General, I can’t believe you would waste your time to post such an article. What does the price of oil have to do with these airlines staying in business? Sure the price of oil affects every commodity. But balance comes with a price increase of such commodity. Maybe an over simplfication but once again the carriage is pulling the horse. Airlines are STILL trying to justify selling low cost tickets in an increasingly demanding pricing environment. Since when do you run a business by underpricing your product, depending instead on the credit market “borrowing” to suppliment your income? Because the “market” says “price a seat at $79.00?” Normal business practice is to pass the added cost to the consumer. Competition you might say! Well here is the bottom line: promise less but deliver more! Lets not be fooled. Global demand is out stripping supply by all consensus including that of the ATA. You will create loyalty from this increasing DEMAND. Oh yes there’s inflation too!! Well there’s government intervention. Ever wonder why oil is left out when they consider core inflation? Another example of masking the truth (probabily why the worth of the dollar is bordering third world standards). Besides, remember “deregulation?” Free market driving prices and market entrance/availability bla, bla. The tax guys don’t hesitate to squeeze their fair share of revenue out of each seat in additional fees through new regulations and legislation. What for? To foster “competition”? But the consumer doesn’t care because they can fly coast to coast for 79 bucks!
Name another business that don’t pass cost on? The gas stations do and you don’t drive less because you paying more at the pump.Christ! Even food prices have gone up! Do you eat less because the transports continue to increase delivery prices to off set the higher cost. Basic need you might argue. Heck it cost more to sleep in a hotel room or to take a taxi from the airport to the city than what it cost to get there by air. Increasing the price of goods and services provided is commom sense. The lending market is there to grow your business. Procuring high expenditure items such as new facilities, airplanes, routes etc, etc.
These LCC have only themselves to blame. Driving the cost down of an otherwise expensive commodity to produce. These business managers, CEO and below, ONLY keep grinding away at cost, the result of which doesn’t surprise me today. 1000’s of cancelled flight, million of dollars in fines, more scrutiny from the federales, to do what? KEEP TICKET PRICES DOWN?.
When u read BS like that you realise that one no longer needs even a highschool education to get an MBA. The real failure rest with the lack of innovative brains in the industry today. We employ business managers today who could bearly manage their own personal economics muchless that of an airline business. If they were held to the high accountability standards as us pilots, then maybe our economic situation will be much more favorable.
So General, quit posting such nonsense!