skybus forced to follow the herd..raising fees
02-15-2008, 04:32 PM
#1
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skybus forced to follow the herd..raising fees
diffendefer announced this week in the Triad Business jouranl that skybus will raise baggage fees 140%. he was quoted " We usually don't follow the herd, but we agree with them on this.' this according to Triad Business Journal reporter Matt Evans. Diffenderfer was also said to have commented on the need to offset higher fuel prices.
what does this mean? change, adapt or die, in my opinion.
this isn't bashing but running a business is a challenge and they can see that many things need tweaking. clearly, raising fees suggest that revenues or yield still isn't where it needs to be.
I think ultimatley their fares will be just like any other and they will have zero competitve advantage if they ever had one. don't think they ever had one except there are alot of dumb travelers that think you can fly jets that cost 50 million for ten dollars tickets.
so, in the end they will succeed or die on the merits of their plan, their product, and the price. if it costs just as much to fly them, why would you want to land at a satellite airport 5o to 60 miles away. i like my argument
what does this mean? change, adapt or die, in my opinion.
this isn't bashing but running a business is a challenge and they can see that many things need tweaking. clearly, raising fees suggest that revenues or yield still isn't where it needs to be.
I think ultimatley their fares will be just like any other and they will have zero competitve advantage if they ever had one. don't think they ever had one except there are alot of dumb travelers that think you can fly jets that cost 50 million for ten dollars tickets.
so, in the end they will succeed or die on the merits of their plan, their product, and the price. if it costs just as much to fly them, why would you want to land at a satellite airport 5o to 60 miles away. i like my argument
02-15-2008, 05:30 PM
#2
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Originally Posted by yoke jerker
don't think they ever had one except there are alot of dumb travelers that think you can fly jets that cost 50 million for ten dollars tickets.
The fact is, in many cases they're routes are MORE convenient than their competitor's, since they really don't fly head-to-head against anyone - often they'll serve routes that would require a connection on a competitor. and, usually, they're fares are far cheaper than just 25% below their competitors' fares.
their cost structure is designed to be much lower than that of their competitors. and, i would argue they're sticking to the business model with the aforementioned revenue move - they're going to try to increase revenue by charging for "optional items," while keeping base fares far lower than the competition's. in many ways, this is not far different from other forms of price discrimination used by legacy airlines - legacies just haven't historically done it via pricing "a la carte" - legacies historically have done it through fare rules. but, in the end, the strategy is the same. i would argue that sx's strategy provides far more clarity to the consumer, however.
this is a business model essentially untested in the US (but markedly successful in europe). neither skybus's customer nor its management group is "dumb." that doesn't guarantee success for sx; but while we wait and see, please lay off the insults, yoke.
02-15-2008, 05:45 PM
#3
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Originally Posted by bbtp
thanks, yoke. i'm a customer - and far from dumb. i flew skybus and found the experience not much different from most other airlines - aside from the fact that the sx crews were decidedly more friendly than those i've encountered on several recent trips with other carriers. if sx routes are 75% as convenient as a competitor's and 25% cheaper, i'm smart enough to fly them every time.
The fact is, in many cases they're routes are MORE convenient than their competitor's, since they really don't fly head-to-head against anyone - often they'll serve routes that would require a connection on a competitor. and, usually, they're fares are far cheaper than just 25% below their competitors' fares.
their cost structure is designed to be much lower than that of their competitors. and, i would argue they're sticking to the business model with the aforementioned revenue move - they're going to try to increase revenue by charging for "optional items," while keeping base fares far lower than the competition's. in many ways, this is not far different from other forms of price discrimination used by legacy airlines - legacies just haven't historically done it via pricing "a la carte" - legacies historically have done it through fare rules. but, in the end, the strategy is the same. i would argue that sx's strategy provides far more clarity to the consumer, however.
this is a business model essentially untested in the US (but markedly successful in europe). neither skybus's customer nor its management group is "dumb." that doesn't guarantee success for sx; but while we wait and see, please lay off the insults, yoke.
The fact is, in many cases they're routes are MORE convenient than their competitor's, since they really don't fly head-to-head against anyone - often they'll serve routes that would require a connection on a competitor. and, usually, they're fares are far cheaper than just 25% below their competitors' fares.
their cost structure is designed to be much lower than that of their competitors. and, i would argue they're sticking to the business model with the aforementioned revenue move - they're going to try to increase revenue by charging for "optional items," while keeping base fares far lower than the competition's. in many ways, this is not far different from other forms of price discrimination used by legacy airlines - legacies just haven't historically done it via pricing "a la carte" - legacies historically have done it through fare rules. but, in the end, the strategy is the same. i would argue that sx's strategy provides far more clarity to the consumer, however.
this is a business model essentially untested in the US (but markedly successful in europe). neither skybus's customer nor its management group is "dumb." that doesn't guarantee success for sx; but while we wait and see, please lay off the insults, yoke.
02-16-2008, 01:39 AM
#4
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bbtp,
look, some people think your tickets are ten dollars. Cheap is the buzzword on every one of your commercials with a little birdie. don't know how you came up with the 75% as convenient, 25% cheaper...that's a real stretch. did you factor mileage, exact distance from every hub and whether or not you drive in rush hour traffic. just wondered how exact your study was.
you own boss, said, " we'll follow the herd."
my main point to keep this on topic. you never really debated this point, you just recanted the SX model which i fully understand: SX is forced to change or they won't survive. you may disguise the much needed policy to raise revenues by cleverly levying increases through whatever means you choose. That practice is a marketing function.
It is not insult to argue this is so typical. in fact, all new companies struggle trying to fit into to the market. That is what you're doing now , aint' it? you weren't here a year ago, but now you're here.
so, as i said, i see nothing different here. just another rose by another name. it is still a rose. that's my argument. you're no different. I have unmasked you and you don't like it. unmasking and insulting are not the same.
look, some people think your tickets are ten dollars. Cheap is the buzzword on every one of your commercials with a little birdie. don't know how you came up with the 75% as convenient, 25% cheaper...that's a real stretch. did you factor mileage, exact distance from every hub and whether or not you drive in rush hour traffic. just wondered how exact your study was.
you own boss, said, " we'll follow the herd."
my main point to keep this on topic. you never really debated this point, you just recanted the SX model which i fully understand: SX is forced to change or they won't survive. you may disguise the much needed policy to raise revenues by cleverly levying increases through whatever means you choose. That practice is a marketing function.
It is not insult to argue this is so typical. in fact, all new companies struggle trying to fit into to the market. That is what you're doing now , aint' it? you weren't here a year ago, but now you're here.
so, as i said, i see nothing different here. just another rose by another name. it is still a rose. that's my argument. you're no different. I have unmasked you and you don't like it. unmasking and insulting are not the same.
02-16-2008, 08:01 AM
#6
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okay that's fine, but you spoke so well informed. really, that's irrelevent isn't it?
isn't your position : SX is a good airline and offers a low priced product that is 75% as good but 25% less than premium brand X airline?
my point: SX is average, may be less, but is forced to raise prices( so out the door goes the model) therefore, no cost advantage and they leave you out in the boonies.
we differ, but have a good day
isn't your position : SX is a good airline and offers a low priced product that is 75% as good but 25% less than premium brand X airline?
my point: SX is average, may be less, but is forced to raise prices( so out the door goes the model) therefore, no cost advantage and they leave you out in the boonies.
we differ, but have a good day
02-16-2008, 08:05 AM
#7
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Originally Posted by yoke jerker
bbtp,
look, some people think your tickets are ten dollars. Cheap is the buzzword on every one of your commercials with a little birdie. don't know how you came up with the 75% as convenient, 25% cheaper...that's a real stretch. did you factor mileage, exact distance from every hub and whether or not you drive in rush hour traffic. just wondered how exact your study was.
you own boss, said, " we'll follow the herd."
my main point to keep this on topic. you never really debated this point, you just recanted the SX model which i fully understand: SX is forced to change or they won't survive. you may disguise the much needed policy to raise revenues by cleverly levying increases through whatever means you choose. That practice is a marketing function.
It is not insult to argue this is so typical. in fact, all new companies struggle trying to fit into to the market. That is what you're doing now , aint' it? you weren't here a year ago, but now you're here.
so, as i said, i see nothing different here. just another rose by another name. it is still a rose. that's my argument. you're no different. I have unmasked you and you don't like it. unmasking and insulting are not the same.
look, some people think your tickets are ten dollars. Cheap is the buzzword on every one of your commercials with a little birdie. don't know how you came up with the 75% as convenient, 25% cheaper...that's a real stretch. did you factor mileage, exact distance from every hub and whether or not you drive in rush hour traffic. just wondered how exact your study was.
you own boss, said, " we'll follow the herd."
my main point to keep this on topic. you never really debated this point, you just recanted the SX model which i fully understand: SX is forced to change or they won't survive. you may disguise the much needed policy to raise revenues by cleverly levying increases through whatever means you choose. That practice is a marketing function.
It is not insult to argue this is so typical. in fact, all new companies struggle trying to fit into to the market. That is what you're doing now , aint' it? you weren't here a year ago, but now you're here.
so, as i said, i see nothing different here. just another rose by another name. it is still a rose. that's my argument. you're no different. I have unmasked you and you don't like it. unmasking and insulting are not the same.
I agree that SX must adapt or go away, they know this too, and they're making all kinds of necessary "tweaks".. More over, we're in one of the worse economies since the late 70's.. and starting an airline now may not have been the best idea (hind sight being 20/20). With that, I think SX has the capital to ride out the downturn, and IF their leaders are smart enough (we all hope they are), will adapt. Portsmouth loads are thru the sky, while loads out of MKC and MKE are in the 35% range.. Just as with pulling out of the expensive trans-cons, they need to pull out of certain markets and focus their capital on ones that are working.
02-16-2008, 12:09 PM
#8
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Originally Posted by CE750
I work for Skybus, bbtp is a F/A 18 IP .. But he knows a lot about our model. What he said is 100% spot on.
I agree that SX must adapt or go away, they know this too, and they're making all kinds of necessary "tweaks".. More over, we're in one of the worse economies since the late 70's.. and starting an airline now may not have been the best idea (hind sight being 20/20). With that, I think SX has the capital to ride out the downturn, and IF their leaders are smart enough (we all hope they are), will adapt. Portsmouth loads are thru the sky, while loads out of MKC and MKE are in the 35% range.. Just as with pulling out of the expensive trans-cons, they need to pull out of certain markets and focus their capital on ones that are working.
I agree that SX must adapt or go away, they know this too, and they're making all kinds of necessary "tweaks".. More over, we're in one of the worse economies since the late 70's.. and starting an airline now may not have been the best idea (hind sight being 20/20). With that, I think SX has the capital to ride out the downturn, and IF their leaders are smart enough (we all hope they are), will adapt. Portsmouth loads are thru the sky, while loads out of MKC and MKE are in the 35% range.. Just as with pulling out of the expensive trans-cons, they need to pull out of certain markets and focus their capital on ones that are working.
It would seem that due to the nature of SX's fare structure, a short haul marketing structure would be more appropriate. Your management's decisions regarding the transcon California markets seem to be well grounded. The Northeastern US is by far the largest population center, and would most likely do quite well as the focus of SX's efforts for now, perhaps providing direct service to southern destinations such as FL.
Perhaps some focus cities for short haul flying out west would be a different way to approach the California flying again one day. A separate California short haul operation would help offset revenue disruptions experienced in the NE US during major winter storm events, and to a smaller degree FL during active hurricane seasons. JP
02-16-2008, 12:33 PM
#9
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Originally Posted by yoke jerker
we differ, but have a good day
as for SX - when i heard about the $10 fares, i started to check out the company because i was both skeptical and facinated. based on their resumes, i think the management is sharp. that's not to say they haven't taken a high risk endeavor - but so have plenty of other sharp capitalists (many have succeeded and some have failed). you can look at a plethora of management resumes in their initial faa filing if you're at all interested (a link is available on wiki). already, they have accomplished some things never before accomplished (from how quickly they got their certificate to how much cash they've raised).
i've got a soft spot in my heart for entrepreneurs (and as a consumer, naturally i've got an interest in their success). sure, i share in your skepticism, while at the same time remaining optimistic regarding their prospects. it's definitely a tough time to start an airline - but if they can make it in this environment, i think we can expect them to be around a while. the next year will tell a lot. i simply wish luck to their pilots, other employees, and investors.
02-16-2008, 01:14 PM
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i didn't realize nationwide was a backer. they must have a ton of cash because they signed up for the busch series, too.
i wonder if airline execs pull the trigger too soon on a market?
no good CEO will burn up cash if it ain't working. the real good Ceos just have an intuition that got them to where they are. properly steered, SX could be fine, but where they end up and how they started might be totally different. nothing wrong with that.
i wonder if airline execs pull the trigger too soon on a market?
no good CEO will burn up cash if it ain't working. the real good Ceos just have an intuition that got them to where they are. properly steered, SX could be fine, but where they end up and how they started might be totally different. nothing wrong with that.
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