“The consumers are accepting a
new pay-for-services price structure,”
Kevin Healy, Air Tran’s senior vice
president of marketing and planning,
told analysts during a quarterly earnings conference call in late April.
With or without extra fees, the
new focus on price and value plays
right into the hands of AirTran,
Southwest and JetBlue.
The way they see it, low-cost is
a brand in its own right, one that
banks on passengers’ loyalty to their
Air Tran’s Arne Haak, vice president of finance, treasurer and CFO,
said the base fare is what first gets
the customer’s interest.
“Weak economy means weak commodity prices, and again, that’s a very
good position for us to be in,” Bob
Fornaro, Air Tran’s chairman, presi-
eyes of the customer, whether they’re
paying $40 or $400 for fares, whether they’re bringing a dog or not.”
She added, “They have to feel
they’re getting value. You have to
fight for loyalty. Buying back loyalty
becomes much more expensive.”
It’s a price tag that few airlines, if
any, could afford right now.
Legacy or full-service
I have no preference
dent and CEO, told analysts in April.
“We can live very well in an environment like we are seeing today.”
David Barger, JetBlue CEO and
president, told analysts, “We believe
the JetBlue brand is well positioned
in the current environment.”
And Southwest CEO Gary Kelly
said, “Our revenue trends continue
to outperform our U.S. competitors.
These revenue results demonstrate
the strength of our low-fare brand.”
But it’s not always about price.
“When I talk to customers, sometimes I’m surprised about what drives
loyalty,” said Gail Grimmett, Delta’s sr.
vice president of New York.
She spoke of one passenger who
wanted to bring a dog onboard. The
passenger complained of the “hassle”
of getting the dog on other airlines.
“But at Delta, it was a smooth process,” Grimmett said. “Value is in the
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