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Thursday, December 05, 2002 |
"United Learns Size Isn't Everything", WSJ December 5 2002.
[Categories: Airlines, Costs, Demand, Game Theory (Commitment)]
P.S. Commitment piece is at the end, about United having little cash perhaps as a bargaining tactic to induce unions to accept less pay.
1:44:20 PM 
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Friday, November 08, 2002 |
"Airbus is Set to Give Final Nod for Superjumbo Jet", WSJ December 19, 2000.
"Airbus Comes of Age with A-380 Super-Jumbo Jet Challenges Boeing's Last Monopoly", USA Today June 21, 2001.
"Boeing Weighing Speed and Efficiency in Deciding Newest Plane", Associated Press November 7, 2002.
Summary: Airbus' super-jumbo has received numerous orders. Boeing appears to have backed off from competing directly against Airbus' super-jumbo, instead favoring a smaller plane that will greater distances. According to Boeing, this plane may also be much faster (as in the Sonic Cruiser idea) or just super-fuel efficient. (See most recent AP article.)
[Categories: Airlines, Demand, Game Theory (first-mover, threats & commitments), Market Definition]
3:52:25 PM
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"Air Canada Rides Out Stormy Weather", WSJ October 28, 2002.
"Air Canada this summer started four niche airlines: Tango (a low-cost, low-fare national carrier), Zip (a low-fare carrier in Western Canada) ... [and is considering niches focused on] cargo service and business travel." (See also Air Canada Vacations and Jetz -- the new business travel-oriented subbrand.) What do you make of this "subbrand strategy"?
Demand issues: Is flying Tango substantially different than flying on a standard flight with a cheap, restricted ticket? What about flying Jetz vs. on a standard flight in business class?
Cost issues: Are cost advantages to segment-specialization great enough that we can ever expect airlines to totally specialize in this way (for all of their flights)? In particular: who is more vulnerable to entry, an airline that carries several types of passengers on several flights or one that carries only a single type of passenger on each flight?
Price Discrimination Issues: Does Tango need to require advance purchase and a Saturday night stay to segment the market of business travellers from leisure travellers? (One can argue this both ways: What facts could we learn to decide the issue?)
[Categories: Airlines, Demand, Market Definition, Price Discrimination]
3:16:28 PM
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Thursday, October 31, 2002 |
"Totally Wired at 32,000 Feet: Airlines Set to Install E-Mail, Web Links for Use In Flight", WSJ October 24, 2002.
By offering "JetConnect" services at the low price of $6.00 for a flight, Continental seems to have shifted to an approach that aims to induce high- and low-demanders to purchases these services (Approach 2 in my terminology) rather than price very high to only attract high-demanders (Approach 1, such as charging $4.00 per minute on Airfone). Could airlines do better by offering a menu of choices (Approach 3)? What offerings and price points might you suggest?
[Categories: Airlines, Price Discrimination]
3:37:14 PM
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Sunday, October 27, 2002 |
"United They Fall", WSJ, October 21 2002. Apologies the salary table didn't come out well. Bottom line: United pilots make from $129K -- $306K, others such as Northwest pay from $100K -- $220K, Southwest pays from $87K to $152K, and at the bottom American Trans Air pays from $46K to $110K.
Why does the pilot's union at Northwest gain bargaining strength when United decides to pay its pilots more? After all, the Northwest pilots aren't likely to be able to switch over to United.
[Categories: Airlines, Costs, Game Theory]
12:12:36 PM
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"Web Effect is Greater on Airline Revenue Than Costs", WSJ, October 17, 2002. Do you agree with this article's analysis? If so, what should airlines do now vis-a-vis their internet strategy?
[Categories: Airlines, Costs, Market Definition, Price Discrimination]
12:03:52 PM
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Wednesday, October 02, 2002 |
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Thursday, September 12, 2002 |
© Copyright 2002 David McAdams.
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