Originally Posted by
NFeldberg
Here is what every article pertaining to the "crappy airline experience" of today should say.
The Flying Public's Constant Addiction and Demand for $200 Flights has Completely Screwed the Airline Industry
That doesn't make any sense. The demand side alone can't force airlines to offer cheap tickets.
We didn't screw them.
Do people realize what it costs to operate an airliner?
No? Trick question? Why do I care, unless I'm an institutional investor in airlines? If I'm just a retail investor, I don't care because I'd always stay the hell away from these stocks! @:-)
I don't care about their operational costs: I only assess whether the transportation service provided is valuable to me. On some level, I do hope they can remain in business because I want the service to exist, but I also realize that
they control their own pricing models - not me. They can offer me a $200 ticket and I might buy it. If they raise that price 50% to $300, I'll decide whether the trip is still worth it.
This discussion seems silly in 2013, because at this point the airlines have actually done a good job of taking back pricing power by controlling supply. The cheap leisure fares are scarce, and they are filling the planes with business travelers to fairly high loads and yields.
This time at least, they seem to have changed their ways. IMHO, for the domestic U.S. market it's in large part because Southwest has decided to become a premium product, pricing well
above the legacies instead of leading fare wars. If somebody wants to start a fare war, it's Virgin or Frontier, and those don't turn into nationwide fare wars. Southwest occasionally lobs in a systemwide sale but they are no longer insane fares - just "decent" fares with lots of blackouts and exclusions.
"Thank you for purchasing your ticket on XYZ Airlines, below you will see a breakdown cost analysis for your flight with us. We will apply your $200 to purchase 50 gallons of jet fuel on our airplane that holds 30,000 gallons"
Meh. Technobabble for aviation nerds. For everyone else, it's just a bus ticket. Get me from point A to point B.