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Republic Airways CEO on Rising Ticket Prices, Fees

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    Former BB&T CEO John Allison on the Federal Reserve’s handling of the economy.

  • Duration 3:55
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Airline stocks are soaring but the industry a little bit of turbulence carriers shaking things up and look at consolidation and merger -- survived.

That will ultimately mean fewer airlines fewer seats higher prices.

But leaner operations boosted company profits.

And that idea applies of my next guest Republic Airways CEO Brian Bedford with.

And what are we looking at the at all I -- as I hear the industry bemoaning its troubles.

Those planes -- crowd -- all crowd.

-- -- -- the industry moved from a a business that was focused on maintaining market share or gaining market share at the expense of others to.

Companies that are actually financially disciplined today that are actually seeking to return.

And some you know adequate return on invested capital that's different and and I think it's leading to different behavior.

Specially on capacity.

We're seeing much more rational capacity management today than.

We have in the past decade -- was signaling that irrational fees I'm not you know targeting you I'm just saying it just seems to be an industry rife with all of -- -- well but we're given customers' choice too I mean there're there are some participants in the industry the charge fees on everything I think it's extraordinary.

Probably too far -- -- -- listed some months and industrial make a lot of money charging for trials either.

We're charging extra for the blanket charge -- -- go to the bathroom you know it's called on bundling.

That's allowing people to pay for things that they think have value and elect not to pay for things so.

Rather than like sitting down like Fiat currency not -- back up.

I don't know like deciding whether or not at once it has more valued than another.

Don't don't care about the middle seat then don't -- And then get -- -- -- -- together so we're gonna still see more of that.

I don't I don't know what's left actually that can be attacked again I think that's another very criticized some carries may have gone a bit too far but actually think the pendulum so should sifting the other way.

If you look at where the legacy airlines are going they're actually very product focused.

And I think you know more savvy than people give them credit for their becoming more brand focused and then more loyalty focused and especially for guys like -- -- Don't mind paying up for high yield on convenience and well I'm I'm happy to pay for something when the prices what you say -- it's not the united when all of a sudden people -- -- you said this is going to be I don't know what 99 dollar fair.

Turns -- that didn't include.

Flying during the day part of the statement on Monday to -- zero disappointed that there it -- to the fees I was it's not that night and it's an ounce and why do but in the case of frontier we you know we we we have -- on bundled product that is the lowest actually very clear you view and a little bundled product so you get to do we give people choice it's that -- You view you can make an intelligent this choice based on -- your needs but never got I -- keeps throwing these new demands onion and then their fees for the Palestinians and -- and then it gets worse right.

Well what's disturbing about the latest moves it's down on under the guise of transparency making sure that customers are fully informed well.

Of course -- informed before they they actually part with their money.

This becomes a way to a bundle part of through taxes and sort of sweep it under the rug or they -- -- taxes are invisible now so.

-- may be more transparent in the eyes of the Department of Transportation I think it's less transparent for for customers spot.

That's that's what we're just real quickly the economy rising tide whistle airplanes may back -- but.

We've seen load factors are pretty darn -- we just announced load factors set for January up five points.

But it's also done on -- unless capacity in the market I mean so is -- take -- plane seats down from wells there's not artificial is that real.

Well it's real in the sense that it is is input costs go up fuel.

40% of our our input cost.

Has to be paid for it and is as we go the price curve obviously that means there's potentially.

Less demand so we take the supply way its basic economics.

And -- just fine thank you very much casinos pleasure being here same here thanks again in any data to.

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