Originally Posted by
pharmalady
d) price - adjusted price, per my economist friend, would be 3-4x higher than market competition has provided
IMHO, 3-4x a bit of an exaggeration. I'd say roughly 2x overall, but it varies quite a bit route-to-route. I remember once seeing an old table of airfares from the 1970's. Two things stood out to me:
- Pre-deregulation, the premium to move from economy to first class was much smaller than it is today.
- Adjusted for inflation, long-haul fares between major cities appeared much higher than today, easily 3x. Some short-haul fares didn't seem too out of line with what you'd see today.
Also remember, while there were discounted pre-purchase excursion fares, most airfares were full fare tickets, with no advanced purchase requirement, fully refundable and changeable without fees. An of course there were no baggage fees or charges for food. Also, since airlines could not complete on price, they competed on service, meaning service in all classes was much better than what you see today.
Interestingly, the federal government only regulated interstate fares. A big driver of the push to deregulate were the California and Texas intrastate air markets, which had competitive markets and significantly cheaper airfares.