Monday, June 23, 2008

Airline Pricing

We have all seen the reports of new fees being imposed by the airlines, particularly for checked luggage. It's amazing to me that an industry with such an awful reputation for customer service would now choose to nickel and dime its customers in this fashion, rather than raise fares slightly. It's especially befuddling to charge for checked luggage, because this scheme creates an even bigger incentive for customers to try to carry on everything that they have. More carry-on bags means a slower boarding process and longer turnaround times. That means planes sitting on the ground rather than flying... which decreases profits, as well as angers customers.

Then, we have the befuddling news that United Airlines may require minimum stays on some routes. I'm not sure that I understand this policy. Does it mean that I can't fly from Boston to DC and back on the same day with United? Why would they turn away that business, when their goal should be to fill the planes so as to spread their fixed costs over as many passengers as possible? If this is true, then perhaps there is some economic reason for doing so, but again, it sure does not seem like a move designed to please its customers.