Jetstar does it again!
Join Date: Feb 2001
Location: Melbourne, Victoria, Australia
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Breakfastburrito
In relation to your post the other day, you are of course quite correct in pointing out the ‘dark underbelly’ in the fine print of the LCC model when things don’t go as planned. Spare aircraft capacity, accommodation, baggage gouging, inflexibility and the like are real issues facing passengers using a LCC.
I think it is reasonable to pay for the things that mitigate the ‘dark underbelly’ matters you point out so as to improve certainty of time and cost. But I question the value when today’s passengers payfor unfunded liabilities incurred in previous years.
For example, I understand that two of the largest liabilities (that need funding) of ‘full service’ airlines are the ‘pensions’ and unused frequent flyer points. Let me know if I am wrong about this.
Richard Branson is quoted on this subject in another thread “Will BA Go Bust?” (see below) – although we all are aware of Branson’s capacity for spinning a story.
In the same way that some LLCs gouge the uneducated passenger, I think some ‘full service’ airlines have been guilty of gouging the unquestioning customer. As mentioned in a previous post, I think we are seeing a fundamental paradigm shift in airline business models that makes formerly unquestioning customers ask some pertinent questions about value for money.
I may be wrong in choosing to travel based on price and perhaps I will come running back to the ‘full service’ airline when I get badly jilted – and I will post my experience on this site.
Cheers
Pedota
Richard Branson is quoted as saying Virgin had looked at a bid for BA, Branson said, but concluded that the company’s liabilities – in particular its pension deficit – were too great. “It’s not worth much anymore because of the liabilities. We were thinking about if the shares went under 100p (they closed on Friday at 136˝p), but it would be better to wait for its demise”.
In relation to your post the other day, you are of course quite correct in pointing out the ‘dark underbelly’ in the fine print of the LCC model when things don’t go as planned. Spare aircraft capacity, accommodation, baggage gouging, inflexibility and the like are real issues facing passengers using a LCC.
I think it is reasonable to pay for the things that mitigate the ‘dark underbelly’ matters you point out so as to improve certainty of time and cost. But I question the value when today’s passengers payfor unfunded liabilities incurred in previous years.
For example, I understand that two of the largest liabilities (that need funding) of ‘full service’ airlines are the ‘pensions’ and unused frequent flyer points. Let me know if I am wrong about this.
Richard Branson is quoted on this subject in another thread “Will BA Go Bust?” (see below) – although we all are aware of Branson’s capacity for spinning a story.
In the same way that some LLCs gouge the uneducated passenger, I think some ‘full service’ airlines have been guilty of gouging the unquestioning customer. As mentioned in a previous post, I think we are seeing a fundamental paradigm shift in airline business models that makes formerly unquestioning customers ask some pertinent questions about value for money.
I may be wrong in choosing to travel based on price and perhaps I will come running back to the ‘full service’ airline when I get badly jilted – and I will post my experience on this site.
Cheers
Pedota
Richard Branson is quoted as saying Virgin had looked at a bid for BA, Branson said, but concluded that the company’s liabilities – in particular its pension deficit – were too great. “It’s not worth much anymore because of the liabilities. We were thinking about if the shares went under 100p (they closed on Friday at 136˝p), but it would be better to wait for its demise”.
Last edited by Pedota; 24th Jun 2009 at 01:11. Reason: in
Join Date: Mar 2007
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Or are we simply seeing the "Globalised Corporatisation" of the airline industry?
What will happen to pricing then, when all the smaller independent
operators are squeezed out by the merged industry juggernaugts?
What will happen to pricing then, when all the smaller independent
operators are squeezed out by the merged industry juggernaugts?
