SkyHog said:
I dunno Richard, it sounds like you may be making it too simple. Obviously, the seat will grab the money that the market will pay, but that could be why United is in such financial ruin right now (and yes, I know its getting better).
Thanks for the come back, Nick. Aviation (Pt 121) is such a wacky game, I really don't know how they do it. Just when I think I have a good working knowledge of their fee structure they change the whole ball. And then their price offerings--who can figure that out??? I doubt it's tied to the market, it's more like they got a ouiji board in the board room. The industry is in ruin mainly because of corporate raiding in cahoots with a silly ass union (That'll net me lots of points) which is hell bent to make concession after concession as long as the top brass gets theirs. It's like the carriers and the union are in cahoots.
If that sounds contradictory to what I said in my earlier post about perhaps the consumer bearing responsibilty for the shoddy service it is not. Previously I was talking about the level of service, here I'm talking about continued profit taking.
People are flying, they have a real need to fly, they will pay almost anything to get a reliable carrier. The carriers shift their structure so much that consumer loyalty has fallen of markedly because the consumer has become so confused as to what constitutes a good value. By default, they fall back to price. Always does the consumer fall back to price. And with the current bankruptcy laws and a glad handing US Congress the carriers have litle incentive to keep the consumer in mind; more likely, they have every incentive to shine on the consumer.
Also, with Wal-Mart, Costco, Home Depot and the consumer's whetted appetite for steep discounts which allows those companies to not just thrive but excell coupled with marginal consumer loyalty and transportation needs the carriers can price a seat any which way they want (changes daily even on the same routes within the same season) and the public will take it. Remember, the carriers change tactics so often the consumer has become unable to recognize value. Among so many factors which have changed the public's perception of what constitutes a good value and what is discount there is one thing which stands out prominently. Back then, companies offered those things as part of the total package. Nowadays, companies charge for each little thing. The FAA mandates seatbelts but if the didn't you could imagine the carriers would charge extra for seatbelts. Perhaps they do already. Head sets for the in-flight movie is another; back then the were given to you. Today, it'll cost your $5, cash only please. You get my point.
There was a time when airlines offered much more than just a seat as a way of getting people to choose their airline over the competetors. There was a time when flight attendants seemed to care. I know there are still good ones out there, just like with any industry, but of the last 6 flights I've taken, I've probably run across one or two good ones, and both of them were on Southwest.
Ah, the good ol days....Yeah, the stews were trained nurses too...at one time and IBM was a really good employer if you could just get on with them. Even the consumer is to blame. Just get me from A-->B, no delay. Why pay for those frivolous amenities when all I want is to get to my destination? I want low cost! Nay, I want the
lowest cost. Other than the select international traveler I doubt many folks are willing to pay a premium price. In this regard you could say the carriers are being reactive to the demands of the consumer.
I'm at work and bored, so here's an example of overpricing of a one way flight from Los Angeles to La Guardia on January 11th.
United Airlines
Cheapest Fare: $154.90
One Stop at ORD
Boeing 767 and Airbus A320
American Airlines
Cheapest Fare: $168
One Stop at FLL (Seriously!!)
Boeing 757 and Boeing 737
Southwest Airlines
Cheapest Fare: $114
One stop at MDW
Boeing 737
The United and Southwest are almost identical flights...what is the difference? To me, channel 9 makes the United flight worth it. It makes the flight go by a lot quicker. What makes United worth more money? Certainly not the customer service. Definitely not nicer and more comfortable chairs. I really don't know the answer, but I suspect the answer is why Southwest is profitable and United needs the government's help to survive.
I'm no economics major or anything, but it seems to me that whatever makes an airline worth using is what keeps people coming. Take away stuff without changing the price...you lose customers.
Those aren't examples of overpricing, they only show the price offerings made through whatever your source was. I could go to, say, 4 different on-line ticketing sources and get as many different prices for the same seat on the same route for the same day. But that is only tangental; how do you define
overpricing? Perhaps the other cariers are more underpriced than some. The point is the price is set according to a great many and disparate factors, subject to change. Do you really think a 757 with 84 pax LAX-LGA with a stop in ORD is even breaking even at those prices? Someone is subsidizing them, whether it be the business section or, yes, your tax dollars.
You really must quit using the term,
worth, it is such a subjective term that it carries different meanings for different folks
. Having Chan 9 may make enduring horrible service
worth it to you but others may think you are nuts to base the price on such an esoteric amenity. As long as they have a seat and the engines work people will continue to board the flight. They have to because of the need to transport themselves further than the next block or the next town and do it in a day or less.
I'm not an economist either (although I can spell it correctly most of the time). I think the Congress should give the airlines a final 90 day warning to get off the dole or go like the Dodo bird. It would be better than reregulation and watch as you see all those insolvent carriers all of a sudden get back into the black.
Enjoy your night.
