First off, flying is not cheap public transportation flying
however flying on commercial airlines should be kept relatively affordable;
however clearly with all of the concern over lack of profitability from U.S.
air carriers something must be done. Looking upon the past flying on commercial
airlines has been a very luxurious experience but slowly ever since the Airline
Deregulation Act of 1978 (Deregulation Act of 1978) where the
government lifted control of fares and routing it has been a frenzy for the airlines
to compete until prices came to where they are today which are historically
extremely low even with inflation of the U.S. dollar. Additionally to reduced
government control on the industry it also made it drastically easier for new
airlines to start up. Many of these new airlines were what are called today “Low
Cost Airlines” which even drove the cost of airline tickets further downward.
So how would I propose we make the industry more profitable
and maintain the approximately the same cost? first you can start out with
cutting all of the ridiculous taxes (Ticket Taxes)placed on each and every ticket but keeping the actual cost of the
ticket (Tax included vs. Tax not included) the same making that taxed portion a
profit which would be good, but of course this is not fool proof, It is the
companies responsibility to make the pricing decision, they could just reduce
the cost that much more and be right back to where we are now, but at the end
of the day it is a free market economy and it is not the responsibility of the
government or the people to keep these airlines in business, if they want to
run themselves into the ground then so be it.
With the cost of airline tickets being so unbelievably cheap
in many cases it is now cheaper to fly than drive. There are many reasons as to
why this has happened but I can at least speculate about a few. First the
addition of regional airlines, in the past there were no such thing of a low
cost regional operator, another could be the extremely increased fuel economy
per passenger on airlines versus the minor gains in the automobile world, and
the decreased wages across the board in the airline industry which is further
driving the prices down.
In the event that my ideas about how to fix this mess of an industry
are ignored (highly probable) and the industry focuses more toward a luxurious
experience I would for see less overall flying total because the demand would
clearly drop, a result of this drop would be less job availability for those of
us aiming for the airlines like myself, additionally I would expect to see the
regional (low cost) airlines either cease to exist or rework there business
model to serve the needs of this new demand. These things could be considered
negative to some who are exploring the options of the airlines but it would not
all be bad, I would not be surprised to see higher wages for airline employees
due to the higher profitability that would be attained through this scenario.
These are just some of the things that go through my mind,
who knows what the future will hold for all of us looking toward the airlines!
What is driving the industry toward luxury in your opinion? I think cheap tickets for the masses are here to stay.
ReplyDeleteI never said the industry was going toward luxury...I was just answering the question, the "what if" part. I agree cheap tickets won't go away unless the airlines stop competing so hard for the cheapest ticket.
ReplyDeleteI agree that cutting the taxes would result in airlines reducing their prices even more. In my opinion, the cheap tickets are only going to result in a "cheap" experience. Customer service, equipment and staff will all be affected. Eventually, these "cheap" operators will fail, as we have seen in the past.
ReplyDeleteI don't know if they will fail I almost wonder if some of these companies are "Too big to Fail", I don't think that it should be that way but who really knows.
ReplyDeleteI don't know, I would hope that if taxes were to be cut that the airlines would lower the cost more. But would they really do that if taxes were reduced? And would the government really reduce the taxes when they're already so far in the hole? It's a great idea and would be nice if it happened, but it's a long stretch.
ReplyDeleteI am saying they reduce the taxes to cover there losses that they are already enduring not actually lower ticket prices the industry needs more money to survive right now and unless congress wants to bail out the industry I don't think the airlines have an option but to increase revenue, this is just an option that if taxes were cut maybe eventual government intervention could be avoided.
ReplyDeleteDavid - Interesting concept - "Too big to fail". People could have never imagined that Pan Am or Eastern would have failed, but a combination of events and poor management brought them both down. The thing about cutting taxes...the first thing that comes to my mind is where's all the NextGen funding going to come from?
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