08-11-2008, 05:47 AM
In the short term, the airlines can get away with alienating a certain number of customers because they are all cutting capacity and will have fewer seats to sell. The customers who get mad and ditch Airline A may just switch to Airline B which has had an equal number get mad at them and switch to Airline A, or somebody else. In the longer term, however, people are going to remember who screwed them over the worst, and it will come back to haunt them. There is a race to the bottom, and whoever lands there the hardest will eventually pay a price.
And Mr. Rabi is right about the airlines selling miles. There have been several of them recently whose only profitable business sector was the selling of miles. At one point recently, American's frequent flyer program was given a higher monetary value by Wall Street than the airline as a whole.
What this means for Hawaii is obviously a difficult environment for the tourist business, unless and until oil prices drop to something like $70. That is what some of the airlines give as the top price that they can maintain their previous levels of service capacity and pricing.
Cheers,
Jerry
And Mr. Rabi is right about the airlines selling miles. There have been several of them recently whose only profitable business sector was the selling of miles. At one point recently, American's frequent flyer program was given a higher monetary value by Wall Street than the airline as a whole.
What this means for Hawaii is obviously a difficult environment for the tourist business, unless and until oil prices drop to something like $70. That is what some of the airlines give as the top price that they can maintain their previous levels of service capacity and pricing.
Cheers,
Jerry