Originally Posted by DHAST
You don't have to buy it. It's the combination of factors that makes life difficult for the airlines. I'm also going to wager that the more money someone has, the less likely they are to be flying on any airline within the US. So how are these people travelling? By private jet. I've made my living in the past four years working in the private jet industry, and it's alive and well. In fact, it's forecasted to grow, all the while the airlines supposedly have "over capacity." Truth is, the people that CAN afford luxury, will pay for luxury. Those are the fares the airlines need.
The segment you're talking about is a very small percentage of the overall market. It is growing quickly, but isn't a huge part of the market.
I know the environment in which airlines function; I just don't by the standard arguments that are carted out to explain lack of profitability.
Originally Posted by DHAST
You .....ed about your $859 ticket EWR-LAX. Well, if you calculate the "actual" cost, based on CASM, you should have paid $600 rt for the base fare. Throw on a few more $ in taxes, and some profit for CO, and you just barely paid for your "fair share" of the flight. If *you* refuse to pay for a profitable fare to fly on that flight, then who should? Who will? Who's going to subsidize your less-than-CASM fare so you can fly cheaply?
I have no idea what you're talking about here. I checked and in the past two years, I have never paid $859 for EWR/LAX (actually, I buy LAX/EWR). You may be mixing me up with someone else in another post.
Originally Posted by DHAST
I'd like to see some marketing statistics that can demonstrate the demand for air travel if the ticket prices for that route never dropped below $750. I guarantee you one thing... there will be very very few "long weekends" for me.
No idea where you'd get that information. I have seen some interesting models, where the quantity demanded drops off sharply with increasing price.
Originally Posted by DHAST
I do. Air travel has a price point. With costs as high as they are/were, the airlines are having a difficult time generating the appropriate revenue. If a ticket costs too much, I don't go. Period. The airlines' problem is that they are trying to figure out how to get their average costs below the average price point so that they can turn a profit. The high yield customers are slowly disappearing, which lowers the average yield of those who are left.
Airlines just don't have pricing power. They've given everything away. Cutting costs is great, but frankly the have to figure out a way to fix the top line.