Originally Posted by
BackOfTheBus
Ok, here is my problem with the pizza and flowers and half-empty planes to saturate Alaska's domestic destinations from SEA: Someone has to pay for it. The money to wage this war of destruction against AS is bankrolled by Delta passengers - getting screwed out of their SkyPesos both on earning (on cheap fares) and redemption (for coach and first/biz); getting screwed by the BIG FOUR (WN/AA/DL/UA) on many airfares that are frankly insane this year. The lowest fares from the East Coast to the West Coast have ticket up a good $50-100 rt this summer compared to last... Similar on shorter hops up and down the East Coast. So our money is being squandered on capacity dumping on Alaska, pocketing record profits for shareholders and management and bribing politicians to keep robust foreign carriers from fighting for the only remaining competitive market - the international flights.
"Standard Air" needs to be split right up in half with the UA-CO, DL-NW and AA-US mergers undone... Maybe even spin off WN-ATL (FL). Otherwise more and more (formerly) middle class families will be staying home or taking Greyhound.
I'll recount a personal example by way of comparison. I not too long ago was fortunate enough to have natural gas brought to my house and paid a connection fee of $2100. As a prelude, the natural gas utility conducted an information session for the community.
Someone asked why could not the utility spread the expansion and connection cost across the rates? The utility representative answered "We are a 100% regulated monopoly, and we are not permitted to do that".
The status quo of the U.S. airline industry is that it is pretty much an unregulated oligopoly with monopolistic concentrations in a laissez-faire environment. It is islands of competitiveness in a sea of non-competition. Unfortunately, this does mean as you assert that airlines can spread costs from competitive areas to less-competitive areas in which they have pricing power. In the status quo, price decouples from cost in many markets.