Jim Davis wrote:
> BINGO!!!! That's the main issue. Cheap Fares. Everyone wants cheap fares.
> So the airlines are now trying to keep their fares reasonable, but still
> stay in operation.
This isn't about cheap fares per say, It is about competition.
When Soutwest gets a huge chunk of its fuel at $55/barrel, and less
healthy airlines were not in a position to hedge a lot of their fuel
needs are stuck paying $130/barrel for a large portion of their daily
needs, then those unhealthy airlines are stuck:
Since Southwest doesn't need to raise dare that much, the other airlines
are having difficulty raising their fares. So they hide those increases
in sideline costs like baggage, drinks etc.
If all airlines had equal access to the same fuel at the same costs, the
situation would be very different and you might find the legacy
carriuers still serving meals while Southwest was still just a cattle
class carrier.
In the end, nickel and diming customers won't even come close to making
up for the higher fuel costs and airlines will still end up losing
billions this year (except for those airlines with large portion of
their needs hedged at reasonable prices).
In fact, AA's $15 luggage feel might not even pay for itself when you
consider the extra time taken for check-in. Same for the $2 water on US
Air. FA's will be mighty busy collecting change on aircraft. And people
will end up bringing their own drinks. Opps, can't bring drinks accross
security thanks to the Bliar/Bush follies. |