Price collusion?
Feb 3, 2017 | 2:38 am
#3
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You imply its done in some sort of sneaky way to maximise revenue?
ever thought it might just be competition in action? Why would an airline NOT try to be competitive on price? Supermarkets monitor each others prices and adjust their own accordingly...why wouldn't airlines?
Same (or similar) price does NOT prove "collusion"!
ever thought it might just be competition in action? Why would an airline NOT try to be competitive on price? Supermarkets monitor each others prices and adjust their own accordingly...why wouldn't airlines?
Same (or similar) price does NOT prove "collusion"!
Feb 3, 2017 | 3:53 am
#4
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Indeed. There's nothing illegal about one merchant looking out his proverbial window to see what his competitor is charging and choosing to either match it or undercut it by some nominal amount.
As for the airline industry, I remember reading 10 years ago that standard practice was for airlines to raise prices via "trial balloons". An airline would push out a small price increase, say $10 o/w on domestic tickets, and would then monitor the market to see if major competitors matched it. If enough raised to match, the increase stayed. If too few or none matched it, the initiator would deem the increase a failure and roll it back.
As for the airline industry, I remember reading 10 years ago that standard practice was for airlines to raise prices via "trial balloons". An airline would push out a small price increase, say $10 o/w on domestic tickets, and would then monitor the market to see if major competitors matched it. If enough raised to match, the increase stayed. If too few or none matched it, the initiator would deem the increase a failure and roll it back.
Feb 3, 2017 | 4:55 am
#5
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I do. Monitoring and matching competitor prices is essential in a highly competitive market. Do you seriously think all the competitors sit around a big table and agree what they're going to charge for every flight? Someone makes a move and others have no choice but to follow it. That's not collusion.
Feb 3, 2017 | 6:07 am
#6
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if i was running united and in on the conspiracy, i certainly wouldnt bank on people taking an extra connection and 8 hour transit time for $5 savings...
Feb 3, 2017 | 6:40 am
#7
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I doubt either of these airlines spends much time or effort worrying about what to charge the handful of people who want to travel between Seattle and Bucharest. I'm sure this is a side effect of the prices of whatever sectors make up this route in either case. Those prices, of course, are based (as discussed above) in part on watching what competitors charge for those flights. The fact that fares on this relatively rare trip came out so close is probably no more than a coincidence. (Even rare coincidences happen. They just happen rarely.)
Feb 3, 2017 | 9:58 am
#9
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Back in the 80s the DOT alleged that there was collusion and those affected (myself included) received certificates worth $20 off whatever fare you were booking. As I recall I received 10 of those certificates but only ended up using one of them.
The distinction between then and now is the collusion part. It is not unlawful to match a competitor's price. What is prohibited is agreeing with a competitor, in advance, as to what your prices will be.
The distinction between then and now is the collusion part. It is not unlawful to match a competitor's price. What is prohibited is agreeing with a competitor, in advance, as to what your prices will be.
Feb 3, 2017 | 12:42 pm
#10
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Was this "paid out" in the '90s and you could only apply them up to 20% of the fare? The only one who made out on those were the anti-trust lawyers who filed the class action.
Feb 3, 2017 | 7:49 pm
#11
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The definition of collusion is not "has the same price".
If you believe that competitive pricing and price matching is collusion, then half the CEOs of businesses in this country should be in jail.
Gas stations across from each other down the block from me have the same prices. Lock 'em up?
If you believe that competitive pricing and price matching is collusion, then half the CEOs of businesses in this country should be in jail.
Gas stations across from each other down the block from me have the same prices. Lock 'em up?
Feb 3, 2017 | 8:02 pm
#12
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I wonder if dead horses know that they are being beaten again? Because this poor dead horse surely gets beaten regularly.
Unless OP has some evidence that UA & DL representatives held some secret conspiratorial meeting to plot prices for the lucrative SEA-OTP market, this is nothing more than software-based price-matching.
Worse, OP didn't do his homework. Neither UA nor DL serves OP. So, even if they have conspired, they are paying over the bulk of the revenue to LH, KL or AF.
Unless OP has some evidence that UA & DL representatives held some secret conspiratorial meeting to plot prices for the lucrative SEA-OTP market, this is nothing more than software-based price-matching.
Worse, OP didn't do his homework. Neither UA nor DL serves OP. So, even if they have conspired, they are paying over the bulk of the revenue to LH, KL or AF.
Feb 4, 2017 | 12:35 am
#13
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I wanted to rent a storage locker once. I checked out three places and was surprised to find out that they all charged pretty much the same rent. My conclusion was that they were colluding on price.
Feb 4, 2017 | 2:46 pm
#14
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But back on topic, in competitive markets the prices seem to vary as to service levels which is predictable. There are myriad ways to get from London to the Bay Area and the price goes down if you are prepared to stop. If we just look at non-stop business, however, it's not surprising prices are generally similar as so are the products. If, for example, UA was $1000 cheaper it would find itself full so would either have no seats for sale or would figure out they could charge more - it's not rocket science.
What is more interesting is PE pricing which is all over the place and sometimes you can find the better products at lower prices than the worse ones.
Feb 4, 2017 | 7:22 pm
#15
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As for the airline industry, I remember reading 10 years ago that standard practice was for airlines to raise prices via "trial balloons". An airline would push out a small price increase, say $10 o/w on domestic tickets, and would then monitor the market to see if major competitors matched it. If enough raised to match, the increase stayed. If too few or none matched it, the initiator would deem the increase a failure and roll it back.