Back in the Seat

After an absence of about a year due to unrelated issues, I'm going to make another attempt at this. A lot has happened in the airline industry and the world as a whole in the last year so let's get to it.

This year has seen a financial collapse unlike anything since the Great Depression, a continuation of two wars, spiking oil prices, and a historic election; all of which have a direct effect on the airline industry. In the industry specifically we've seen the approval of a mega-merger between Northwest and Delta airlines, the failed attempt by Continental and United to merge, as well as numerous bankruptcies and outright shutdowns. Needless to say this industry is not immune to the volatilities of the financial sector as a whole and may be even more susceptible due to the wild swings in the price of oil as of late. I am of the opinion that because of all of the afore mentioned problems, more mergers are in the offing. Pricing control is paramount in this industry. It just can't be done with this many carriers in the industry. This is the ONLY industry I know where the price of the commodity (i.e. seat) is set below the profitability benchmark.

And this leads me to my last item; the new pricing structure that has become popular as of late: a la carte. Ever since airlines began carrying passengers a ticket was an all-inclusive item. Checked bags, drinks, meals, they were all included with the price of the ticket. Now it feels as if one is being nickled and dimed to death. But (and I can hear the howls of protest now) if one looks at it from a different angle it doesn't seem so outrageous. When you go to a sporting event you buy a ticket and that ticket is for a SEAT. It doesn't get you the $7 hotdog or the $10 beer. If it did everyone would have to pay more whether or not you wanted either of these things. The same thing is happening in the airline industry. Those who need not check a bag or who wish to eat before the flight will now have the option of paying less than those that do exercise those options. I believe this will become the standard model for all airlines down the road like it or not. But enough talk about things above my paygrade, the next posting we will get back to the things I know a little bit more about: airplanes and flying.