Moderators: richierich, ua900, PanAm_DC10, hOMSaR
TheLion wrote:A weak strategy, ignoring the emerging market opportunities of tomorrow for short-sighted maximum profitability today. BA are slowly but surely driving themselves into a hole doing the same. A one trick pony cannot dance the tango when it has only learned to line dance.
TheLion wrote:A weak strategy, ignoring the emerging market opportunities of tomorrow for short-sighted maximum profitability today. BA are slowly but surely driving themselves into a hole doing the same. A one trick pony cannot dance the tango when it has only learned to line dance.
DfwRevolution wrote:TheLion wrote:A weak strategy, ignoring the emerging market opportunities of tomorrow for short-sighted maximum profitability today. BA are slowly but surely driving themselves into a hole doing the same. A one trick pony cannot dance the tango when it has only learned to line dance.
Maximizing profits in the short-run also maximizes profits in the long-run. That's basic math. See: discounted cash flows.
DfwRevolution wrote:TheLion wrote:A weak strategy, ignoring the emerging market opportunities of tomorrow for short-sighted maximum profitability today. BA are slowly but surely driving themselves into a hole doing the same. A one trick pony cannot dance the tango when it has only learned to line dance.
Maximizing profits in the short-run also maximizes profits in the long-run. That's basic math. See: discounted cash flows.
Cubsrule wrote:DfwRevolution wrote:TheLion wrote:A weak strategy, ignoring the emerging market opportunities of tomorrow for short-sighted maximum profitability today. BA are slowly but surely driving themselves into a hole doing the same. A one trick pony cannot dance the tango when it has only learned to line dance.
Maximizing profits in the short-run also maximizes profits in the long-run. That's basic math. See: discounted cash flows.
Not necessarily true. If I forgo $1,000,000 next year to make $1,000 this year I come out behind even with discounting. It depends on the magnitude of the profits.
downdata wrote:DfwRevolution wrote:TheLion wrote:A weak strategy, ignoring the emerging market opportunities of tomorrow for short-sighted maximum profitability today. BA are slowly but surely driving themselves into a hole doing the same. A one trick pony cannot dance the tango when it has only learned to line dance.
Maximizing profits in the short-run also maximizes profits in the long-run. That's basic math. See: discounted cash flows.
Ignores first mover adavantage and other intangible values.
downdata wrote:Remember kodak? They sure maximised short run cash flows... except the business wasnt a going concern without investing into the future.
BlatantEcho wrote:But when fares are $700 R/T to china right now
LAX772LR wrote:BlatantEcho wrote:But when fares are $700 R/T to china right now
...on a high fare day.
Some days, secondary China-LAX is selling for just over $400, roundtrip, all in.
And not just on secondary carriers either; I've routinely seen sub-$500 fares on CA/MU as well.
timpdx wrote:LAX772LR wrote:BlatantEcho wrote:But when fares are $700 R/T to china right now
...on a high fare day.
Some days, secondary China-LAX is selling for just over $400, roundtrip, all in.
And not just on secondary carriers either; I've routinely seen sub-$500 fares on CA/MU as well.
Right. Went to Vietnam on CA in May. The only reason my fare wasn't sub$600 was that I wanted to stopover and check out Beijing. That cost me a whopping 60 bucks or something...a mild "meet friends for drinks" price. Heck, it was so dirt cheap I sprung for PE, too. I was flying ex-LAX, and found my friend a fare ex-YYZ an even cheaper $550 fare. How on earth does a sane airline meet or beat that? Much less the same fares for an interior market. Hey, happy to take advantage, but sheesh, it's just not sustainable.
LAXintl wrote:The company says route did not mature with forecast corporate traffic and its overall performance was not meeting expectations.
B737900ER wrote:XIY was bound to fail. It’s a tourist destination first, business second. The real money is in CKG.
Cubsrule wrote:DfwRevolution wrote:TheLion wrote:A weak strategy, ignoring the emerging market opportunities of tomorrow for short-sighted maximum profitability today. BA are slowly but surely driving themselves into a hole doing the same. A one trick pony cannot dance the tango when it has only learned to line dance.
Maximizing profits in the short-run also maximizes profits in the long-run. That's basic math. See: discounted cash flows.
Not necessarily true. If I forgo $1,000,000 next year to make $1,000 this year I come out behind even with discounting. It depends on the magnitude of the profits.
IPFreely wrote:Cubsrule wrote:DfwRevolution wrote:
Maximizing profits in the short-run also maximizes profits in the long-run. That's basic math. See: discounted cash flows.
Not necessarily true. If I forgo $1,000,000 next year to make $1,000 this year I come out behind even with discounting. It depends on the magnitude of the profits.
This assumes that making $1,000 this year stops you from making $1,000,000 next year. That is a bad assumption. United moving an airplane away from an unprofitable Xian route to a profitable route this year does not mean the airplane cannot be put back on the Xian route next year, or sometime in the future, when it might be profitable.
jhsusman wrote:Frees up a 787-8 for the new Denver - London route. Not sure how many days a week that UA was offering the X’ian flights. . .
Cubsrule wrote:Maybe. But in the context of this discussion, it’s probably true that lack of continuity costs UA money. So it’s probably more like $1,000 this year and $800,000 next year or $1,000,000 next year.
flyfresno wrote:Really sad as it’s nice from a tourist POV to have multiple routes into interior China that bypass the big coastal hubs. CTU is still happening, but I was really hoping this would survive too.
Flighty wrote:We (observers) forecasted that these secondary Chinese cities would become major business destinations.
In fact (at least when I visited china 3 yrs ago) business ties lag well behind forecasts. The chinese business environment is in turmoil. There is still limited rule of law. Capital controls are rife. China is not developing as people expected, and probably is not developing as fast as certain statistics say. A lot of Chinese business is offshoring away from China, for legal reasons. Many prominent figures sent their family out of China, and in fact, they do not live there. Chinese business is often conducted elsewhere - Switzerland, California, Australia, Dubai, London, Paris, NYC. That is where the principals are located. Just my feeling about the discrepancy between Chinese growth and the lack of activity on the ground.
zakuivcustom wrote:flyfresno wrote:Really sad as it’s nice from a tourist POV to have multiple routes into interior China that bypass the big coastal hubs. CTU is still happening, but I was really hoping this would survive too.
I guess the problem is, for most American tourists going on a China trip, it's highly likely that Xi'an would not be the only stop on the itinerary. Most people may as well stop in PEK (or Shanghai) for a day or two, before moving into the interior.
IPFreely wrote:Cubsrule wrote:Maybe. But in the context of this discussion, it’s probably true that lack of continuity costs UA money. So it’s probably more like $1,000 this year and $800,000 next year or $1,000,000 next year.
No maybe about it. United does not have to fly unprofitable flights to Xian now to keep the right to fly them in the future. They can go back to Xian anytime it becomes profitable to do so, if that ever happens.
Cubsrule wrote:IPFreely wrote:Cubsrule wrote:Maybe. But in the context of this discussion, it’s probably true that lack of continuity costs UA money. So it’s probably more like $1,000 this year and $800,000 next year or $1,000,000 next year.
No maybe about it. United does not have to fly unprofitable flights to Xian now to keep the right to fly them in the future. They can go back to Xian anytime it becomes profitable to do so, if that ever happens.
I wasn’t thinking about traffic rights but rather about the value of maintaining a presence in the market. If I’m a FF on XIY-US, it’s hard for UA to capture my business if they are in and out of XIY. I don’t know if the monetary value of continuity is quantifiable but I don’t think there’s any question that it is positive.
tphuang wrote:It's been hard to sell premium cabin since Chinese gov't started the anti corruption campaign. Oversea business trips that used to pay business now have to travel economy. Hard to make profit when economy is going for $500 R/T. It's like that for most of asia now.
Surprised Xi'an lasted this long. If you ever been there, you'd know why.
xjetflyer2001 wrote:tphuang wrote:It's been hard to sell premium cabin since Chinese gov't started the anti corruption campaign. Oversea business trips that used to pay business now have to travel economy. Hard to make profit when economy is going for $500 R/T. It's like that for most of asia now.
Surprised Xi'an lasted this long. If you ever been there, you'd know why.
Why if someone has been to Xi'an would they be surprised the flight lasted this long?
I don't quite understand your comment
I've been to Xi'an and absolutely loved it, one of my favorite cities in China and I've been to quite a few.
I didn't think the flight would last just because I periodically checked the loads as I wanted to take the flight, just never had the time, but they were never very good. I would think that's more to do with the fact that Xi'an isn't a well known city in the United States for one, but as others have said, for people who have heard of it, it's more tourist travel than business travel
Cubsrule wrote:I wasn’t thinking about traffic rights but rather about the value of maintaining a presence in the market. If I’m a FF on XIY-US, it’s hard for UA to capture my business if they are in and out of XIY. I don’t know if the monetary value of continuity is quantifiable but I don’t think there’s any question that it is positive.
Nicoeddf wrote:B737900ER wrote:XIY was bound to fail. It’s a tourist destination first, business second. The real money is in CKG.
There you see: Only stupid people at UA. Should have just asked you.
jhsusman wrote:Frees up a 787-8 for the new Denver - London route. Not sure how many days a week that UA was offering the X’ian flights. . .
flyfresno wrote:xjetflyer2001 wrote:tphuang wrote:It's been hard to sell premium cabin since Chinese gov't started the anti corruption campaign. Oversea business trips that used to pay business now have to travel economy. Hard to make profit when economy is going for $500 R/T. It's like that for most of asia now.
Surprised Xi'an lasted this long. If you ever been there, you'd know why.
Why if someone has been to Xi'an would they be surprised the flight lasted this long?
I don't quite understand your comment
I've been to Xi'an and absolutely loved it, one of my favorite cities in China and I've been to quite a few.
I didn't think the flight would last just because I periodically checked the loads as I wanted to take the flight, just never had the time, but they were never very good. I would think that's more to do with the fact that Xi'an isn't a well known city in the United States for one, but as others have said, for people who have heard of it, it's more tourist travel than business travel
Agreed: Xi’an has some great features: wonderful food from the West Chinese / Muslim quarter that is very hard to find anywhere east of Xi’an, beautiful city walls that are much less touristy than in other cities, and of course the Terra Cotta Warriors and surrounding toombs and temples. Also, you have to pass through / connect in Xi’an to get to many interesting places in the western half of the country. It’s really a great tourist hub. Just not exactly, it appears, the best business market.
IPFreely wrote:Cubsrule wrote:I wasn’t thinking about traffic rights but rather about the value of maintaining a presence in the market. If I’m a FF on XIY-US, it’s hard for UA to capture my business if they are in and out of XIY. I don’t know if the monetary value of continuity is quantifiable but I don’t think there’s any question that it is positive.
If someone is flying XIY-US and UA is the only non-stop option, UA is going to capture that business. No passenger is going to care that UA exited that route then returned one or two or five years ago.
Cubsrule wrote:IPFreely wrote:Cubsrule wrote:I wasn’t thinking about traffic rights but rather about the value of maintaining a presence in the market. If I’m a FF on XIY-US, it’s hard for UA to capture my business if they are in and out of XIY. I don’t know if the monetary value of continuity is quantifiable but I don’t think there’s any question that it is positive.
If someone is flying XIY-US and UA is the only non-stop option, UA is going to capture that business. No passenger is going to care that UA exited that route then returned one or two or five years ago.
Why? Is XIY-SFO-LAX so obviously superior to, for instance, XIY-ICN-LAX that UA will get all of the non-SFO US business?
Cubsrule wrote:Why? Is XIY-SFO-LAX so obviously superior to, for instance, XIY-ICN-LAX that UA will get all of the non-SFO US business?