Originally Posted by
humanoid94
I just hope for the sake of the industry that the current demand curve for travel is as inelastic as they are apparently hoping it is. If, as I suspect, technological increases (videoconferencing, teleconferencing, net-meetings, etc...)has made the demand curve more elastic, this "shrink to survive" strategy is in fact a path to certain death.
Eh?
Shrinking works just fine with elastic demand - you increase the price, less people fly, and you keep only the capacity to service the reduced demand at a higher margin.
What's interesting is that a wee bit shy 10% of oil consumption in the US is jet fuel. If there's half as many flights, does that help with the regular gas prices a bit?