday. Then I break that fast with breakfast. I bet most of you do too.

So what is it about a 4 or 6 hour flight that demands a meal to be served. Have breakfast when you land.

BTW, I also usually only consume coffee between morning breakfast &amp; dinner on weekdays. I'm alive, and even healthy. Those airlines seats might not seem so cramped were we all to cut back on our chow a little.

<i>So, here's some free advice, why not operate only the routes where you make money!</i>

The major airlines in the US operate hub and spoke systems. [This include Jetblue too.] All routes are therefore linked, and it's not easy to operate just routes that make money. For example, international routes are making money for all the majors now, but the domestic flights are needed to feed those longhauls.

When say Delta or Northwest was bleeding money until this quarter, it's basically their whole system losing money. But I'd agree that perhaps both of them should just damn <b>close their doors</b>.

The other airlines will do better, but then you'll be paying more.

The matter of fact is that it's a <b>good thing</b> all US airlines are losing money all the time. This means somebody else is subsidizing for our travel. And I've made this argument many times. If one wants better service, food, etc on their flights, fly first class.

<i>How's that different to BA or LH flying around Europe?</i>

The difference is in scale and route architecture. All the legacy/flag carriers in Europe operate out of one or at most two (typically, fortress) hubs. Most pax traveling internationally at these hubs are O/D traffic, arriving by land, not air, so the carriers don't need to invest in flying machines, ground crews, station managers, bag handlers, etc. at anything like the scale of N. American operators who have many non-hub airport ops and O/Ds. Costs money. So rather than lose profitability on those non-hub ops, the airlines reduce costs to the breakeven point. Those that don't (for example DL or NW on many of their feeder routes) find themselves in bankruptcy. (And Southwest and B6 sure won't enter those markets - nowhere near the volume.)

LON-AMS is a shorthaul route where pax have several choices - EZY from Gatwick or Luton or Stansted, BMI or BA or KL from LHR… As a result, BA's fare price per mile for LHR-AMS is only slightly higher than BOS-NYC on American carriers (around 2p per mile higher, so for 400 miles return, around 8 quid, i.e. the value of a biscuit and tea, sandwich and beer.) And of course people living near Waterloo or Ashford don't have to go to the airport at all.

But now let's have a look at LHR-DME. 1580 miles, BA price for 72hr return trip in late September, cheapest available, &pound;789 (yes, &quot;Euro Traveler,&quot; with generous food/bev service and 31&quot; pitch.) Alternatives? Well, there's Aeroflot. And… ? (Oh sure you can connect in Zurich and save some. But business travelers generally don't want to add another 5 hours each way.)

Same days, LAX-ORD: 1745 miles, AS, AA, UA nonstops, $280.

To help with the math, that's 25p per mile on the BA trip, 4.4p per mile on the US carriers. Want to know how BA can add booze in coach? That's how.

Now I am not equating London to Moscow with LA to Chicago, except to point out that cost/revenue formulae are highly dependent on competition and volume.

As to equipment age, you really had better look at fleet profiles among the major US and European carriers. You might be surprised.

Mind, I am not defending US airline managers across the board. In systems as complex and vast as these, there are plenty of opportunities for screwups, and it seems like many of the managing geniuses have had excellent luck in finding them.

But I'll just close with one word. Alitalia.

I'll finish this by saying the following:

The costs of extra aircraft, staff etc should all be built into the business case, if it doesn't add up you don't proceed.

The argument regarding competition on a route is correct, that why I said low cost carriers are keeping the regular airlines honest, incidently MUC-DME is 168 Euro.

Easyjet, Ryanair, Lufthansa have a number of hubs and if a hub is unprofitable then they should close it down. I think US Airways are doing this in Pittsburgh and BA are looking at this at Gatwick.

Your also right about the alternatives of getting to AMS, even more competition for the airlines, with the Eurostar, but also the TGV or ICE within France or Germany.

All the equations regarding miles flown are very impressive but I think you missed a major point that you could have used for your argument and that is the major cost at the moment is fuel and what currency do you hedge your fuel in, yes dollars. The majority of European revenues are in GBP or Euros and as the dollar is very weak, it doesn't hurt so much.

So while the US network is vast and complicated, it is only the airlines doing, and at the same time its not rocket science.

But I'll just close with one word, Northwest

Geordie

I checked: the amenity kit on jetBlue is complimentary. I don't much care if they lost money in 4Q 2005 or if their stock price is where their investors hoped. What I do care about is keeping crefloors from becoming a felon and the excellent product that jetBlue provides can do that.

I can buy a 3-day return ticket LHR-DME on BA nonstops for the end of Sept. for $434 on travelocity or $339 on Swiss. On a different three days during that time period I could pay $1400+ on BA or $339 on Swiss. If I chose LHR-SVO then I would have a choice of several airlines with connecting service at good prices ($355 to $500).

Actually, the same results for next week, Aug 8-10. For LON-MOW, the best price is Swiss at $339. The BA nonstop is $1477. The connecting flight on Swiss would take 2 hours longer than the nonstop. With that big of a price difference most corporate travelers are going to be going thru ZRH.

Meanwhile, Aug 8-10 ORD-LAX is $496 on AA and UA. Or you could save $97 and take Southwest nonstops MDW-LAX.

I'm not going to do the revenue per mile math on those numbers. I just realized that the prices I listed above include taxes and fees. But it doesn't seem to be a good idea to choose specific examples in order to try to prove the general case. And those are prices, not revenue.

I think the stats that would be more interesting would be revenue/cost ratios. Or (revenue-cost) per mile. Actually would be best to see rev/mile and cost/mile.

rb_* you made a couple of good points but cutting back on the chow is not going to make my legs any shorter or my shoulders narrower! People complained about airline food when it was there and now complain that it is gone. An airplane is not a bar, but jetBlue does claim to have a &quot;low-fare sommelier&quot;.

I think I finally found the right thread to ask my question. Could anyone please tell me if Lufthansa Airlines provide complimentary beer/wine on their International flights? Also, do they have &quot;in the seat&quot; video screens - particularly on their Boeing 747, LAX - Frankfurt?
Thank you.

OldeBrit -

Yes and No.

rkkwan

Thank you

Jolly good and Oh dear!

All of Southwest's flights are rather short. However, charging customers $5 for a beer on an International flight when many of the customers are from a foreign country and may not have Dollars with them--and then charging them 5 Euros when the dollar is 25% lower than the Euro is just turning people off. On a 6 hour + flight, the airlines should do everything they can do to provide a decent meal that people will eat.

Upsetting the customers on these long flights means the airlines will need to lower their prices even more from the competition to win them back, and when the major cost in flying is jetfuel, it just doesn't make any sense.

Some of the pressure will mean that the companies now organizing to provide short- and medium-haul air taxis (&quot;private&quot; jets seating up to 6 or 8) will become very popular among business travelers.

As for: &quot;So, here's some free advice, why not operate only the routes where you make money!&quot; OK, how do you propose serving all those other areas and cities? Right now, it costs far less to go coast-to-coast than it does to go from Dubuque to Raleigh. Are you actually saying &quot;why not make money on the routes you operate&quot;?

For myself re: <i> bring back the trains !!! </i> -- esp. for distances under approx. 700-1000 miles. People on the East Coast already know that it can often take longer door-to-door to get to an airport, get through security and check-in, deal with delays,wait for baggage, and get a taxi downtown than it does to take a train, which can offer amenities the airlines can't AND which have wide seats! The campaign to withdraw support of and dismantle rail travel in the US is scandalous. Can you imagine populations depending entirely on air travel in Europe?