Jerry Maguire Moment?

Just a couple of tidbits for thought,

On the issue of costs going up in air travel since 1960 (inflation computation) let me point out a couple of things as we stroll through history:

< Start History >

1) In the 1950-60's the government set the price airline tickets

2) In 1960-70s airline reservation centers were staffed with humans that dropped marbles into glass jars representing planes to keep track of sold seats and tickets where written by hand and mailed via snail

3) In the 1960-70-80's there weren't any automated robots to build the bulk of airplanes, or CAD programs to design them, or outsourcing across the world for parts or heavy competition, engines were not as fuel efficient, winglets didn't exist and carbon offsets wasn't in wikipedia.

4) In the 1980-90s there was entire ecosystem of travel agents that provided the interface to passengers to purchase a ticket and plan their trips, they don't exist anymore except in corporate travel and niche markets as airlines removed commissions and the internet took over air travel and put them out of business.

5) In 2000's GDS had their distribution fees cut dramatically as airlines put "supplier web only" prices on their sites and used this as a bargaining chip to reduce distribution rates, next in firing line are credit card company fees.



Air travel IMHO is the most complex business on the planet, Safety, Security, Mother Nature, Labor Unions, Management, Airports, Entrepreneurs, Congress, Feds, Competition, Real-Time Quoting Systems, ...

And for the most part domestic airlines do a pretty good job of juggling hundreds of balls ...

And yet the following holds true:

100% of all air travelers want the cheapest price in reality less than 10% will get that cheapest price.

When you have a product where two people can sit side by side, one paying $1000 roundtrip and the other paying $100 roundtrip -- you have set yourself up for "whining" and to be honest it is pretty clear most airlines are immune to the complaining.

Tack on a bevy of new passenger fees and charge for ones that used to be "free" targeted directly at those paying the cheapest prices (as FF don't pay these fees) and again you have set yourself up for the whining.

I wonder how a legacy airline executive who is watching his favorite Sunday football team feels as he is inundated with commercials of baggage handlers lovingly waving buy to their "free" bags?

Are we shooting for a U.S. domestic air system where only the "rich" can afford to fly?

Is it really too much to ask (or whine about) the basics -- a clean, timely plane that lands with your checked bag, regardless of the price?

Business travelers have been paying $1,000 roundtrip for years and are now only complaining because their companies have slashed travel budgets and they can't visit their clients face to face to close that all important deal.

US Airways is pulling almost half of its seats out of Las Vegas early next year because it can't make money at what the public is willing to pay during a recession.

Raising prices "to what it is worth" isn't going to change that behavior.

The downstream consequences on Vegas alone are staggering and yet the city sees fit to add on a multi billion dollar expansion of McCarron (wonder who is going to pay for that?). http://cms.mccarran.com/dsweb/Get/Document-241330

Airlines in Europe like RyanAir and EasyJet make money selling $1 seats (outside of the global recession and poor investments in other airlines). Granted with a bevy of add-on fees http://wizzair.com/useful_information/service_fees/).

And let's not forget the government and airports who have their hands out, on a $100 connecting roundtrip airfare extract $7.5 sales taxes, $10 Security fee, $18 airport fees, $14.40 FAA fee, or approximately $50 (an additional 50%).

The bottom line is that air travel is a fragile ecosystem and defining "what it is worth" is more complicated than meets the eye.

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