Originally Posted by Trae
Continental has won countless awards in the past three years. They are a great airline.
Originally Posted by misterno
we do not want award winning airlines
we need cheap and reliable airlines
Who cares about awards for services if only the upper middle class and above can afford.
Well, why can't both airlines co-exist and compete? Seems to me that each airline is targeting different customers.
Continental and AeroMexico compete for the Fortune 500 crowd and the upper-middle class & middle class that can plan ahead and they charge higher fares, but in return their customers get better, more comfortable terminals, with jet loading bridges, automated baggage handling, a frequent flyer program, elite lounges, potential upgrades to first class, more frequent schedules at convenient times, the opportunity for numerous connections at the legacy's hub(s) etc. And a part of everyone's
fare helps to pay for all those extra little perks, regardless of whether they fly (or spend) enough to be upgraded to first class, earn award trips, or maintain membership at the elite club.
Right now, Viva Aerobus competes for the more price-concious folks or folks who can't plan ahead and gives a cheaper fare in exchange for a bare-bones terminal with ramp boarding, a low-tech baggage delivery that may take longer (and one you have to pay extra for), no frequent flyer programs, no award trips, no first class, less frequent schedules at possibly inconvenient times, no elite clubs, etc.
And if you read Viva Aerobus FAQ on their website, they don't even allow you to make a connection to another Viva AeroBus flight in Monterrey. Try and make a reservation from Qeretaro to Juarez, or Morelia to Guadalajara. You can't. They are strictly a point to point carrier from Monterrey to 22 destinations and back to Monterrey.
It's not too much of an issue for AUS because Viva AeroBus would have nonstop service to six destinations - not just Monterrey, like most of the other Viva AeroBus cities in Mexico do now.
Of course, that could change at some point in the future as they expand their network. If you think about it, Southwest didn't offer connections for about 5 or 6 years. The first 4 years they only flew between Houston, San Antonio, and Dallas so there was nowhere to connect to
. Harlingen was added in 1975 and even then, I don't think Southwest offered connecting service just nonstop and one-stop point to point service between the four cities.
I don't think they started offering connecting service until about 1977 when they added Lubbock, Midland-Odessa, El Paso, Corpus Christi and Austin into their network.
Southwest operated fewer overall routes in their first several growth years, but the ones they did operate they operated at a greater frequency.
Viva AeroBus if the opposite. They offer lots of destinations, but with little frequency in each market. - usually 1 or 2 daily flights, sometimes less.
If the marketplace is supposed to be about choices, then let passengers choose. Right now, we only have the legacy choice. Viva Aerobus would give Central Texans and our potential visitors from Mexico another choice with regards to price.
have to the potential to increase tourism, and convention center business in Central Texas by attracting a diverse
mix of visitors. More visitors would help fill all those hotel rooms we've recently built or have planned for contructions. More hotel guests in the downtown area would also help support the Second St. District and other retail in the downtown core and as-yet un-opened ground floor retail planned in a lot of the residential towers, and they wouldn't necessarily have that big of an impact on the traffic issue.
Here's something else to think about.
The basic idea of their business plan is explained in their CEO Mike Szuc's resume, submitted as part of the application to the US DOT back in August, 2007.
scroll down to page 39 of the pdf document.)
Viva Aerobus commenced commercial operations on 30th November, 2006. Viva Aerobus is a low cost carrier with the purpose of providing air travel to all of the people of Mexico. The airline is based in Monterrey and currently flies five 737-300 aircraft to 22 destinations. in Mexico. The fleet will expand to 10 by the end of 2007, and then a further 10 in each of 2008 and 2009.
In 2006, only 4% of the Mexican population was able to fly due to the high prices on offer from the then existing carriers. Viva Aerobus has been able to stimulate huge volumes of new traffic by lowering prices dramtically. In the first six months of operation, Viva AeroBus flew at a load factor of 75% confirming that there is huge demand in Mexico for real low cost carriers.
Also from their application:
The company is approximately 75% owned by a subsidiary of the Mexcian bus transportation company, Inversionistas en Autotranportes Mexicanos SA de CV ("IAMSA") and approximately 25% owned by the Ryan Mex Group. As the biggest passenger bus transportation operator in Mexico, IAMS serves 20 of the 31 Mexican states, transporting 260 million passengers annually, with 9000 buses and 389 stations
So this bus company obviously thinks they can fly people as cheaply as the they could transport them by bus. I'm not sure what amount of the 260 million is trans-border traffic, but the bottom line (as Jim Smith likes to say to the City Council) if their plan works, it would have to potential to greatly increase AUS's international passenger number.
Will their plan work? Who knows. They're applying for a foreign carrier permit, which would also allow them to transport freight and mail. Would the extra revenue from that, help offset lower revenues from rock-bottom fares? Some of their costs (like fuel) are fixed, but could they save enough in other areas to offset that?
And if Viva AeroBus (or any other foreign
ultra-low-cost carrier) fail to become profitable and file for bankruptcy, Austin's not at risk, and it's not like the US Government is going have to bail them out. So they might as well try.