Lets play this out. Ultra low cost carriers go out of business. Then legacy carriers jack up prices and then after a few years the low cost model makes sense again and you will be back to square one. We are stuck in an endless loop.
Why would they go out of business when they're profitable? Their profits may not be big but they are doing fine. This is what a properly regulated industry should look like. As a consumer I can pick an airline that provides me with the best service for the price. If you adjust for inflation air travel has only been getting cheaper. I don't give a shit if investors can't get rich off of airlines companies. Important services like air travel should not be turned into money extraction schemes like so many other industries have turned into over the last decade.
So long as there are good options that JUST WORK, is stable and steady, then I see no issue. But late stage capitalism will demand some enshitification to decay this stability. Soon you won't have good options.
As airline crew (Pilot) it feels like passengers think we are their enemies. Please remember as front line employees none of us are into this for making passengers miserable. There's only so much we can do before our corporate overlords have us fired, or regulatory agencies get us fined, decertified, or jailed. This is an incredibly complex operation and there's so much that goes on behind the scenes that many people are oblivious to. Nothing is ever a simple answer or solution when things go wrong. The ugly truth nobody will admit is that passengers are their own worst enemies. It's also a symptom of late stage capitalism. If everybody still paid $2000 round trip in COACH class only to fly a few states away like was commonplace 50 years ago before airline deregulation, everybody could get the red carpet treatment. Back then only the upper middle class could fly. Nowadays, nearly anybody short of the homeless can afford to fly at least once a year, and you can still occasionally find fares for 2 digits, but people will expect lobster and rib eye meals, unlimited ticket changes and refunds, 500lbs of free checked bags, and complimentary lap dances from flight attendants. The demand is for dirt-cheap fares, yet everybody acts surprised when the supply is little more than a chair in an aluminum tube with some caveats. All those perks cost the airlines a lot of money. For what it's worth we are all keenly aware air travel sucks nowadays. When flights get cancelled, planes break, ATC has a meltdown, etc etc that affects us far more than passengers, since as pilots we may be working 4 or more flights a day. Flight attendants have less restrictive rest rules so they could be flying much more than we do. Anyways, TL;DR, yes, we know, it sucks, but for the love of all is holy don't take it out on the front facing airline employees. Blame the system.
@@aerialbugsmasherI was going to say the same thing as an aircrew but your words are so much better than mine!! 😅 I would love to see the days where people used to dress up to fly rather than wearing pajamas. If I have to wear a suit and tie to fly, why can’t they wear a collared shirt and look presentable like we have to do when we fly non-rev or positive space. I say the big three need to raise fares together so then the cheap folk can fly exclusively on Spirit, Frontier, and Allegiant and get exactly what they pay for. When I am a paying customer, I refuse to fly in steerage in the back. I pay the extra fees for upgraded economy or first class. I think the big three should become exclusive for those looking for a better experience. Too many times others are affected by the actions of those who demand Filet Mignon on a chopped steak budget.
You mean to tell me that southwest got to where it is today by actually prioritizing better service to customers over maximized profits at all costs? More companies in today's world need to be like this.
It seems like when the other airlines hit rock bottom of screwing the customer, they dig deeper. Yes, that is for you companies that charge for carry ons and to choose specific basic seats. Those items are no extra expense to the airline and the charges are only there to penalize the customer.
@mind-of-neo Every company has the same goal of maximizing profits. To do otherwise would be irresponsible. Of course, each company may choose its own path to the common goal.
@@johnweiland9389 (Sorry for rambling, but I am very passionate about this topic. 😁) That is not entirely true. While Southwest does serve point-to-point routes, they also operate many hubs, including MDW, DAL, HOU, BWI, DEN, and a few others. If you live near any of these airports, you can probably find a direct flight on Southwest to nearly any city. They prefer the term "focus cities," but these are definitely hubs, and my home airport (DEN) is the largest. Most of the point-to-point routes are really just stopovers between two hubs. For example, I have flown DEN-MAF, but that is really designed as a DEN-DAL-DEN flight, with a short stopover in Midland to let a handful of passengers on/off. The hub and spoke system is very effective and efficient, which is why all the major players use it. It is also a drawback for the smaller airlines that do not have a hub. If a flight is canceled by Frontier or Spirit, the passengers are completely screwed because a) there is probably no other flight that day, b) the airline has no substitute planes at that airport, and c) these airlines do not interline with the legacy 3. If my United flight is cancelled, they will either put me on the next UA flight, or re-book me on a flight with AA or DL. Easy peasy. (Not sure if Alaska and JetBlue are part of the program, since they have joined OneWorld?) By contrast, a few years back, Frontier cancelled a flight to Cabo, I think from Phoenix. They only flew that route once a week, and next week's flight was already sold out, so 150 passengers on the outbound and 150 passengers on the same day return were SOL. Of course, Frontier was happy to refund the $99 airfare that was booked 6 months ago, but 300 folks had to find a last minute ticket on another carrier, and they definitely paid more than $99!
That is wrong. Southwest hates the northeast, and serves it only to represent. Northeasterners are the worst passengers, and the crappy airports and weather there screw up their business model.
At least the actual Northeast Airlines were bought by Delta, not Southwest - otherwise the whole American budget airline market would've folded in on itself and collapsed into a singularity 😂 Or perhaps a singularity would've required Northwest Airlines to be part of that merger too 😄
I love how Alaska Airlines ALWAYS gets left out of or ignored in the conversation, when they are a legacy carrier and has remained profitable and consistently grows when the other airlines downsize. The airline has the most flights on the west coast of the US and has the most flights to Mexico and Hawaii from the west coast. Also, Seattle is not a fortress hub for Delta. Alaska still dominates Delta out of Seattle and has the most marketshare. 13:13 Alaska beats everyone else but no mention.
I agree it was a mistake to ignore Alaska. I would beg to differ that Alaska beats Southwest. No they don't despite Southwest's huge mess right now. Alaska has a lot of problems too.
I'm in Seattle so I fly Alaska all the time. Whenever anything goes wrong with my flight, they compensate me--without fail. None of the other major airlines seem to do so.
I think it's because a lot of people don't know how to "categorize" Alaska. They ride the gray area between legacy and LCC, and have such a territorial advantage on the west coast they really are a separate third column... much like Hawaiian which may be joining Alaska as a single company soon.
I agree as well and am a proud Alaska employee! I do think it's fair to call Seatac fortress hub for Delta, though. Mainly because of their international Asian market out of Seatac. Alaska and Delta don't currently compete in that market. So, it's hard to compare their Seattle operations that way. But Alaska certainly owns the largest portion of the Seattle gates. Concourse C, N, and D (with the exception of 3 D gates) are only Alaska operations.
Yeah, at this point in my life, my loyalty has shifted somewhat. In my younger years I simply gravitated towards whoever was the cheapest. Now that I have a travel card, my loyalty is to whichever flight can get me the best "bang for buck" with rewards points. Sure the Air Canada flight I'm looking at costs less money and points than a similar flight from American Airlines or United, but ask any frequent international flyer and they'll tell you that there's some inconvenient reasons for that...
@@UndeadPorcupineAeroplan is, however, still the best rewards program in the world right now though. If you're a US-Origin passenger, you're trading cost and better upgrade options for a connection without losing loyalty benefits. It's especially great if you're a United flier because of their JV, where UA flights can gain you status on AC, which give you most of the same benefits on UA (through Star Alliance Silver/Gold), while giving you real benefits when flying internationally (better upgrade options, far better points utilization, cheaper flights, etc). Unless you live in a specific city that hosts the likes of SFO, LAX, JFK, IAD, ORD, DFW, ATL, or EWR, you are almost always required to connect somewhere in the US to travel internationally. What difference does it make for someone living in Indianapolis having to transit through YYZ or YVR when compared to transiting through SFO or LAX to get to Tokyo? That's not to say that everything is all good, but there are good reasons to consider Aeroplan.
It's actually the opposite. Flight rewards programs need the airline to do buisness. The flights themselves are run at a loss so they can make money off the rewards program. American prices a fare at 1.6~1.7 something cents per seat mile, but the cost to run it is somewhere near 1.9 or 2 cents per seat mile. AAdvantage is so profitable that they can subsidize the gap, and still make money off the program.
Achiving 100% occupancy isn't the real goal. The goal is maximizing overall income. For example, selling 10 seats at $200 is worth less than 8 seats at $300 with 2 empty ($2000 vs. $2400). Airlines' focus on variable pricing structures tries to figure out what each customer is willing to spend. Having a few empty seats is partly a gamble: What are the odds someone will pay more tomorrow for the same seat? Sometimes you will win, sometimes you will lose.
Except it is. Flying empty seats costs nearly every single airline money, especially if the planes are leased or are on power-by-the-hour programs. In the rare occasions the planes are owned outright it's a bit less of a loss. As a pilot the vast majority of my planes lately have been well north of 95% occupancy. I get you're oversimplifying but when your average narrow-body has about 150-200 seats to play with, you can spread the fare prices with much more flexibility to pretty much guarantee every seat will be filled. Then you have the oh-so controversial practice of over-sales. Which from my experience is rarely an issue as several people always fail to show up.
@@aerialbugsmasherbut maximizing revenue will still always take precedence over a full airplane. Many a route I’ve seen go by the wayside with full airplanes because they weren’t profitable. A 80% full plane on a profitable route will always be better if it’s making more overall money. Yes it’s nice to fill all the seats but if that were the only goal, spring break tickets booked 11 months out would be selling cheap and it’s quite the opposite.
While plane tickets are a textbook example of consumers showing their different willingness to pay, in practice that's not true. Because only around 5 to 10% of seats are business or first class. And prices don't wildly change depending on purchase date as they used to: today you can buy an international ticket even a month before the trip and won't pay more or less than if you purchased it six months before.
@@aerialbugsmasher Ideally, the airline would like to sell out the entire airplane to the customers who have the highest willingness to pay for those seats. This is of course impossible. For example, imagine a plane with 200 seats, how does one sell at the price of the customer with the 200th highest willingness to pay without offering that price to someone with a higher willingness to pay (and thus losing revenue). Thus it is a balance of getting revenue by selling every seat and getting the most out of customers who are willing to pay a lot. In the classic monopolist price setting in economics models where price cannot change, it would lead to many empty seats. Airlines, however, can temporally change their prices allowing them to do better. Passenger load factors have risen, but they are still in the low 80% range. Sure some routes may be 100% full, but it may still be profitable to fly non full planes on other routes if you can extract enough premium from the customers (for example, if you have a monopoly on the route like direct from SIN to JFK).
This all reminds me of what Richard Branson once said when someone asked him what the most surefire way to make a million dollars was. "Oh that's easy," replied Branson, the wealthy CEO of Virgin Airlines, "start with a billion, then buy an airline."
When British airways was doing its best to squash Virgin on the Los Angeles route, they actually served fillet steak and small bottles of red wine in economy class. Seems unbelievable now.😂
Seattle isn't a Delta fortress hub and they definitely weren't the first movers there - Alaska was first and have much more marketshare there than Delta.
@@richardgray1601Delta's SEA hub is the worst performing hub out of all the 3 major airlines. If it weren't for international flights, I don't think it would even be around
United left JFK by choice. Their strategy is to have all of Newark Airport to themselves and leave JetBlue, Delta, and American to battle over LaGuardia and JFK. The advantage with Newark is it can accommodate both long and short haul flights
Cargo is always more profitable -- no humans to provide life support, stretching space, and other comforts to. It's part of the reason for checked bag limits and fees, because scaled to a full plane that could be another one or two ULDs that could have sold as an air waybill instead.
You could say they leave by choice, but that choice came from the port authorities denial of additional slots at JFK which United claimed meant they couldn’t compete.
The population centers in Brooklyn, Queens and Long Island aren’t traveling into New Jersey for a flight when JFK is right there. United lost out on that particular crowd.
Bags fly free is brilliant for another reason. Planes do not make money sitting on the ground. If you charge for bags, everyone tries to bring baggage on board and loading/unloading times increase. Allowing free baggage allows loading/unloading to be much, much quicker.
We don't travel with giant trunks over here. and the opposite is true in Europe - it takes longer to unload bags & airports charge the airlines to load them. Budget carriers charge lots for anything larger than carryon, so most people ONLY have carryon.
@@Default78334 I would love to pay for cabin bags on legacy carriers to avoid boarding delays due to the inexperienced-traveller dipshits who try to lug battleship-sized bags aboard flights.
MBA? You don't even mention that legacy carriers get most of their profit from credit card swipe fees and business/ first class...look at the 10Ks if you don't believe me
I would argue that passengers are looking for the least hassle and disruption. Ultra-low-cost carriers have the reputation for being overly complex, understaffed, and full of crazy people. Post-Covid, nobody wants to deal with that. The carrier that has happy staff, calm customers, and a smooth process will be the winner regardless of prices.
There's no such thing as one-size-fits-all and passengers will always be ruthlessly segmented based on what they are willing to pay (generally a derivative of income). There will always be a place for bargain airlines with awful passenger experiences
@@DeadAir21 It depends on one's financials. I'm solidly middle class, and I would never fly Spirit or JetBlue. They both suck. Neither would most of my friends. However, for consumers who are more cost-conscious, budget airlines are an attractive option.
I find Southwest to be balanced in price vs quality. As for ultra low cost carriers, by the time I buy back basic amenities, my bill will be back on par with Southwest.
I remain somewhat loyal to southwest and will try to avoid legacy carriers due to its price. But then again, im a younger recent college grad so maybe im not in the position to consistently afford legacy carriers. Ive almost only flown low cost carriers, and even in the rare case where a passenger was being disruptive [lady was VERY drunk and was yelling at her boyfriend on a Frontier flight], it came off more as humorous to me than anything. I wouldnt choose to fly legacy just for a little extra comfort
One of my favorite channels these days. I feel like understanding these complex business models is important info for consumers to make choices that align with both our finances and our values.
Look up How Airlines Quietly Became Banks on Wendover, pretty good summary. Upshot is that all airlines are loss leaders to shill credit cards and convince midwits that 30% apr is worth it when you get 1% cashback and bOnUs MiLeS!!1!
I tremendously appreciate that this video is not filled with generic stock footage. Bad stock footage is ruining TH-cam. I’ll check out more of this channel’s videos. God bless.
Southwest is no longer a low cost carrier, but many of the older generation just assume they’re the cheapest and book exclusively with them. It’s insane. I consistently pay less than my parents on flights to the same places by booking with American instead of SW, but noooo, they’re always convinced they don’t even need to shop bc Southwest is just always the cheapest!
Agree. If you live in Dallas or Houston you will know plenty of people who EXCLUSIVELY fly Southwest and never even check other prices. It’s rarely cheaper than looking at alternatives at DFW or Bush unless you are definitely checking 2 bags and don’t care about lounges or status perks. Also, a lot of Southwest customers appreciate going to DAL, HOU, and MDW vs DFW, IAH, or ORD. Smaller airports, less fuss, etc.
I argue with people in South Texas about the same thing. SW is rarely cheaper than AA or UA. Plus, the flights it does have are usually awful with multiple stops, horrific layovers, bizarre times.
Fun fact: The reason why Delta has the lowest fuel costs out of all of the airlines is mostly due to the fact that they own Monroe Energy, an oil refinery.
The main issue with being a super low cost airline like Spirit/Frontier is that its uncommon for people to travel without a carry-on/luggage. Since they want to charge for this, customers now price price in the extra $50-100 on their fares and the price comes out more even with airlines that have better reps.
@Sece1 COMAC doesn't make the list either. Their C919 isn't quite certified in western markets and they don't have the production to match incumbents.
@@Sece1 What's the point of an airplane that you can't just take anywhere? C919 isn't certified in the EU and US, and it's parts network isn't nearly as developed as the 737 or A320 family.
Another change. The main carriers have realized that passengers care less and less about how long their layovers are. This allows United, Delta, and American to do less flight banking and spread their demand.
Hence the rise of new and renovated lounges, and rebuilds of terminals altogether. Probably because a more comfortable ground experience is still cheaper and more practical than trying to do similar inflight.
I'm definitely in this camp, I'll take whatever the cheapest is, and if I have a 10 or 12 hour layover, I'll just rent a car and view it as a chance to explore a city I otherwise never would've.
While no airlines controls a majority of the market, I did an analysis a year ago and of the airports I evaluated (IAD, PHL, BWI, DCA), 75% of routes were monopolized by a single airline. That is, for any particular destination, you had only one choice of airline.
That's because airlines established a fortress hub, using nearly all capacity before other airlines had a chance to compete. more examples include DFW, DEN, EWR, CLT, ATL, and MIA.
@@Adumzzinthehouse It's a lot more than just that, but my comment was that the monopoly rules which consider total market are not really the appropriate analysis.
I have to agree. Every time I fly the planes are always full and they need people to check in their carry-on bags so I guess I just fly a very busy route.
Feels like the northern Cali and southern Cali airports all have decent amounts of flights to Central America and Mexico in particular. No one airport dominates that sector compare to Miami which is the de facto Latin American airport for the US. Atlanta for Delta, Houston airports for United and South West, DFW for American Airlines to a certain extent cover Latin America but they all fall behind Miami and JFK for flights to Latin America and the Caribbean.
Yeah but ORD is definitely United centered, it has a huge market share of just Chicago in general, owning the naming rights of the Bulls arena and occupies the second more floors in the Iconic Sears Tower
You briefly touched on it, but not diving into the effect of airline branded credit cards misses a big profit center for the legacy carriers these days.
Living in Philadelphia, my fiancé and myself no longer fly American due to their rising costs as well as their forgoing of economy for premium economy, which we cannot afford in these economic times. So when I look for flights to either Chicago, or Orlando to visit our family and friends, I look at the total costs and 2/3's of the time we pick southwest. A prime example is our upcoming flight to Orlando in December. American Airlines for two people mid-day direct in basic economy would be $709. But when you add in the baggage fees it quickly jumps to $849 for 1 checked bag for each person, and $1029 if we check a second bag. And that's with a complementary upgrade from Basic to Main economy due to my status with American. But with Southwest, the total trip came to $788 for two people, mid-day direct flights, with their two checked bags free policy. Lastly with Frontier, while the base fare is an amazing $409.92, upgrading to the economy bundle to be able to pick our seats together, as well as carry on a bag adds $260 to that. Then the checked bags add an additional $246 for 1 checked bag per person bringing that total to $915.92. If we do 2 checked bags, as with Southwest, it jumps to an astonishing $1241.92 total. That is why we are loyal to Southwest and have flown most of our latest flights with them.
12:11 Hey man, CASM is Cost per Available *Seat* Mile (same as for RASM). Maybe pin a comment in the video for the correction given the limitation to edit the video. Another video idea: Cover the disaster of AA’s 2023 poor sales strategy, led by now fired CCO Vasu Raja. That is a case study of: - Believig a DTC model could work at a premium / legacy airline - Arrogance of treatment to distribution channels - Alienating corporate buyers - Reducing business class capacity to replace for coach seats (B787) - Mistreating the corporate sales force by miserably firing - Hubris from CEO and Doug Parker, still not calling the mistake for what it is (instead, a “refocusing”), as if they don’t make mistakes - Trying to recover lost share and customers - Consecutive quarterly losses to cost in the 1-2 Billion in aggregate, for FY2024 and changing revenue guidance to Wall St - Focusing on the wrong markets - Knee jerk reaction to retire aircraft too soon when COVID started
Getting rid of the 757, 767, and A330 were some of the biggest mistakes of all time. Those planes were used heavily on Key routes, including low-yielding international flights from CLT and PHL. They were also used heavily from PHX, DFW, and MIA hubs that warranted something larger than a 321.
and they shifted to LAX... where they will have 3 year-round destinations and 3 seasonal by the end of this year. I don't think they'll be considering LAX as much of a hub either lol. Entirely east coast focus now
I dont fly legacy because of hubs! I will take a slight increase in cost any day for a direct flight. Living close enough to Orlando i can get direct flights to almist anywhere in the country. So i hope Alligant (which flys out of Sanford), Frontier, Spirit and Alaska dont switch to hubs! Direct flights are ALWAYS better. Who wants to run through an airport, risk loosing luggage or getting stuck in an airport not your destination? I just dont understand why anyone would choose a layover over a direct flight
On your map, you show my state (Wisconsin) as being dominated by Southwest Airlines, but I'm not aware that SWA even has much of a presence here. They may have a few flights into Madison or Milwaukee, I suppose, but most of the state (including Madison and Milwaukee) is dominated by either Delta or United ... Larger cities are served by both, smaller are served by one of them. The sole exception is Eau Claire, which is served by Sun Country. The company offers both local flights and bus service to their Minneapolis hub. Additionally, Groome transportation offers 19 trips a day between Eau Claire and MSP airport, so we end up having more airline choices than Milwaukee, Madison, or Green Bay...
Just want to point out that RASM is not revenue per seat per mile flown, it is revenue per seat-mile flown. You divide the revenue by the product of the number of seats on an aircraft and the number of miles the flight will travel.
We used to have well over 10 international, over seas airlines alone in the 1970s. In the late 2000s we had 7. In those eras, there were some that were even low cost such as ATA Airlines. Now we have three. One is in such a bad state, there are constant mechanical failures seemingly every month. So many great airlines are gone which I luckily got to fly on some before bankruptcy and mergers. I don’t know what the future of the airline industry will be, but the past is looking better than our future.
...Agreed. There are times I still long for the pre-deregulation days. No extra fees, no penalties, only one fare increase per year, more direct flights (that may have made a stop or two enroute but you didn't have to change planes), much more room in coach, and far better cabin service. YEah the fares were relatively high but of you were a savvy traveller you could find discounts. I routinely travelled "space available" which reduced the fare by between 33% - 50% and rarely had to wait for more than one extra flight as there was no overbooking. The one advantage back than was tickets were transferable between carriers as fares were standardised throughout the industry because based on miles flown rather than market popularity (so if three different airlines were serving the same route like Chicago to New York the fare on each was the same. Deregulation looked good on paper but as it turned out in practise, it was a failure. ad the market became oversaturated which put more airlines in financial trouble making them ripe for acquisition by other larger carriers or leading to bankruptcy. I never would have dreamed there would be a day when airlines like Trans World, Eastern, "colorful" Branff, or Pan American were no more.
I’ve always observed this competition with JetBlue and delta at the major JetBlue hubs. In JKF JetBlue has T5 at JFK and delta has T4 but shared with klm, Latam, virgin, emirates, ethiad and more, at Boston JetBlue has Terminal C and Delta Terminal A. Even FLL delta has Terminal B and JetBlue Terminal 5. Right next door competing
No mention of Allegiant? They're an ULCC and they focus a lot on cutting costs. They were posting very narrow loses recently. They are much smaller but seem to be a lot more profitable than the bigger ULC carriers especially during recessionary periods.
Allegiant is sort of a unicorn in the airline industry. They make their money by stimulating demand by flying to vacation destinations from mostly underserved communities, so they don’t have to worry about competing with other airlines on routes like other ULCCs like Spirit or Frontier.
Very true, also considering they're getting brand new 737 MAXs later this year and retiring their old A320s. They also are getting more routes, I'd like to see Allegiant climb towards the top above Spirit and Frontier.
Allegiant is an interesting case. They started as an arm of a travel agency and specialized in connecting tertiary airports to warm weather leisure destinations (e.g. nonstop flights from Minot, ND to Phoenix where they fly out of Mesa, not Sky Harbor) or opening "hubs" in places like Asheville, NC and Appleton, WI.
Oh, this explains a lot. Fortress airports and quotas. The funny thing is, the experience of flying on most of the legacy carriers is generally JUST like flying on Frontier or Spirit these days...tons of upselling, the price ends up being $100-$200 more than the sticker price, and the customer service sucks. The only reason I ever fly them is because sometimes they're the only way to get there.
And now SouthWest announced (probably didn't make it in time for the video), that they're going to be offering assigned seating like the legacies. Low cost carriers also game the US tax system by offering low fares and paying the larger tax on that; whilst fees are taxed at a lower rate, so they are able to keep more of that pie. That's why bag fees are still a thing.
I moved to an American Airlines hub and I’m shocked how much they suck. I nearly got crushed by a falling beam on their jetbridge recently and they didn’t even offer me customer service points. United and Delta offer me points whenever anything goes wrong.
@@freewifi510 if it scared the literal 💩 out of you because of a close call I'm sure you would appreciate at least some points for the loss of your dignity and clothing.
@@rkevic Nope jetways are 100% airport responsibility. I suppose I can't speak for everywhere in the world, but certanly in NA. Airlines *pay* the airport to use them, generaly per aircraft movement. Take the following source from Ottawa. yow.ca/en/node/4105
Simple, timing. You can have the next best thing since sliced bread but if the market isn't ready for it and you have a bit of luck it can very well flop.
..United haf something similar in the late 1960s called "K" or Commuter class. on flights between Chicago, Denver, the West coast and Hawaii where passengers only received complimentary coffee and no meal service (though other beverages were available for purchase). Before that they offered three levels of cabin service referred to as "Red White and Blue" on transcontinental jet flights. The "Red" cabin was their signature "Red Carpet" first class with sumptuous 6 course meals and the roomiest seats. The "White" cabin was what they referred to as their "One Class" service with 2 + 3 seating and four course meals. The "Blue" cabin behind the wings was their coach service which had 3 +3 seating, and basic meal service.
As a resident of Southwest Florida, I’m surprised Allegiant wasn’t included, as it is pretty impactful down here. They have several “fortresses” in Florida that are almost exclusively served by Allegiant, like Sanford, St Pete, and Punta Gorda. But without the hub and spoke model in place, is there even a benefit to controlling an airport like this? I know Allegiant operates slightly different than the budget airlines mentioned in this video, and it would be cool to see if it is struggling to adapt as well, or if it is doing better when competing with legacy airlines.
Definitely. They offer less seats and more seats on certain routes. But American still has more routes. Namely the East coast, more mexico destinations, and London.
A huge problem that carriers such as spirit, among a few others are having, is that the engines on certain A320 NEO aircraft are having serious issues that cost lots of money to fix. The down fall of low cost is not solely just because it is not viable anymore.
Hallelujah 🙌🏻!!!!! The daily jesus devotional has been a huge part of my transformation, God is good 🙌🏻🙌🏻. I was owing a loan of $49,000 to the bank for my son's brain surgery, Now I'm no longer in debt after I invested $11,000 and got my payout of $290,500 every month…God bless Ms Susan Jane Christy ❤️
I've always wanted to be involved for a long time but the volatility in the price has been very confusing to me. Although I have watched a lot of TH-cam videos about it but I still find it hard to understand.
Barely any mention of Alaska Airlines??? Delta may have a hub at SEA but it is and has always been Alaska’s territory. Alaska is also definitely a legacy airline as they’ve been around for decades, cover most of the West Coast if not all of it including Alaska and Hawaii, their flights aren’t exactly for the budget conscious, and like most other legacy airlines are big on their credit cards, loyalty programs, lounges, etc. For anyone living in the Cascadia region, I’d be willing to bet Alaska is the go-to airline especially considering their membership in the OneWorld alliance.
They have the best airline rewards program and credit card in the industry. Also, the only airline that allows (per distance of flight) lounge access just by buying a seat or a day pass. They also offer free checked bags (do it at the gate it's free)
One of the most profitable legacy carriers in the country who consistently ranks in the top 3 airlines every year in the US, who also continues to grow when the other airlines downsize, and since ASA261 has ranked one of the most safest airlines to travel on due to the safety culture the airline adopted after the mistakes of 261. Nope, they never get mentioned.
13:35. Southwest actually has far more legroom than Spirit, Frontier, or Allegian and more than basic economy on any legacy carrier. 32” on Southwest. Don’t lump them in with the ULCC’s.
Ryanair CEO said they came to the U.S. to watch Southwest’s operations and then emulated their airport operations, particularly their fast turnaround model. Ryanair has different scheduling and pricing models but they have some commonality.
People are generally willing to pay more in the US because flights are longer and there’s fewer other options. For most people it’s either fly a few hours or drive a few days.
You listed a legacy airline as a new low cost carrier. It is more of a low cost carrier now as even AA is, but I don't think any airline started in the 1930s is considered anything but a Legacy Carrier.
AA & DL forced UA out of JFK? No. EWR was the CO’s NYC fortress hub. UA merges with CO, EWR becomes UA’s NYC fortress hub. UA never really had a strong presence at JFK to begin with so it makes sense for their business model to just pull out.
If I'm not mistaken, UA and DL basically swapped slots between EWR and JFK: UA took DLs slots at EWR, and DL took UA's slots at JFK. EWR is a hub for UA and DL had a larger presence at JFK. Everyone is happy.
@TC-cd5sm It was the original plan, then EWR became non slots-controlled airport. Delta end up obtaining 20+ JFK slots from UA through long term lease, and keeping flying EWR.
Actually, a number of discount airlines seem to deliberately position themselves at a hub, to protect themselves. A discount airline based itself at Colorado Springs, but United, with a hub in Denver, undercut the discount airline on flights from the Springs, but not their lucrative Denver flights. It got to the point that so many people were driving to Denver to catch a cheap United flight out of COS (only to be flown to United's hub in Denver for their connection), that United flew two flights from COS to DEN twenty minutes apart, one a jumbo jet, 18 minutes flying time. The discount airline moved to Denver, where United couldn't discount all the competing flights without losing more profit. Southwest started in hub cities Dallas and Houston, then Chicago and others. JetBlue started out of NYC, a metropolis that multiple majors had hubs in. Other discounts started out of Atlanta or Minneapolis. Only the ultra low cost airlines were from small rural city airports to Las Vegas or Florida.
Wait you're saying that ppl from Denver drove to Colorado Springs to take the cheaper flight that brought them back to Denver? Which is the low cost carrier in this story?
As someone who travels semi regularly, I will only fly Delta. You pay a bit more, but the service is great, the seats are pretty comfortable (I’m 6’2 so if it’s fine for me it should be for most others) you get free inflight entertainment (movies,tv,games,) and the lounges are great. Their Atlanta hub is huge, but it’s ran like a Swiss watch.
Delta executive compensation for 2023 was $84 million. "Not much fat to trim" is a f*cking LIE. Pay these jumped up secretaries a lot less, and maybe we could pay crews a living wage, and you could sit on an economy class seat without having to fold yourself in half.
@@todoldtrafford $84 million is not a 1-time payment made in a vacuum. It is annual. 10 years - $840 million, etc. So yes, on an annual basis, it would easily make a difference.
Wow, the info. and analysis was impressive. (new to the channel) I work in the industry at a low level, and this analysis made the whole industry make so much more sense.
Your comment on LGA vs. JFK has a critical flaw. JFK has a direct connection to the subway, and LGA does not. The only way commutes to JFK can take "hours" is if the Customer is dumb enough to go there by road. Getting from Manhattan or Brooklyn to JFK on the A train or LIRR takes less than an hour even at rush hour. LGA, on the other hand, is only accessible by road, and has no direct connection to the subway. The bus between LGA and the subway is constantly stuck in traffic. The last time I flew into LGA, the traffic was so congested that the bus ride to the subway took almost as long as my flight up from Tampa. And yet, over and over, NIMBYs in Queens, or the State, or the MTA, or the Port Authority have nixed a direct connection to LGA. They may call LGA "New York City's Airport", but JFK and even Newark are more integrated into the City than LGA.
lol i live in NYC and frequently depart or arrive at JFK because of the subway/air train connections 🤣 this guy missed out on a lot of details that would be caught by somewhat seasoned travelers
@@timhershel2940that makes sense, although flight options are very limited at LGA. other than the 2,400 km / 1,500 mile perimeter rule, the only flight options are domestically and to Canada. there is a much bigger and better world than traveling inside America
@@necrosilencehs I mean yeah JFK had been the international hub since the 60's. TWA & Pan Am mad massive hubs there. But LGA is still preferable for a very large amount people. JetBlue flies plenty of flights out of there as well now that's telling. Those slots are very highly sought after. Don't get me wrong I much personally prefer JFK too since I'm on Long Island.
...yeah I miss them. They treated my old hometown of Milwaukee much better than Delta does today. ALso loved their Worldperks programme one of the best as they always seemed to have promos that gave bonus miles and it something ever went wrong, they compensated me very well for the trouble even if it wasn't their fault.
For most of the trips I take the “low cost” carriers are barely if at all cheaper and usually a lot more hassle. Once all the (usually hidden) fees are accounted for the difference is often minimal and in exchange I get a tiny seat, irritating fees, baggage limits, annoying boarding procedures, a mystery seat, and bigger chances of delays. What a deal…
Can you talk about doctors, especially plastic surgeons, neurologist, ophthalmologist, orthopedist, family docotrs, or hospital and private clinic business models in general?
As an very infrequent flyer, I love the predictability and flexibility of Amtrak I not only know what the fare will be before I look, I also know which tickets I can change without charge. Plus baggage limits are effectively non-existent.
The video title made me think I was going to dislike the airlines industry more than I do but I actually respect what these airlines do to increase profits under heavy regulation that restricts them from having more than 20% share of the entire market. The fortress hubs are a genius "small-scale" strategy for increasing gross margins in specific markets.
You say Alaska is a budget airline and southwest was the first to offer free bags but Alaska has had free bags for as long as I can remember. In Alaska Delta is considered the cheap option trying to undercut Alaska Air lol.
21:10 JFK also had no midday departures. All flights left in the late afternoon/evening slots for Europe. That was the key opportunity the JetBlue founder saw. Pick up midday jfk slots for cheap
26:36 Yeah these credit cards & loyalty programs are MUCH bigger than the few seconds spent on them, I'd say. A follow up video where these developments are given the time they warrant would be interesting.
Your opening demonstrates what a lot of people don’t understand, they THINK we have a free market system, we don’t. The government, who Fs up everything it touches, get involved to “regulate” things to keep it fair. If they just let the free market take care of itself, it would self correct.
You’re misleading people a little bit. While Delta does have a sizable presence in Boston, it’s not a fortress and it’s not a hub, it’s just a focus city. No one is delta captive in Boston unlike Atlanta. And JFK is not a delta fortress either
@@Smg22345 Yep. It's Delta (Terminal A) and JetBlue (Terminal C) that dominate Logan. Delta turned Boston into a hub just before Covid. Delta technically has a "fortress" in Logan too. It has Terminal A all to itself and isn't connected to the rest of Logan post-security.
Boston is absolutely a Delta hub as Delta has even opened up a pilot base there and operates 9 international flights. JFK is also a significant, maybe not fortress, but significant hub of Delta’s since they operate over 30% of the traffic. No other carrier has that much share in JFK
12:12 CASM is Cost per Available Seat Mile (and Not Square Mile). Great informational episode bro. I truly appreciate the research and exquisite presentation.
@@murdelabop It's not high speed but I make sure I never take for granted the fact that I live in an area of the east coast that has rail everywhere I need to go. (DC, NYC, Philly, and Boston)
With rail also feeding into airports, like Amsterdams Schipol Airport where there's a 20 track railroad station under baggage claim to every corner of the Netherlands
Just a suggestion: your thumbnail is amazing but New Jersey has two additional airports: ACY which is ran by Spirit Airlines. TTN which is ran by Frontier Airlines.
I just took my first trip on Southwest. My Delta flight was cancelled due to the Crowdstrike issue. What an awful airline! Planes were OK but not clean. It was the passenegers attracted to the “low fares “. Sixteen wheelchairs loaded up in Chicago. One was needed in Houston. Jetway Jesus cured them, apparently. SWA announced they are going to assigned seating next year but I bet this doesn’t cure the “gimmee, gimmee” crowd.
One big reason people switched back to the big 3 when the big 3 introduced their "basic" everything-costs-extra fares is that the big 3 have more flights to more places at more convenient times.
Sun Country would be an interesting company to consider in the future, given their ULCC hub/spoke model out of Minneapolis, a Delta fortress hub. Essentially it seems to be the antithesis to this video.
I hate to be controversial, but I'm calling it: this video is BETTER than something Wendover Productions might do, and this topic is exactly up their alley. Ratio me but I'm not backing down! Subscribed!
You mentioned that US legacy carriers have a near monopoly on international travel to Asia and Europe. Is that accurate? Must be 50 or so very good airlines flying from USA to Asia. I have noticed that some of the foreign international carriers tend to have better service and lower load factors. Curious if you have thoughts on how they do that? Subsidies from countries of foreign carriers, lower costs, better business models?
There was no charge for bags 20 years ago. F JetBlue started that. Also, Alaska is a legacy carrier and the fifth largest in the U.S. Why were they all but ignored?
New to the channel but very informative! It would be cool to see a video conparing the the same thing but with the railroad passenger service when private companies provided such services.
your graph at 3:05 doesnt make any sense. you just said a moment before that fuel was the most expensive cost, followed by labor. then you show a bar graph which says the exact opposite.
Fuel is the most expensive direct operating costs, the graph referred to total operating costs which includes labor costs that count as indirect like corporate and operations employees that cannot be allocated directly to each flight.
Perhaps is my PNW bias, but I really oppose you lumping Alaska Airlines in with the low cost carriers whether explicitly or implicitly by putting them on the charts. They are a smaller market share yes, but they do not operate as a low cost carrier, simply as a lower volume version so the mainline carriers with some niche flying within the state of Alaska.
📦 Save time and money when you ship with Rollo. Use code MODERNMBA1 to get $10 off your first shipment. www.rollo.com/modernmba/
can confirm Rollo is awesome
I clicked on the Rollo promo link and the page says “Use promo code before 01/31/2024”
Lets play this out. Ultra low cost carriers go out of business. Then legacy carriers jack up prices and then after a few years the low cost model makes sense again and you will be back to square one. We are stuck in an endless loop.
The boom and bust loop of the system right?
almost like markets don’t make sense 😂😂😂😂😂😂
Why would they go out of business when they're profitable? Their profits may not be big but they are doing fine. This is what a properly regulated industry should look like. As a consumer I can pick an airline that provides me with the best service for the price. If you adjust for inflation air travel has only been getting cheaper.
I don't give a shit if investors can't get rich off of airlines companies. Important services like air travel should not be turned into money extraction schemes like so many other industries have turned into over the last decade.
So long as there are good options that JUST WORK, is stable and steady, then I see no issue. But late stage capitalism will demand some enshitification to decay this stability. Soon you won't have good options.
Life is an endless loop - until we go extinct lol
Sometimes it feels like airlines are in a competition to see which one can abuse you the most without committing an outright crime.
As airline crew (Pilot) it feels like passengers think we are their enemies. Please remember as front line employees none of us are into this for making passengers miserable. There's only so much we can do before our corporate overlords have us fired, or regulatory agencies get us fined, decertified, or jailed. This is an incredibly complex operation and there's so much that goes on behind the scenes that many people are oblivious to. Nothing is ever a simple answer or solution when things go wrong.
The ugly truth nobody will admit is that passengers are their own worst enemies. It's also a symptom of late stage capitalism. If everybody still paid $2000 round trip in COACH class only to fly a few states away like was commonplace 50 years ago before airline deregulation, everybody could get the red carpet treatment. Back then only the upper middle class could fly.
Nowadays, nearly anybody short of the homeless can afford to fly at least once a year, and you can still occasionally find fares for 2 digits, but people will expect lobster and rib eye meals, unlimited ticket changes and refunds, 500lbs of free checked bags, and complimentary lap dances from flight attendants. The demand is for dirt-cheap fares, yet everybody acts surprised when the supply is little more than a chair in an aluminum tube with some caveats. All those perks cost the airlines a lot of money.
For what it's worth we are all keenly aware air travel sucks nowadays. When flights get cancelled, planes break, ATC has a meltdown, etc etc that affects us far more than passengers, since as pilots we may be working 4 or more flights a day. Flight attendants have less restrictive rest rules so they could be flying much more than we do.
Anyways, TL;DR, yes, we know, it sucks, but for the love of all is holy don't take it out on the front facing airline employees. Blame the system.
@@aerialbugsmasherI was going to say the same thing as an aircrew but your words are so much better than mine!! 😅 I would love to see the days where people used to dress up to fly rather than wearing pajamas. If I have to wear a suit and tie to fly, why can’t they wear a collared shirt and look presentable like we have to do when we fly non-rev or positive space. I say the big three need to raise fares together so then the cheap folk can fly exclusively on Spirit, Frontier, and Allegiant and get exactly what they pay for. When I am a paying customer, I refuse to fly in steerage in the back. I pay the extra fees for upgraded economy or first class. I think the big three should become exclusive for those looking for a better experience. Too many times others are affected by the actions of those who demand Filet Mignon on a chopped steak budget.
dude that’s just how corporations operate under a capitalistic system
You just described the system of capitalism
@@aerialbugsmasher you proven during covid you are the enemy
you will be held accountable wamn
ah yes will be painful, sorry
You mean to tell me that southwest got to where it is today by actually prioritizing better service to customers over maximized profits at all costs? More companies in today's world need to be like this.
They also happen to have an awful track record of safety, especially in the last year.
It seems like when the other airlines hit rock bottom of screwing the customer, they dig deeper. Yes, that is for you companies that charge for carry ons and to choose specific basic seats.
Those items are no extra expense to the airline and the charges are only there to penalize the customer.
@mind-of-neo Every company has the same goal of maximizing profits. To do otherwise would be irresponsible. Of course, each company may choose its own path to the common goal.
Southwest killed hub and spoke routes. They changed everything. I miss hub and spoke.
@@johnweiland9389 (Sorry for rambling, but I am very passionate about this topic. 😁) That is not entirely true. While Southwest does serve point-to-point routes, they also operate many hubs, including MDW, DAL, HOU, BWI, DEN, and a few others. If you live near any of these airports, you can probably find a direct flight on Southwest to nearly any city. They prefer the term "focus cities," but these are definitely hubs, and my home airport (DEN) is the largest. Most of the point-to-point routes are really just stopovers between two hubs. For example, I have flown DEN-MAF, but that is really designed as a DEN-DAL-DEN flight, with a short stopover in Midland to let a handful of passengers on/off. The hub and spoke system is very effective and efficient, which is why all the major players use it. It is also a drawback for the smaller airlines that do not have a hub. If a flight is canceled by Frontier or Spirit, the passengers are completely screwed because a) there is probably no other flight that day, b) the airline has no substitute planes at that airport, and c) these airlines do not interline with the legacy 3. If my United flight is cancelled, they will either put me on the next UA flight, or re-book me on a flight with AA or DL. Easy peasy. (Not sure if Alaska and JetBlue are part of the program, since they have joined OneWorld?) By contrast, a few years back, Frontier cancelled a flight to Cabo, I think from Phoenix. They only flew that route once a week, and next week's flight was already sold out, so 150 passengers on the outbound and 150 passengers on the same day return were SOL. Of course, Frontier was happy to refund the $99 airfare that was booked 6 months ago, but 300 folks had to find a last minute ticket on another carrier, and they definitely paid more than $99!
Look you know something's gone wrong when Southwest owns parts of the northeast.
oink oink
😂😂
That is wrong. Southwest hates the northeast, and serves it only to represent. Northeasterners are the worst passengers, and the crappy airports and weather there screw up their business model.
At least the actual Northeast Airlines were bought by Delta, not Southwest - otherwise the whole American budget airline market would've folded in on itself and collapsed into a singularity 😂
Or perhaps a singularity would've required Northwest Airlines to be part of that merger too 😄
Southwest is one of the only good ones left
I love how Alaska Airlines ALWAYS gets left out of or ignored in the conversation, when they are a legacy carrier and has remained profitable and consistently grows when the other airlines downsize. The airline has the most flights on the west coast of the US and has the most flights to Mexico and Hawaii from the west coast. Also, Seattle is not a fortress hub for Delta. Alaska still dominates Delta out of Seattle and has the most marketshare. 13:13 Alaska beats everyone else but no mention.
I agree it was a mistake to ignore Alaska. I would beg to differ that Alaska beats Southwest. No they don't despite Southwest's huge mess right now. Alaska has a lot of problems too.
@@flashoflight8160 Every airline has issues. Alaska does beat Southwest in certain markets and competes with them out of San Diego.
I'm in Seattle so I fly Alaska all the time. Whenever anything goes wrong with my flight, they compensate me--without fail. None of the other major airlines seem to do so.
I think it's because a lot of people don't know how to "categorize" Alaska. They ride the gray area between legacy and LCC, and have such a territorial advantage on the west coast they really are a separate third column... much like Hawaiian which may be joining Alaska as a single company soon.
I agree as well and am a proud Alaska employee! I do think it's fair to call Seatac fortress hub for Delta, though. Mainly because of their international Asian market out of Seatac. Alaska and Delta don't currently compete in that market. So, it's hard to compare their Seattle operations that way. But Alaska certainly owns the largest portion of the Seattle gates. Concourse C, N, and D (with the exception of 3 D gates) are only Alaska operations.
I feel like what should have been mentioned was credit card deals which I feel like is the bulk of the profits.
Exactly. A huge portion of the the swipe fees we all pay goes directly to the airlines.
Business owners raise prices on everyone to bear these costs.
Yeah, at this point in my life, my loyalty has shifted somewhat. In my younger years I simply gravitated towards whoever was the cheapest. Now that I have a travel card, my loyalty is to whichever flight can get me the best "bang for buck" with rewards points. Sure the Air Canada flight I'm looking at costs less money and points than a similar flight from American Airlines or United, but ask any frequent international flyer and they'll tell you that there's some inconvenient reasons for that...
@@UndeadPorcupineAeroplan is, however, still the best rewards program in the world right now though. If you're a US-Origin passenger, you're trading cost and better upgrade options for a connection without losing loyalty benefits. It's especially great if you're a United flier because of their JV, where UA flights can gain you status on AC, which give you most of the same benefits on UA (through Star Alliance Silver/Gold), while giving you real benefits when flying internationally (better upgrade options, far better points utilization, cheaper flights, etc). Unless you live in a specific city that hosts the likes of SFO, LAX, JFK, IAD, ORD, DFW, ATL, or EWR, you are almost always required to connect somewhere in the US to travel internationally. What difference does it make for someone living in Indianapolis having to transit through YYZ or YVR when compared to transiting through SFO or LAX to get to Tokyo?
That's not to say that everything is all good, but there are good reasons to consider Aeroplan.
It's actually the opposite. Flight rewards programs need the airline to do buisness. The flights themselves are run at a loss so they can make money off the rewards program.
American prices a fare at 1.6~1.7 something cents per seat mile, but the cost to run it is somewhere near 1.9 or 2 cents per seat mile. AAdvantage is so profitable that they can subsidize the gap, and still make money off the program.
@@kingawsume isn’t that what I said? Credit card (frequent flyer miles) deals make the bulk of the profits for these legacy airlines.
Achiving 100% occupancy isn't the real goal. The goal is maximizing overall income.
For example, selling 10 seats at $200 is worth less than 8 seats at $300 with 2 empty ($2000 vs. $2400).
Airlines' focus on variable pricing structures tries to figure out what each customer is willing to spend. Having a few empty seats is partly a gamble: What are the odds someone will pay more tomorrow for the same seat?
Sometimes you will win, sometimes you will lose.
Some were born to sing the blues
Except it is. Flying empty seats costs nearly every single airline money, especially if the planes are leased or are on power-by-the-hour programs. In the rare occasions the planes are owned outright it's a bit less of a loss. As a pilot the vast majority of my planes lately have been well north of 95% occupancy. I get you're oversimplifying but when your average narrow-body has about 150-200 seats to play with, you can spread the fare prices with much more flexibility to pretty much guarantee every seat will be filled. Then you have the oh-so controversial practice of over-sales. Which from my experience is rarely an issue as several people always fail to show up.
@@aerialbugsmasherbut maximizing revenue will still always take precedence over a full airplane. Many a route I’ve seen go by the wayside with full airplanes because they weren’t profitable. A 80% full plane on a profitable route will always be better if it’s making more overall money. Yes it’s nice to fill all the seats but if that were the only goal, spring break tickets booked 11 months out would be selling cheap and it’s quite the opposite.
While plane tickets are a textbook example of consumers showing their different willingness to pay, in practice that's not true. Because only around 5 to 10% of seats are business or first class. And prices don't wildly change depending on purchase date as they used to: today you can buy an international ticket even a month before the trip and won't pay more or less than if you purchased it six months before.
@@aerialbugsmasher Ideally, the airline would like to sell out the entire airplane to the customers who have the highest willingness to pay for those seats. This is of course impossible. For example, imagine a plane with 200 seats, how does one sell at the price of the customer with the 200th highest willingness to pay without offering that price to someone with a higher willingness to pay (and thus losing revenue). Thus it is a balance of getting revenue by selling every seat and getting the most out of customers who are willing to pay a lot. In the classic monopolist price setting in economics models where price cannot change, it would lead to many empty seats. Airlines, however, can temporally change their prices allowing them to do better. Passenger load factors have risen, but they are still in the low 80% range. Sure some routes may be 100% full, but it may still be profitable to fly non full planes on other routes if you can extract enough premium from the customers (for example, if you have a monopoly on the route like direct from SIN to JFK).
This all reminds me of what Richard Branson once said when someone asked him what the most surefire way to make a million dollars was. "Oh that's easy," replied Branson, the wealthy CEO of Virgin Airlines, "start with a billion, then buy an airline."
Same joke has been made about buying a motorsports racing team 😂
When British airways was doing its best to squash Virgin on the Los Angeles route, they actually served fillet steak and small bottles of red wine in economy class. Seems unbelievable now.😂
Seattle isn't a Delta fortress hub and they definitely weren't the first movers there - Alaska was first and have much more marketshare there than Delta.
But delta has been trying their hardest to make it so, it’s a critical part of their network and a big base for them, not to mention a crew base.
@@richardgray1601 trying, yes.
That doesn't change the facts as they currently stand though.
Alaska seems missing from most of the video.
@@richardgray1601Delta's SEA hub is the worst performing hub out of all the 3 major airlines. If it weren't for international flights, I don't think it would even be around
Alaska and delta partnered awhile ago. Delta used Alaska as a cheaper regional carrier
United left JFK by choice. Their strategy is to have all of Newark Airport to themselves and leave JetBlue, Delta, and American to battle over LaGuardia and JFK. The advantage with Newark is it can accommodate both long and short haul flights
Yess you’re spot on.! They’re also parked right next to the shipping yard and trains. United makes money for carrying cargo more than most.
Cargo is always more profitable -- no humans to provide life support, stretching space, and other comforts to. It's part of the reason for checked bag limits and fees, because scaled to a full plane that could be another one or two ULDs that could have sold as an air waybill instead.
You could say they leave by choice, but that choice came from the port authorities denial of additional slots at JFK which United claimed meant they couldn’t compete.
They've stated publicly that it was a mistake
The population centers in Brooklyn, Queens and Long Island aren’t traveling into New Jersey for a flight when JFK is right there. United lost out on that particular crowd.
Bags fly free is brilliant for another reason. Planes do not make money sitting on the ground. If you charge for bags, everyone tries to bring baggage on board and loading/unloading times increase. Allowing free baggage allows loading/unloading to be much, much quicker.
Yeah, speeding up turnovers more than makes up for the nickel & diming lost from not paying for checked bags
Yep, that's why Spirit actually charges more for a carry-on than for a checked bag.
We don't travel with giant trunks over here. and the opposite is true in Europe - it takes longer to unload bags & airports charge the airlines to load them.
Budget carriers charge lots for anything larger than carryon, so most people ONLY have carryon.
@@Default78334 I would love to pay for cabin bags on legacy carriers to avoid boarding delays due to the inexperienced-traveller dipshits who try to lug battleship-sized bags aboard flights.
That could also be avoided by the gate crews nipping that before folks even get on
MBA? You don't even mention that legacy carriers get most of their profit from credit card swipe fees and business/ first class...look at the 10Ks if you don't believe me
Or just be your own credit card
What's 10K?
@@genghiskhan6688 10K is United membership program's highest tier
Securities and Exchange filing form.
@@genghiskhan6688 looool
I would argue that passengers are looking for the least hassle and disruption. Ultra-low-cost carriers have the reputation for being overly complex, understaffed, and full of crazy people. Post-Covid, nobody wants to deal with that. The carrier that has happy staff, calm customers, and a smooth process will be the winner regardless of prices.
Maybe in a world without the inflation 2022 maybe. But price will always be the leader. People will take whoever gets them there the cheapest.
There's no such thing as one-size-fits-all and passengers will always be ruthlessly segmented based on what they are willing to pay (generally a derivative of income).
There will always be a place for bargain airlines with awful passenger experiences
@@DeadAir21 It depends on one's financials.
I'm solidly middle class, and I would never fly Spirit or JetBlue. They both suck. Neither would most of my friends. However, for consumers who are more cost-conscious, budget airlines are an attractive option.
I find Southwest to be balanced in price vs quality. As for ultra low cost carriers, by the time I buy back basic amenities, my bill will be back on par with Southwest.
I remain somewhat loyal to southwest and will try to avoid legacy carriers due to its price. But then again, im a younger recent college grad so maybe im not in the position to consistently afford legacy carriers. Ive almost only flown low cost carriers, and even in the rare case where a passenger was being disruptive [lady was VERY drunk and was yelling at her boyfriend on a Frontier flight], it came off more as humorous to me than anything. I wouldnt choose to fly legacy just for a little extra comfort
One of my favorite channels these days. I feel like understanding these complex business models is important info for consumers to make choices that align with both our finances and our values.
Would be very interested to see you take this approach to examining the economics of loyalty programs and the Airline alliances
Look up How Airlines Quietly Became Banks on Wendover, pretty good summary. Upshot is that all airlines are loss leaders to shill credit cards and convince midwits that 30% apr is worth it when you get 1% cashback and bOnUs MiLeS!!1!
I tremendously appreciate that this video is not filled with generic stock footage. Bad stock footage is ruining TH-cam. I’ll check out more of this channel’s videos. God bless.
Southwest is no longer a low cost carrier, but many of the older generation just assume they’re the cheapest and book exclusively with them. It’s insane. I consistently pay less than my parents on flights to the same places by booking with American instead of SW, but noooo, they’re always convinced they don’t even need to shop bc Southwest is just always the cheapest!
Agree. If you live in Dallas or Houston you will know plenty of people who EXCLUSIVELY fly Southwest and never even check other prices. It’s rarely cheaper than looking at alternatives at DFW or Bush unless you are definitely checking 2 bags and don’t care about lounges or status perks.
Also, a lot of Southwest customers appreciate going to DAL, HOU, and MDW vs DFW, IAH, or ORD. Smaller airports, less fuss, etc.
@@danielb2286 bingo. My parents are in east TX lol
I argue with people in South Texas about the same thing. SW is rarely cheaper than AA or UA. Plus, the flights it does have are usually awful with multiple stops, horrific layovers, bizarre times.
Seattle isn't a fortress hub for Delta. It's not even close. Alaska controls over 50% of that market, with Delta controlling less than 20%.
Fun fact: The reason why Delta has the lowest fuel costs out of all of the airlines is mostly due to the fact that they own Monroe Energy, an oil refinery.
Vertical integration allows cost controls
not any more
The main issue with being a super low cost airline like Spirit/Frontier is that its uncommon for people to travel without a carry-on/luggage. Since they want to charge for this, customers now price price in the extra $50-100 on their fares and the price comes out more even with airlines that have better reps.
You should make a video on the top 3 aerospace players: boeing, airbus, and embraer
Not sure if embraer would make the list. Maybe with comac?
@@Sece1 Nah, it's pretty much just Boeing vs. Airbus
@Sece1 COMAC doesn't make the list either. Their C919 isn't quite certified in western markets and they don't have the production to match incumbents.
@@No-mq5lw you gotta keep in mind there is a world outside of the west aka China.
@@Sece1 What's the point of an airplane that you can't just take anywhere? C919 isn't certified in the EU and US, and it's parts network isn't nearly as developed as the 737 or A320 family.
Another change. The main carriers have realized that passengers care less and less about how long their layovers are. This allows United, Delta, and American to do less flight banking and spread their demand.
Hence the rise of new and renovated lounges, and rebuilds of terminals altogether. Probably because a more comfortable ground experience is still cheaper and more practical than trying to do similar inflight.
I'm definitely in this camp, I'll take whatever the cheapest is, and if I have a 10 or 12 hour layover, I'll just rent a car and view it as a chance to explore a city I otherwise never would've.
@@doujinflipairport lounge + cheap seat is the best middle ground especially when it's a credit card lounge
While no airlines controls a majority of the market, I did an analysis a year ago and of the airports I evaluated (IAD, PHL, BWI, DCA), 75% of routes were monopolized by a single airline. That is, for any particular destination, you had only one choice of airline.
That's much like cable / internet
That's because airlines established a fortress hub, using nearly all capacity before other airlines had a chance to compete. more examples include DFW, DEN, EWR, CLT, ATL, and MIA.
@@Adumzzinthehouse It's a lot more than just that, but my comment was that the monopoly rules which consider total market are not really the appropriate analysis.
That's only true for the dumb people that insist on nonstop flights and avoid using connecting flights.
It’s interesting that they say that almost 20% of seats are unsold, I feel like I’ve only ever been on completely full flights.
Just means there is another flight with 60% fill
Maybe it's the routes, because everything I've flown out of LAX is packed
@@vaughngaminghd yeah I live in LA and grew up in Denver, both major airport hubs so I guess I never took smaller connections
I have to agree. Every time I fly the planes are always full and they need people to check in their carry-on bags so I guess I just fly a very busy route.
8:06 - BIG correction: SFO only serves as a gateway to part of Central America. MIA works best as a gateway for LATAM.
Feels like the northern Cali and southern Cali airports all have decent amounts of flights to Central America and Mexico in particular. No one airport dominates that sector compare to Miami which is the de facto Latin American airport for the US. Atlanta for Delta, Houston airports for United and South West, DFW for American Airlines to a certain extent cover Latin America but they all fall behind Miami and JFK for flights to Latin America and the Caribbean.
ORD is a hub for american and united not just united. Its one of amercian's largest hubs.
Yeah but ORD is definitely United centered, it has a huge market share of just Chicago in general, owning the naming rights of the Bulls arena and occupies the second more floors in the Iconic Sears Tower
ORD is not an American hub.
@@TheFishingNomad Yes it is. Its their second busiest hub behind dfw.
@@tomsawyerismewith mostly RJs.
@@TheFishingNomadyes it is
You briefly touched on it, but not diving into the effect of airline branded credit cards misses a big profit center for the legacy carriers these days.
Living in Philadelphia, my fiancé and myself no longer fly American due to their rising costs as well as their forgoing of economy for premium economy, which we cannot afford in these economic times.
So when I look for flights to either Chicago, or Orlando to visit our family and friends, I look at the total costs and 2/3's of the time we pick southwest.
A prime example is our upcoming flight to Orlando in December. American Airlines for two people mid-day direct in basic economy would be $709. But when you add in the baggage fees it quickly jumps to $849 for 1 checked bag for each person, and $1029 if we check a second bag. And that's with a complementary upgrade from Basic to Main economy due to my status with American.
But with Southwest, the total trip came to $788 for two people, mid-day direct flights, with their two checked bags free policy.
Lastly with Frontier, while the base fare is an amazing $409.92, upgrading to the economy bundle to be able to pick our seats together, as well as carry on a bag adds $260 to that. Then the checked bags add an additional $246 for 1 checked bag per person bringing that total to $915.92. If we do 2 checked bags, as with Southwest, it jumps to an astonishing $1241.92 total.
That is why we are loyal to Southwest and have flown most of our latest flights with them.
12:11 Hey man, CASM is Cost per Available *Seat* Mile (same as for RASM). Maybe pin a comment in the video for the correction given the limitation to edit the video.
Another video idea: Cover the disaster of AA’s 2023 poor sales strategy, led by now fired CCO Vasu Raja. That is a case study of:
- Believig a DTC model could work at a premium / legacy airline
- Arrogance of treatment to distribution channels
- Alienating corporate buyers
- Reducing business class capacity to replace for coach seats (B787)
- Mistreating the corporate sales force by miserably firing
- Hubris from CEO and Doug Parker, still not calling the mistake for what it is (instead, a “refocusing”), as if they don’t make mistakes
- Trying to recover lost share and customers
- Consecutive quarterly losses to cost in the 1-2 Billion in aggregate, for FY2024 and changing revenue guidance to Wall St
- Focusing on the wrong markets
- Knee jerk reaction to retire aircraft too soon when COVID started
How did he try to do DTC?
@@nikilragav Cutting off corporate travel agents.
Getting rid of the 757, 767, and A330 were some of the biggest mistakes of all time. Those planes were used heavily on Key routes, including low-yielding international flights from CLT and PHL. They were also used heavily from PHX, DFW, and MIA hubs that warranted something larger than a 321.
A bigger problem at 12:11 is that the chart expresses RASM & CASM in $. The figures show are actually in cents.
It got so bad for jetBlue, they pulled out of Long Beach, CA as their west coast hub...
and they shifted to LAX... where they will have 3 year-round destinations and 3 seasonal by the end of this year. I don't think they'll be considering LAX as much of a hub either lol. Entirely east coast focus now
JetBlue primarily operates its east coast hubs more for their newer Europe routes
4:50 - "United CEO says… thanks to poor customer service…"
That's rich coming from United's CEO.
I dont fly legacy because of hubs! I will take a slight increase in cost any day for a direct flight. Living close enough to Orlando i can get direct flights to almist anywhere in the country. So i hope Alligant (which flys out of Sanford), Frontier, Spirit and Alaska dont switch to hubs! Direct flights are ALWAYS better. Who wants to run through an airport, risk loosing luggage or getting stuck in an airport not your destination? I just dont understand why anyone would choose a layover over a direct flight
Agreed. I try to buy non-stop or no plane change flights to the fullest extent possible. There are a lot that can go wrong during a layover.
agreed
The way each airline changes color on every graph is driving me insane. Pretty sure spirit stayed yellow but I promise there are more than 4 colors.
On your map, you show my state (Wisconsin) as being dominated by Southwest Airlines, but I'm not aware that SWA even has much of a presence here.
They may have a few flights into Madison or Milwaukee, I suppose, but most of the state (including Madison and Milwaukee) is dominated by either Delta or United ...
Larger cities are served by both, smaller are served by one of them.
The sole exception is Eau Claire, which is served by Sun Country. The company offers both local flights and bus service to their Minneapolis hub. Additionally, Groome transportation offers 19 trips a day between Eau Claire and MSP airport, so we end up having more airline choices than Milwaukee, Madison, or Green Bay...
Babe, wake up, a new Modern MBA video just dropped
Just want to point out that RASM is not revenue per seat per mile flown, it is revenue per seat-mile flown. You divide the revenue by the product of the number of seats on an aircraft and the number of miles the flight will travel.
We used to have well over 10 international, over seas airlines alone in the 1970s. In the late 2000s we had 7. In those eras, there were some that were even low cost such as ATA Airlines.
Now we have three. One is in such a bad state, there are constant mechanical failures seemingly every month.
So many great airlines are gone which I luckily got to fly on some before bankruptcy and mergers.
I don’t know what the future of the airline industry will be, but the past is looking better than our future.
...Agreed. There are times I still long for the pre-deregulation days. No extra fees, no penalties, only one fare increase per year, more direct flights (that may have made a stop or two enroute but you didn't have to change planes), much more room in coach, and far better cabin service. YEah the fares were relatively high but of you were a savvy traveller you could find discounts.
I routinely travelled "space available" which reduced the fare by between 33% - 50% and rarely had to wait for more than one extra flight as there was no overbooking. The one advantage back than was tickets were transferable between carriers as fares were standardised throughout the industry because based on miles flown rather than market popularity (so if three different airlines were serving the same route like Chicago to New York the fare on each was the same.
Deregulation looked good on paper but as it turned out in practise, it was a failure. ad the market became oversaturated which put more airlines in financial trouble making them ripe for acquisition by other larger carriers or leading to bankruptcy. I never would have dreamed there would be a day when airlines like Trans World, Eastern, "colorful" Branff, or Pan American were no more.
I watch these with my dad, thanks for posting. Waiting for the next in person documentary style video!
I’ve always observed this competition with JetBlue and delta at the major JetBlue hubs. In JKF JetBlue has T5 at JFK and delta has T4 but shared with klm, Latam, virgin, emirates, ethiad and more, at Boston JetBlue has Terminal C and Delta Terminal A. Even FLL delta has Terminal B and JetBlue Terminal 5. Right next door competing
“Unprecedented benefit” of free checked bags….I remember when that was the norm before they started charging for bags…
One or two checked bags at not cost is still the norm for many Asian and Middle Eastern airlines.
No mention of Allegiant? They're an ULCC and they focus a lot on cutting costs. They were posting very narrow loses recently. They are much smaller but seem to be a lot more profitable than the bigger ULC carriers especially during recessionary periods.
Allegiant is sort of a unicorn in the airline industry. They make their money by stimulating demand by flying to vacation destinations from mostly underserved communities, so they don’t have to worry about competing with other airlines on routes like other ULCCs like Spirit or Frontier.
Very true, also considering they're getting brand new 737 MAXs later this year and retiring their old A320s. They also are getting more routes, I'd like to see Allegiant climb towards the top above Spirit and Frontier.
I'm not sure the public will think getting 737 MAX planes is an upgrade.
@@bruceh4180 they're very safe planes, sure they've had issues but they are fine, people just get worked up over nothing.
Allegiant is an interesting case. They started as an arm of a travel agency and specialized in connecting tertiary airports to warm weather leisure destinations (e.g. nonstop flights from Minot, ND to Phoenix where they fly out of Mesa, not Sky Harbor) or opening "hubs" in places like Asheville, NC and Appleton, WI.
Oh, this explains a lot. Fortress airports and quotas. The funny thing is, the experience of flying on most of the legacy carriers is generally JUST like flying on Frontier or Spirit these days...tons of upselling, the price ends up being $100-$200 more than the sticker price, and the customer service sucks. The only reason I ever fly them is because sometimes they're the only way to get there.
Convincing people they can't have experiences at home, they must buy packages of experiences somewhere else, is the great change to me.
And now SouthWest announced (probably didn't make it in time for the video), that they're going to be offering assigned seating like the legacies.
Low cost carriers also game the US tax system by offering low fares and paying the larger tax on that; whilst fees are taxed at a lower rate, so they are able to keep more of that pie. That's why bag fees are still a thing.
I moved to an American Airlines hub and I’m shocked how much they suck. I nearly got crushed by a falling beam on their jetbridge recently and they didn’t even offer me customer service points. United and Delta offer me points whenever anything goes wrong.
'nearly got crushed' is not being crushed at all.
@@freewifi510 if it scared the literal 💩 out of you because of a close call I'm sure you would appreciate at least some points for the loss of your dignity and clothing.
The Airports own the jetways not the airlines. An airline may have exclusive use of a jetway, but upkeep/maintance is done by the airport.
@@sarahoutamonbuilds so airlines do put in their tech to maintain them.
@@rkevic Nope jetways are 100% airport responsibility. I suppose I can't speak for everywhere in the world, but certanly in NA.
Airlines *pay* the airport to use them, generaly per aircraft movement.
Take the following source from Ottawa.
yow.ca/en/node/4105
Would love to hear discussion of why TWA's early attempt at Tiered seat pricing failed whereas it worked later for other Legacy Carriers
Simple, timing. You can have the next best thing since sliced bread but if the market isn't ready for it and you have a bit of luck it can very well flop.
..United haf something similar in the late 1960s called "K" or Commuter class. on flights between Chicago, Denver, the West coast and Hawaii where passengers only received complimentary coffee and no meal service (though other beverages were available for purchase).
Before that they offered three levels of cabin service referred to as "Red White and Blue" on transcontinental jet flights. The "Red" cabin was their signature "Red Carpet" first class with sumptuous 6 course meals and the roomiest seats. The "White" cabin was what they referred to as their "One Class" service with 2 + 3 seating and four course meals. The "Blue" cabin behind the wings was their coach service which had 3 +3 seating, and basic meal service.
Really good video.
One nitpick, the Delta graphic shows LaGuardia as a Delta fortress. I'm pretty sure that was supposed to be JFK.
As a resident of Southwest Florida, I’m surprised Allegiant wasn’t included, as it is pretty impactful down here. They have several “fortresses” in Florida that are almost exclusively served by Allegiant, like Sanford, St Pete, and Punta Gorda. But without the hub and spoke model in place, is there even a benefit to controlling an airport like this? I know Allegiant operates slightly different than the budget airlines mentioned in this video, and it would be cool to see if it is struggling to adapt as well, or if it is doing better when competing with legacy airlines.
Having lived in Sarasota, I can say that all people from Naples are evil.
i feel like Southwest does pretty good against American here in Phoenix. Routes and pricing wise, from my experience atleast.
Definitely. They offer less seats and more seats on certain routes. But American still has more routes. Namely the East coast, more mexico destinations, and London.
A huge problem that carriers such as spirit, among a few others are having, is that the engines on certain A320 NEO aircraft are having serious issues that cost lots of money to fix. The down fall of low cost is not solely just because it is not viable anymore.
Hallelujah 🙌🏻!!!!! The daily jesus devotional has been a huge part of my transformation, God is good 🙌🏻🙌🏻. I was owing a loan of $49,000 to the bank for my son's brain surgery, Now I'm no longer in debt after I invested $11,000 and got my payout of $290,500 every month…God bless Ms Susan Jane Christy ❤️
Hello how do you make such monthly??
I'm a born Christian and sometimes I feel so down🤦🏼of myself because of low finance but I still believe in God🙏.
She's a licensed broker here in the states🇺🇸 finance advisor.
Thanks to my co-worker (Alex) who suggested Ms Susan Jane Christy
Can I also do it??? My life is facing lots of challenges lately.
I've always wanted to be involved for a long time but the volatility in the price has been very confusing to me. Although I have watched a lot of TH-cam videos about it but I still find it hard to understand.
Barely any mention of Alaska Airlines??? Delta may have a hub at SEA but it is and has always been Alaska’s territory. Alaska is also definitely a legacy airline as they’ve been around for decades, cover most of the West Coast if not all of it including Alaska and Hawaii, their flights aren’t exactly for the budget conscious, and like most other legacy airlines are big on their credit cards, loyalty programs, lounges, etc. For anyone living in the Cascadia region, I’d be willing to bet Alaska is the go-to airline especially considering their membership in the OneWorld alliance.
They have the best airline rewards program and credit card in the industry. Also, the only airline that allows (per distance of flight) lounge access just by buying a seat or a day pass. They also offer free checked bags (do it at the gate it's free)
I see you have summoned Wendover productions
Man I was so close to clicking off the video when he didn’t say we were talking about Alaska Airlines. I love Alaska
One of the most profitable legacy carriers in the country who consistently ranks in the top 3 airlines every year in the US, who also continues to grow when the other airlines downsize, and since ASA261 has ranked one of the most safest airlines to travel on due to the safety culture the airline adopted after the mistakes of 261.
Nope, they never get mentioned.
13:35. Southwest actually has far more legroom than Spirit, Frontier, or Allegian and more than basic economy on any legacy carrier. 32” on Southwest. Don’t lump them in with the ULCC’s.
The ending was lower budget than spirit.
strange that low cost doesnt work so well in USA when Ryanair does so well the other side of the atlantic
Ryanair CEO said they came to the U.S. to watch Southwest’s operations and then emulated their airport operations, particularly their fast turnaround model. Ryanair has different scheduling and pricing models but they have some commonality.
Perhaps it's because Europe is smaller and more densely populated than the US.
People are generally willing to pay more in the US because flights are longer and there’s fewer other options. For most people it’s either fly a few hours or drive a few days.
You listed a legacy airline as a new low cost carrier. It is more of a low cost carrier now as even AA is, but I don't think any airline started in the 1930s is considered anything but a Legacy Carrier.
AA & DL forced UA out of JFK? No. EWR was the CO’s NYC fortress hub. UA merges with CO, EWR becomes UA’s NYC fortress hub. UA never really had a strong presence at JFK to begin with so it makes sense for their business model to just pull out.
If I'm not mistaken, UA and DL basically swapped slots between EWR and JFK: UA took DLs slots at EWR, and DL took UA's slots at JFK.
EWR is a hub for UA and DL had a larger presence at JFK. Everyone is happy.
@@TC-cd5sm exactly.
@TC-cd5sm It was the original plan, then EWR became non slots-controlled airport. Delta end up obtaining 20+ JFK slots from UA through long term lease, and keeping flying EWR.
I've only really flown on Alaska... Seattle/Everett are the airports I fly from and Alaska dominates.
Actually, a number of discount airlines seem to deliberately position themselves at a hub, to protect themselves. A discount airline based itself at Colorado Springs, but United, with a hub in Denver, undercut the discount airline on flights from the Springs, but not their lucrative Denver flights. It got to the point that so many people were driving to Denver to catch a cheap United flight out of COS (only to be flown to United's hub in Denver for their connection), that United flew two flights from COS to DEN twenty minutes apart, one a jumbo jet, 18 minutes flying time.
The discount airline moved to Denver, where United couldn't discount all the competing flights without losing more profit.
Southwest started in hub cities Dallas and Houston, then Chicago and others. JetBlue started out of NYC, a metropolis that multiple majors had hubs in. Other discounts started out of Atlanta or Minneapolis. Only the ultra low cost airlines were from small rural city airports to Las Vegas or Florida.
Wait you're saying that ppl from Denver drove to Colorado Springs to take the cheaper flight that brought them back to Denver? Which is the low cost carrier in this story?
As someone who travels semi regularly, I will only fly Delta. You pay a bit more, but the service is great, the seats are pretty comfortable (I’m 6’2 so if it’s fine for me it should be for most others) you get free inflight entertainment (movies,tv,games,) and the lounges are great. Their Atlanta hub is huge, but it’s ran like a Swiss watch.
Delta executive compensation for 2023 was $84 million. "Not much fat to trim" is a f*cking LIE. Pay these jumped up secretaries a lot less, and maybe we could pay crews a living wage, and you could sit on an economy class seat without having to fold yourself in half.
As if 84 million would go a long way for all their employees. Congratulations on making an extra $500 !!!! Hopefully that solves all your problems 😂😂
@@todoldtrafford $84 million is not a 1-time payment made in a vacuum. It is annual. 10 years - $840 million, etc. So yes, on an annual basis, it would easily make a difference.
@@AmericaShrugged 500 dollar a year bonus congratulations 🎊!!!
Wow, the info. and analysis was impressive. (new to the channel) I work in the industry at a low level, and this analysis made the whole industry make so much more sense.
13:45 Alaska is NOT a point to point airline. Their hubs are Anchorage, Seattle, Portland, SFO, and LAX.
Now Honolulu, Hawaii
Man there is a lot that is just wrong in this video
I quit early too
Insane that the credit card system wasn't a huge part of this video.
Yet it's somehow better than most of the crap out there 💀💀💀
Your comment on LGA vs. JFK has a critical flaw. JFK has a direct connection to the subway, and LGA does not. The only way commutes to JFK can take "hours" is if the Customer is dumb enough to go there by road. Getting from Manhattan or Brooklyn to JFK on the A train or LIRR takes less than an hour even at rush hour.
LGA, on the other hand, is only accessible by road, and has no direct connection to the subway. The bus between LGA and the subway is constantly stuck in traffic. The last time I flew into LGA, the traffic was so congested that the bus ride to the subway took almost as long as my flight up from Tampa.
And yet, over and over, NIMBYs in Queens, or the State, or the MTA, or the Port Authority have nixed a direct connection to LGA. They may call LGA "New York City's Airport", but JFK and even Newark are more integrated into the City than LGA.
lol i live in NYC and frequently depart or arrive at JFK because of the subway/air train connections 🤣 this guy missed out on a lot of details that would be caught by somewhat seasoned travelers
I think he is referring to the 90's and early 2000's when the AirTrain did not exist. Airlines preferred LGA.
@@timhershel2940that makes sense, although flight options are very limited at LGA. other than the 2,400 km / 1,500 mile perimeter rule, the only flight options are domestically and to Canada. there is a much bigger and better world than traveling inside America
@@necrosilencehs I mean yeah JFK had been the international hub since the 60's. TWA & Pan Am mad massive hubs there. But LGA is still preferable for a very large amount people. JetBlue flies plenty of flights out of there as well now that's telling. Those slots are very highly sought after. Don't get me wrong I much personally prefer JFK too since I'm on Long Island.
This channel is why TH-cam was created. Great video once again.
You left off an important detail. NYC built the JetTrain to connect JFK to the Subway/MTA making it much easier to reach.
Meanwhile you can get to Newark from the Northeast Corridor.
A very good and comprehensive post about the in's and out's of the market and economy of airlines in America. 👍🏽
Hawaiian, Allegiant, Breeze, and Avelo - "I guess we don't exist".
Virgin America used to say this too, then Alaska ate them alive. Is that what you want from these?
Compared to Spirit, Frontier and Alaska, they are *TINY*....
@@Warriorcats64 Well Virgin America is dead while Hawaiian, Allegiant, Breeze, and Avelo are still kicking so....
@@airplanegodpending regulatory approval, Alaska bought Hawaiian.
Thank you for this video! Wow JAL’s business class is truly stunning! I hope I get to experience it one day. Please keep posting vids!
RIP Northwest Airlines. Eaten alive by Delta.
...yeah I miss them. They treated my old hometown of Milwaukee much better than Delta does today. ALso loved their Worldperks programme one of the best as they always seemed to have promos that gave bonus miles and it something ever went wrong, they compensated me very well for the trouble even if it wasn't their fault.
Better airline won
For most of the trips I take the “low cost” carriers are barely if at all cheaper and usually a lot more hassle. Once all the (usually hidden) fees are accounted for the difference is often minimal and in exchange I get a tiny seat, irritating fees, baggage limits, annoying boarding procedures, a mystery seat, and bigger chances of delays. What a deal…
Can you talk about doctors, especially plastic surgeons, neurologist, ophthalmologist, orthopedist, family docotrs, or hospital and private clinic business models in general?
As an very infrequent flyer, I love the predictability and flexibility of Amtrak I not only know what the fare will be before I look, I also know which tickets I can change without charge. Plus baggage limits are effectively non-existent.
The video title made me think I was going to dislike the airlines industry more than I do but I actually respect what these airlines do to increase profits under heavy regulation that restricts them from having more than 20% share of the entire market. The fortress hubs are a genius "small-scale" strategy for increasing gross margins in specific markets.
Very comprehensive analysis. Had to stick my head in to follow along.
Great work! 😊
You say Alaska is a budget airline and southwest was the first to offer free bags but Alaska has had free bags for as long as I can remember. In Alaska Delta is considered the cheap option trying to undercut Alaska Air lol.
21:10 JFK also had no midday departures. All flights left in the late afternoon/evening slots for Europe. That was the key opportunity the JetBlue founder saw. Pick up midday jfk slots for cheap
26:36 Yeah these credit cards & loyalty programs are MUCH bigger than the few seconds spent on them, I'd say. A follow up video where these developments are given the time they warrant would be interesting.
I think Wendover did a video on airlines, credit cards, and loyalty programs.
@@murdelabop Oh yeah I've watched that a good many times, I'd be curious what this guy has to say about them though.
@@murdelabop Yeah that's really interesting. United in particular sells a crazy amount of points.
Your opening demonstrates what a lot of people don’t understand, they THINK we have a free market system, we don’t. The government, who Fs up everything it touches, get involved to “regulate” things to keep it fair. If they just let the free market take care of itself, it would self correct.
You’re misleading people a little bit. While Delta does have a sizable presence in Boston, it’s not a fortress and it’s not a hub, it’s just a focus city. No one is delta captive in Boston unlike Atlanta. And JFK is not a delta fortress either
Delta is the largest operator in Boston and has a FA base there and is opening a pilot base there this year as well
@@Smg22345 Yep. It's Delta (Terminal A) and JetBlue (Terminal C) that dominate Logan. Delta turned Boston into a hub just before Covid. Delta technically has a "fortress" in Logan too. It has Terminal A all to itself and isn't connected to the rest of Logan post-security.
This video is full of little errors.
Boston is absolutely a Delta hub as Delta has even opened up a pilot base there and operates 9 international flights. JFK is also a significant, maybe not fortress, but significant hub of Delta’s since they operate over 30% of the traffic. No other carrier has that much share in JFK
Boston literally is a delta hub
12:12 CASM is Cost per Available Seat Mile (and Not Square Mile). Great informational episode bro. I truly appreciate the research and exquisite presentation.
holy fuck we need affordable high-speed cross country rail
Even intercity rail to fit into that sweet spot of too long to drive but too short to fly.
@@murdelabop It's not high speed but I make sure I never take for granted the fact that I live in an area of the east coast that has rail everywhere I need to go. (DC, NYC, Philly, and Boston)
With rail also feeding into airports, like Amsterdams Schipol Airport where there's a 20 track railroad station under baggage claim to every corner of the Netherlands
Billions for one route with no competition? No thanks.
@@starventure what are you talking about?
Just a suggestion: your thumbnail is amazing but New Jersey has two additional airports:
ACY which is ran by Spirit Airlines.
TTN which is ran by Frontier Airlines.
I just took my first trip on Southwest. My Delta flight was cancelled due to the Crowdstrike issue. What an awful airline! Planes were OK but not clean. It was the passenegers attracted to the “low fares “. Sixteen wheelchairs loaded up in Chicago. One was needed in Houston. Jetway Jesus cured them, apparently.
SWA announced they are going to assigned seating next year but I bet this doesn’t cure the “gimmee, gimmee” crowd.
An excellent research! Thank you for the video 🙂
I believe airlines are an Oligopoly by definition.
One big reason people switched back to the big 3 when the big 3 introduced their "basic" everything-costs-extra fares is that the big 3 have more flights to more places at more convenient times.
Sun Country would be an interesting company to consider in the future, given their ULCC hub/spoke model out of Minneapolis, a Delta fortress hub. Essentially it seems to be the antithesis to this video.
I hate to be controversial, but I'm calling it: this video is BETTER than something Wendover Productions might do, and this topic is exactly up their alley. Ratio me but I'm not backing down! Subscribed!
You mentioned that US legacy carriers have a near monopoly on international travel to Asia and Europe. Is that accurate? Must be 50 or so very good airlines flying from USA to Asia. I have noticed that some of the foreign international carriers tend to have better service and lower load factors. Curious if you have thoughts on how they do that? Subsidies from countries of foreign carriers, lower costs, better business models?
There was no charge for bags 20 years ago. F
JetBlue started that. Also, Alaska is a legacy carrier and the fifth largest in the U.S. Why were they all but ignored?
I miss Pam Am 😢 good days
I don't miss the prices! And Juan Trippe was one of the biggest A-holes in corporate history!
New to the channel but very informative! It would be cool to see a video conparing the the same thing but with the railroad passenger service when private companies provided such services.
your graph at 3:05 doesnt make any sense. you just said a moment before that fuel was the most expensive cost, followed by labor. then you show a bar graph which says the exact opposite.
Fuel is the most expensive direct operating costs, the graph referred to total operating costs which includes labor costs that count as indirect like corporate and operations employees that cannot be allocated directly to each flight.
Update. Spirit went bankrupt today.
Perhaps is my PNW bias, but I really oppose you lumping Alaska Airlines in with the low cost carriers whether explicitly or implicitly by putting them on the charts. They are a smaller market share yes, but they do not operate as a low cost carrier, simply as a lower volume version so the mainline carriers with some niche flying within the state of Alaska.