Sunday, September 12, 2004

Airlines...

Reading about the airlines being in trouble today reminds me of a few sad things about the industry.

It's amazing to me how consistently stupid airline management has been over the past 10 years. When everyone competes for the same customer, using the same strategy, there can only be one winner...the absolute cheapest airline. None of the majors besides Southwest has a ghost of a chance of winning that game...but they insist on playing it.Maybe some of the more distressed airlines will start offering something besides air travel that sucks. Charge a little bit more for it and bingo, you can stop worrying about squeezing another penny per ASM out of your already skeletal operations.If you look closely at who is making the most money right now, you will see that (other than Southwest, the clear cheapo flying that sucks winner), the airlines that are working on adding value to their service AND charging just a little more for it are the ones that are on top. This is because there are only THREE things that will create airline profitability right now: 1) Being the absolute cheapest (that one is taken), 2) Dominating a good hub and charging the hell out of the customers in that city (Northwest is good at this) and 3) Creating strong customer preference (Midwest Express).

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