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So let me get this straight: airlines, for all their pseudo-efficiencies, cannot make a profit (since they really aren't efficient) so they rely on ground conce
by sbuttgereit 11y ago
So let me get this straight: airlines, for all their pseudo-efficiencies, cannot make a profit (since they really aren't efficient) so they rely on ground concessions. But to my knowledge airlines don't really participate in the ground concession profit stream... airports do, but not airlines. Yet, all these inefficient, unprofitable airlines care about is moving currency around quickly. All of this is spite of the customers. And this is Capitalism.
Sorry to say I have to disagree. Not only is the appeal to chasing dollars in the last part of your argument contradictory with the loss statement of your first point, the behaviors of customers and the role of competition under Capitalism is completely ignored or misunderstood.
Under Capitalism, trades are voluntary. If the common customer were not receiving sufficient value for their travel dollar, they wouldn't be spending it on air travel. It's true, I would love to have one of those Emirates private rooms on every airline trip I take, but even a cramped little chair across country is often sufficient... when it's not I upgrade. Sometimes that trade isn't worth it: if I'm travelling between the Bay Area and Los Angeles, I'll usually drive because of the security hassle, though the cramped seats don't help the airlines either. Mind you, efficiency likely does require that I settle for the sufficient rather than the desirable... at least to keep things at a price I am willing to pay.
If the current system is not sufficient, under Capitalism a few things can happen. Airlines can go bankrupt if they don't attract customers or fail to keep costs reasonably below revenue. If you see an industry where the entrenched players are old, inefficient, and failing to genuinely meet customer needs, hell that sounds like a golden opportunity! Why not create an airline that is efficient and caters to the common customer and take advantage of the vacuum? If a record label executive can do it why not some of the YC crowd? I thought this group was about entrepreneurial disruption! That is the Capitalist solution to marketplace inefficiency and it happens all the time. So I have to reject your premise about what Capitalism is or is not about: your statement just doesn't make sense nor does it bear up under study of the facts.
I suspect that the reason the airline industry is so apparently FUBAR is because it's not so easy to achieve that ideal you envision for it, at least not without stealing money from some people to subsidize the travel of others.
- SilasX 11y ago>But to my knowledge airlines don't really participate in the ground concession profit stream... airports do, but not airlines They don't participate directly, but they're still economically coupled the concessions (and various other surcharges like for taxis): to the extent that airports can charge extra for frills, they don't have to charge for the landing spots. The ability to do so may be what makes them viable (that landing charges + surcharges can cover operating costs).
- sbuttgereit 11y agoIt's a fair point. Do you know of any instances where landing fees have been abated by airport concessions? True, you might simply not see as steep of a rise, etc. (hard to see evidence of an offset) but it would be more in line if the airport simply took what they could get from both sides rather than seeing it as sort of a zero sum offset.