Originally Posted by
BearX220
I think $331 IS reasonable for an almost-transcon flight in summer season. 20 years ago I remember thinking $400 was the fair floor for a cross-country roundrip. Ten years ago my father-in-law thought $320 was "highway robbery" for a TPA-SEA roundtrip. Now you think a similar flight ought to cost $210 all in. What's going on here? At this rate in 20 years time people will scoff at a $7 transcon fare and wait for the $5 sale. And we wonder why the airlines lose money.
To be fair, the
airlines created this expectation through their own actions. If you commoditize a product to its bare-bones core and compete purely on price it becomes incredibly hard later to reset client expectations back to a higher price.
For 15-20 years now (more?), the airlines have basically cut price and then tried to maintain margins by cutting costs. Basic math tells you that if you take 1% off the top line you have to take greater than 1% out of your cost structure just to stay even. Take out costs, water down the product, and you reduce the value of the product...a vicious downward spiral.
The airlines can take back pricing power by slashing supply, but that's just a short-term tactic. I don't feel like I've really gotten an incremental $120 of value out of that transcon that used to be $210 - I just know I'm being held hostage by laws of supply and demand. If airlines ever want to really grow market share and market size (capacity), they'll have to find another lever to pull.
I don't have the answers...I don't work for any of these companies...but you can't blame the customer at all for the current expectations. It's the airlines who established those expectations to begin with.