i think it's a clever idea. the biggest benefit (if it's spun correctly) may be the publicity generated from being a first mover with a unique idea. i can see the national media latching on to this.
i think it is important to keep the advertisers at a certain class---which is what appears to have happened so far (benz, b of a, history channel). advertising low prices at wal mart might be irritating. the samples shown at skymediabiz dot com are tasteful.
btw--$3 Million is a lot of money. at AWA's margins, it would take a lot of incremental revenue to add $3M to the bottom line.
nice job giving the green light to this one kirby and feldman.
Yes, 3 million is a lot of money and high-margin revenue. Let's assume that 0.5 million of that is going to the ad agency, then AWA would be left with 1.5 million AFTER-TAX profit from this move. Just for illustration, if you put a P/E of 35 (current average P/E for Broadcasting companies, whose revenues are mostly from advertising) on this 1.5 million, the value of this business "segment" alone would be 50 million, or nearly a buck a share.
BTW Ryanair boss O'Leary said long time ago that he thinks its possible to offer the ticket for free and make it up with inflight sales, entertainment and betting and gambling on the passengers' IFE systems. Given AWA's LV operations, this might be the natural extension ;-)
Does Kirby think anyone really buys his foolish statements. $3 Million will keep AWA a low cost carry. Gee Kirby what will the revenue impact be from customers who will be booking away from AWA on concerns of a pilot strike. Parker/Kirby, leaders??????????