On Tue, 08 Jul 2008 16:16:02 -0700, SMS
wrote:
>Robert Neville wrote:
>> "Sharkbait" wrote:
>>
>>> Simply increase the cost of your seats
>>> relative to the cost of your fuel.
>>
>> So I take it economics wasn't your strong suit in school?
>>
>> As a refresher, airline tickets are very price sensitive. Raising the lowest
>> fares as little as $5 or $10 will cause that seat to go unsold. The potential
>> passenger will either go to a competitor who hasn't raised fares or not fly at
>> all. So instead of increasing the revenue the airline earns on each flight, they
>> lose even more.
>
>This is true. The airlines realize that they're entering a stage where
>the "not fly at all" option is being chosen by more travelers, and are
>cutting capacity because they can't continue to sell all the capacity
>they have at a price that is acceptable to both parties.
>
>Still, the nickel and diming is extremely annoying. At least Southwest
>isn't playing this game.
As soon as their fuel hedges run out they will. |