Originally Posted by bernardd

It is not a FACT that consumers buy air travel only based on price. It may be an important consideration, but it's not the only factor in a purchase. There's a whole spectrum of travellers each with its own weighting of importance, which is not constant. It's the role of an airlines management, including but not exclusively, the sales & marketing operation to focus on the areas in which it can be successful, and possible walk away from those in which it can't.

If you go on believing incorrectly the only airline seat that can be sold is the cheapest, then CO ought to have been re-modelled more than 5 years ago to have a lower cost base than WN, B6, F9 etc. It sounds like you'd better start hoping you're wrong.

Originally Posted by pbarnette

I think, perhaps, that you are overstating the case. The issue isn't whether CO can charge a premium, but just how large of a premium, and over how large of a market. I believe that there is a market for a premium service on some routes - SQ seems to do ok at the high end.

BUUUUUUT... just how much provision is there for this premium within the US? What could you possibly offer as a benefit on a 2-hour flight that will generate significant revenue? I can think of almost nothing that could conceivably bring enough consistent revenues over the bulk of CO's network to justify institutionalized higher costs. Because of that, I think that any premium products are best treated as ancillary products (pay-for meals, pay-for extra legroom, etc) rather than bundled into the product.