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When Airline Bankruptcy Is A Good Thing – Part Two

Most of our domestic airlines continue their rapid downward spiral. Planes have been grounded, flights cancelled, maintenance schedules disregarded, and most disturbingly, incompetent airline management has enacted a “bait and switch” approach towards their consumers that will exacerbate an already bad relationship.

Flyers are now being quoted what appears to be a low price when they book their flight, only to be assaulted with all kinds of fees when they get to the airport. And the impact of these fees extends past financial implications. Charging consumers to check their bags impacts a consumer’s pocketbook, but the even bigger problem is that it will cause more consumers to carry luggage on the plane. This means longer security lines (and most likely shifts a financial burden to the TSAs as they will need more agents to check these bags), and potentially horrendous delays loading passengers. Think about how slowly a plane loads now as people try to stuff huge bags into tiny overheads, and then double the problem! This means more flights will be late, and longer queues on the tarmac. That also means more flights burning fuel on the ground as they wait to take off (wasn’t the high cost of fuel one of the problems?).

Imagine if other industries were allowed to conduct themselves the way airlines operate? What would happen if Ruth Chris Steakhouse suddenly offered a $9.99 steak dinner – with the stipulation that you had to prepay for your meal? You might think this is a great deal, give them your credit card, and pack up the entire family to go to dinner. But when you get there they tell you there is an extra fee of $10 each if you want to sit down during dinner (otherwise your meal will be served in the parking lot), plus a $5.00 silverware fee (an extra dollar if you want a steak knife), $1.00 for steak sauce, $2.50 for a glass of water, and all diners are assessed a dishwashing fee of $3.00.
You can walk out of a restaurant, but abandoning an airline reservation because you learned you have been scammed is typically a lot more difficult. You have usually prepaid a large amount, and are traveling for a reason – you have a cruise to make, a meeting or wedding to attend, etc. This makes the airline bait and switch all the more heinous, and it is an embarrassment that major American corporations conduct themselves in such a sleazy manner.

This all might just lead to a bigger conclusion. If the only way airlines can profitably operate is to scam consumers in the door with a low price and then hit them with surcharges, then we have to wonder about the financial viability of the entire industry as currently structured. Certainly we would all like easy availability to inexpensive luxuries. I would like to buy a new Mercedes for $10,000 – but it isn’t going to happen. Perhaps we should accept that the days of inexpensive air travel are over. It might be a good thing that planes are being grounded. We might not need as much capacity. And let Econ 101 principles kick in. Airlines should all charge a reasonable price that allows them to make a profit and properly service their customers (and tell consumers the price – don’t lie to them). There will still be plenty of people that want to fly, but I suspect there will be fewer planes in the air (maybe that is a good thing), and unfortunately a few airlines will have to go out of business. But in the end we will have a solid industry with a good product, not the dishonest, embarrassing airline business travelers now have to endure.

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