Originally Posted by
Surge2009
True - synergies do take several years for their full potentital to hit - but that is no reason to escalate prices/fees fairly quickly.
How is the airline supposed to make money in the interim if prices are held at a level where they no longer align with demand or support variable costs?
Originally Posted by
Surge2009
Second of all, the two shocks you mentioned (fuel price escalation and the global meltdown)....Fuel prices dropped back down prior to the merger approval with Delta, meaning those "fees" they added to NWA's structure were un-necessary. Second of all, the travel industry has been quite aware that counter-acting the global meltdown can only be achieved by keeping prices where they are at - not increasing them. The most successfull travel oriented businesses (Disney and Vegas in general) have realized this and have managed to stay afloat simply by keeping prices where they were (for the most part) or via discounting. Granted, we are talking about hotels/attractions and not airfares, but they do collect their money from the same people at the end of the day.
You can't really compare an airline to Disney or Vegas. The cost structures (and business model) are completely different.