This past Monday, Delta and American announced a fare hike of up to $120 roundtrip on routes favored by business travelers - figuring that they wouldn't complain about what they had to pay.
They counted on the other major carriers joining in so that an across the board fare increase would ensue, and there would be no competitive advantage for anyone.
United, Continental, and USAir joined in. Southwest did not.
Then on Wednesday, USAir changed its mind and rescinded the increases. United and Continental did likewise.
Delta and American scaled back but keep some of the increase.
They are finding that the market is quite a bit more elastic than it used tio be, and people won't automatically accept price increases - particularly for what they get in return, which is absolutely nothing but a higher fee.
Isn't competition and the free market great?
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Steve Hoffacker - Consultant, Coach, Author, Blogger, Photographer, Motivator, Teacher, & Strategist - for Realtors, Real Estate Sales Professionals, Home Builders, New Home Salespeople, Entrepreneurs, Small Business Owners, and Independent Sales Representatives.
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Hi Steve. I'm glad that some businesses epitomize the free market and how NOT to let the government interfere LOL
Steve,
The airlines will find that there is a price point where people will use videoconferencing, rather than travel. They're approaching that point fast.
Rich
Southwest is calling it's own shots. How novel.
Steve, consumers are starting to wake up and are rejecting higher fees for less value, about time!
Steve
It appears that they misjudged the market.
Good luck and success.
Lou Ludwig
Steve, it's the taxes that are killing us. Airport taxes, fuel taxes, etc. When you see what looks like a great deal then add the taxes it doesn't look so good anymore.
It is cheaper for us to drive to Buffalo and fly from there to Florida rather than fly from Toronto airport. Now I just read this week that Obama wants to charge Canadians $5.50 per person to enter the U.S. Not fair lol.
Steve, It is great when businesses have to listen to consumers. I wonder what it would take to get bankers to pay any attention?
You mean Obama and all of his czars did not tell them mto change their prices. Uh oh. This is gonna piss of some libs.
Lana,
According to some the deregulation of airlines is an issue. Thanks. :)
Steve
Rich,
I cut my air travel to just 2 trips last year and one so far this year. :)
Steve
Suzanne,
Yes you might expect that. Now if they could make TSA go away. :)
Steve
Silvia,
Yes it is time. :)
Steve
Lou,
I'd say so. Thanks. :)
Steve
Jenny,
You're right, and that proposed entry tax is so stupid. :)
Steve
Gary,
Cut them off from the fed and the feds. :)
Steve
Kevin,
Ain't that something? :)
Steve