1) Everyone who has run an airline for 30 years is an idiot. It never occurred to them that people would pay more for better service, even though they all went to prestigious b-schools. The author of this blog post is a genius.
2) The author of this blog post has no idea about the myriad of government regulations and economic realities of the airline industry.
If I'm ever arrogant enough to assume #1, shoot me.
They don't make money because they compete on fares, which is because that's all most people care about. Those who care about luxury just fly first, but that's a small percent of the market. Even most people in first got there via free upgrades.
After deregulation, especially in the advent of low cost regional carriers, there have simply been too many airlines. Bankruptcies and consolidation are going to take care of that very soon. This happens all the time in new industries (and the airline industry is effectively new since deregulation reshaped it so much).
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Yeah. There are two possible scenarios.
1) Everyone who has run an airline for 30 years is an idiot. It never occurred to them that people would pay more for better service, even though they all went to prestigious b-schools. The author of this blog post is a genius.
2) The author of this blog post has no idea about the myriad of government regulations and economic realities of the airline industry.
If I'm ever arrogant enough to assume #1, shoot me.
You are correct on both points.
Maybe you have a solution as to why the travel industry doesn't make any money? Because obviously what they have now doesn't work.
They don't make money because they compete on fares, which is because that's all most people care about. Those who care about luxury just fly first, but that's a small percent of the market. Even most people in first got there via free upgrades.
After deregulation, especially in the advent of low cost regional carriers, there have simply been too many airlines. Bankruptcies and consolidation are going to take care of that very soon. This happens all the time in new industries (and the airline industry is effectively new since deregulation reshaped it so much).