Disney and the airlines

[copcarguyp71]

I have often pondered why Disney has not aligned themselves with an airline or several airlines to perhaps offer complete packages with some sort of discount. Even though you can choose airfare on the planning site it really just gives you the same options you could get from an other airline booking site. If they had enough volume I am sure they could arrange a slight discount with a couple of airlines in return for getting flights to MCO more packed.

I came up with two possible reasons...

A - They are already booked enough and do not feel like they need to make the visits more affordable

B - They are afraid of choosing one airline only to have the rest of them be sour about the situation

With DVC obviously being such a huge part of their corporate manifest destiny I would think that having an airline (not of their own) where you could enjoy even a slight discount would be a selling feature. Perhaps the DVC memberships are selling well enough that they do not have to worry but I know for our part airfare is a large consideration in our calculations of value for our money in a vacation.

I am just curious if anyone has ever thought about this and if it would make you more likely to take more frequent trips to the world if there was a program in place. I know for our friends across the pond it is a huge expense.

 

[John]

I have often pondered why Disney has not aligned themselves with an airline or several airlines to perhaps offer complete packages with some sort of discount. Even though you can choose airfare on the planning site it really just gives you the same options you could get from an other airline booking site. If they had enough volume I am sure they could arrange a slight discount with a couple of airlines in return for getting flights to MCO more packed.

I came up with two possible reasons...

A - They are already booked enough and do not feel like they need to make the visits more affordable

B - They are afraid of choosing one airline only to have the rest of them be sour about the situation

With DVC obviously being such a huge part of their corporate manifest destiny I would think that having an airline (not of their own) where you could enjoy even a slight discount would be a selling feature. Perhaps the DVC memberships are selling well enough that they do not have to worry but I know for our part airfare is a large consideration in our calculations of value for our money in a vacation.

I am just curious if anyone has ever thought about this and if it would make you more likely to take more frequent trips to the world if there was a program in place. I know for our friends across the pond it is a huge expense.

Although your second point is very valid, the problem with this is the airlines price thier flights as cheaply as possible. They run a very thin margin. Not much room for a discount.Also thier price points depend on the very violent fluxuations of fuel cost. Most of us book 6 months or more in advance of our departure, most times flights are not released that far in advance ( I know atleast for Southwest this is true). It would be very difficult for the airlines to know what thier cost would be that far in advance. Someone else may have more info, but these are my intial observations.

 

[copcarguyp71]

Although your second point is very valid, the problem with this is the airlines price thier flights as cheaply as possible. They run a very thin margin. Not much room for a discount.Also thier price points depend on the very violent fluxuations of fuel cost. Most of us book 6 months or more in advance of our departure, most times flights are not released that far in advance ( I know atleast for Southwest this is true). It would be very difficult for the airlines to know what thier cost would be that far in advance. Someone else may have more info, but these are my intial observations.

Yes, I had thought about their margins and I know they run pretty close to the bone but I wonder if there is any way to think outside the box with that. For example (and I HAVE NOT researched this) If TDO were to negotiate some sort of deal with MCO for either reduced gate fees OR possibly cover/chip in for the gate fees for the airline to help offset the airline operating expenses. I am sure there are other ways to help out in the interest of locking guests into a Disney vacation. Even if they did this for the next 5-years it would go a long way towards endearing people to Disney and away from those "other" parks.

 

[lazyboy97o]

I don't know the specifics of how they worked, but Disney has had relationships with airlines in the past. United Airlines was a sponsor at Disneyland. Eastern Airlines and then Delta Airlines were the official Walt Disney World airline for a time, including an attraction in Tomorrowland. There was also a relationship with Alaska Airlines in which a plane or two was painted for The Happiest Homecoming on Earth.

 

[Cmdr_Crimson]

Well, They do have quite a few planes decked with Disney..But, I doubt their own airline would get them off the ground..
One's I think are the coolest are the Japanese Airlines JAL...Look at these bad boys!

I Did see this one Fly out of Chicago a few years ago..Coolest thing in the Friggin sky!

 

[dreamfinder]

Why? Most families that would want a discount, would already be looking at a low cost carrier, most of whom have ridiculously thin margins. Southwest et al would rather (or so it seems at least) sell packages through their travel agent branch and actually make more money that way. Disney doesn't seem to like essentially paying other people when it's not needed. In the past the times they have had an official partner, I believe that the partner has to kick in cash, pay for ads, or some other sort of payment for the ability to be "The Official WDW/DLR Airline". And the way that airlines are dropping like flies and running huge deficits, not likely to happen.

As far as endearing people to Disney, I can't see that many people being convinced to stay on property only because of a $20 discount on their plane ticket. Especially when you are already dropping several k, a small savings on plane tickets won't do that much for goodwill. And what about the people that drive, take the train, whatever? It's simply much easier for Disney to offer discounts on their own services that everyone can take advantage of.

 

[Phonedave]

Part of it may also be availability of flights.

Most of the time I fly out of Newark NJ. United has the lions share of the EWR-MCO routes with JetBlue having a decent amount of their own. Most other carriers are not so lucky. So for me if an airline like Delta was the offical carrier, there would have to be quite a large price difference for me to want to fly out of LGA (where Delta has routes)

-dave

 

[powlessfamily4]

The only way this would be feasible is if TDO took on the airlines as chartered aircrafts designated specifically for WDW. This is similar to what Funjet and Vacation Express does with the vacation packages to Mexico through AreoMexico. This would not work well when so many people coming from so many destination. It would have to be a pickup flight or you would basically need to saturate an area with a great vacation package and hope enough people signed up to fill the plane. I worked for the airlines for years and half full planes don't get it anymore. They will cancel a flight and combine two into one in a heartbeat.

 

[tare]

I'm mad that they don't do sun country!!! You can book sun country through them but when leaving you have to still take care of your own luggage. Sun country is a major airline!!!

 

[flynnibus]

I am just curious if anyone has ever thought about this and if it would make you more likely to take more frequent trips to the world if there was a program in place. I know for our friends across the pond it is a huge expense.

airlines are already a cuthroat business. Disney aligns with participating partners through it's Magical Express program.

Any sort of discounting organized by Disney would likely be less flexible than the demand based discounting airlines already do.

 

[dreamfinder]

I'm mad that they don't do sun country!!! You can book sun country through them but when leaving you have to still take care of your own luggage. Sun country is a major airline!!!

Fairly sure it's not a problem on the WDW side, but rather an issue on the airlines side. Southwest does gobs of business to MCO, and they weren't participating in the resort luggage check until a year or so ago.

 

[thomas998]

Although your second point is very valid, the problem with this is the airlines price thier flights as cheaply as possible. They run a very thin margin. Not much room for a discount.Also thier price points depend on the very violent fluxuations of fuel cost. Most of us book 6 months or more in advance of our departure, most times flights are not released that far in advance ( I know atleast for Southwest this is true). It would be very difficult for the airlines to know what thier cost would be that far in advance. Someone else may have more info, but these are my intial observations.

I can't agree with part of you post on airlines not knowing the cost of their flights. I would say airlines know exactly what the costs will be and can be certain of that cost years in advance if they want to. The fuel argument is a smoke screen the airlines like to throw out every once in a while, but the reality is airline can and do hedge their fuel (buy it far in advance at a set price), if they see volatility in a 6 month or 12 month window because of fuel prices it is because the airline made a bet that fuel would be cheaper in the future and decided not to hedge(buy in advance) their fuel.

 

[John]

I can't agree with part of you post on airlines not knowing the cost of their flights. I would say airlines know exactly what the costs will be and can be certain of that cost years in advance if they want to. The fuel argument is a smoke screen the airlines like to throw out every once in a while, but the reality is airline can and do hedge their fuel (buy it far in advance at a set price), if they see volatility in a 6 month or 12 month window because of fuel prices it is because the airline made a bet that fuel would be cheaper in the future and decided not to hedge(buy in advance) their fuel.

I dont disagree with this, but same as gas station who has already got the gas in the ground.....a crisis comes up and the next day the gas goes up. The gas in the ground they have already paid for. Its a sham....I get it. But dosnt mean it dosnt happen. I dont work in the airline industy and never did. I was taking a somewhat uneducated guess.
Thats why I mentioned that someone else would have more information.

If thier cost were "fixed" that long in advance...why dont they release thier flights sooner?

 

[flynnibus]

I dont disagree with this, but same as gas station who has already got the gas in the ground.....a crisis comes up and the next day the gas goes up. The gas in the ground they have already paid for. Its a sham....I get it

While the gas in the ground is already paid for - they don't know what their costs will be tomorrow necessarily to pay for gas. So they charge based not on what the product you bought today cost - but based on what they think they will need to run their business going forward. The business doesn't start and stop one day at a time - their costs and revenues are over a continuum. Prices change today to pay for what they may have to pay later.

They don't take a cut of the price after it's sold.. they have to buy the gas up front. So you gotta pay for it so they can buy tomorrow's gas. The uncertainty of future prices is what drives prices today, up. Just like it does on the commodity markets. It's not about what today's crop cost, but where people think prices will be going.

Airlines have pretty good views on their costs - if they are hedging fuel - but what they don't always know is how many customers they will have. That's why pricing changes - in part to help fill the plane... in part to get closer to 'full' price when demand is near capacity. They change prices based on how full the plane is. And charge less for earlier bookings to encourage early bookings to give them a better picture of actual booked capacity. So they can know if they need to make changes to ensure planes fly at their efficient capacities.

 

[John]

Makes sense to me, the question I asked was more rhetorical toward the poster in question. I understand the supply vs demand aspect of the airlines. Never thought of the price structure the way you explained it and it absolutely makes perfect sense. But dosnt that still make the fuel cost uncertian? You can only hedge so much.

 

[flynnibus]

But dosnt that still make the fuel cost uncertian? You can only hedge so much.

Yes, but it makes it more predictable over a time period. It gives them a predictable cost over the near-term future. They just keep multiple contracts going at different intervals to ensure they have some sort of predictability.. then they can set prices with some sense of their actual costs.

 

[wilkeliza]

I feel like there are airlines that do this. Jetblue offers a getaway package to Disney World and Disneyland and it seems the prices are discounted in some fashions.

 

[GoofGoof]

Makes sense to me, the question I asked was more rhetorical toward the poster in question. I understand the supply vs demand aspect of the airlines. Never thought of the price structure the way you explained it and it absolutely makes perfect sense. But dosnt that still make the fuel cost uncertian? You can only hedge so much.

Hedging is also capital intensive. If you enter into futures on an exchange like NYMEX or ICE you will be subject to daily margin calls if your positions go out of the money. With Dodd Frank on the horizon the cost will be going up. You also have the volumetric uncertainty around how much fuel you will need based on how much weight you carry. If you are over hedged that can cost you too.

To the original post, since airlines still tend to be regional or airport specific it would be hard to pick just 1. US Air is the dominant airline in Philly but has limited flights from the Mid West for example.

 

[dreamfinder]

Makes sense to me, the question I asked was more rhetorical toward the poster in question. I understand the supply vs demand aspect of the airlines. Never thought of the price structure the way you explained it and it absolutely makes perfect sense. But dosnt that still make the fuel cost uncertian? You can only hedge so much.

Yes, but it makes it more predictable over a time period. It gives them a predictable cost over the near-term future. They just keep multiple contracts going at different intervals to ensure they have some sort of predictability.. then they can set prices with some sense of their actual costs.

A few years ago when gas started to rise through the roof, Southwest took the country by storm. They had made a very smart hedge bet, and were able to keep their prices very low. Most of their competitors had to raise their prices as they hadn't hedged in the same fashion. But then when the Southwest hedges expired, their prices started to creep up. Look at today's rates. They are still almost always cheaper, but now by like 5-15% instead of 30-40% (or something similar). Since they hedge for months or years, airlines do have a reasonable idea of what their prices will be in 6 months. However, they need to stay flexible as they may not know what they will be in a year. They would normally rather raise the price gradually over a period of time, instead of doubling overnight to meet the new prices.

I feel like there are airlines that do this. Jetblue offers a getaway package to Disney World and Disneyland and it seems the prices are discounted in some fashions.

I would wager that the "discount" is JetBlue simply eating a portion of the flight cost, which they are then offsetting by the funds they earn from Disney by acting in a travel agent capacity. So make the flight $10 cheaper, but then make $25 in the TA commission. They end up coming out $5 ahead instead of you buying just the ticket from them, and then buying the rest of the package direct from Disney.

 

[Phonedave]

The only way this would be feasible is if TDO took on the airlines as chartered aircrafts designated specifically for WDW. This is similar to what Funjet and Vacation Express does with the vacation packages to Mexico through AreoMexico. This would not work well when so many people coming from so many destination. It would have to be a pickup flight or you would basically need to saturate an area with a great vacation package and hope enough people signed up to fill the plane. I worked for the airlines for years and half full planes don't get it anymore. They will cancel a flight and combine two into one in a heartbeat.

Hooters Air tried to do the same thing (well not to WDW) - charter flights only. It didn't work for them. I remember seeing one of the Hooters Air planes on the tarmac at EWR all the time. The thing rarely moved.


-dave