3 ms·
Airlines suck because it’s an undifferentiated service. Consumers aren’t willing to pay much extra for better service, and the lowest ticket price wins. It’s a
by exelius 9y ago
Airlines suck because it’s an undifferentiated service. Consumers aren’t willing to pay much extra for better service, and the lowest ticket price wins. It’s a race to the bottom on price, so features and comfort get cut in exchange for cost savings.
It’s basically a commodity industry with high capital requirements and high volatility in marginal costs. There’s a reason that most airlines globally are subsidized by governments (yes, including in the US).
Edit: and don’t forget that the airplanes themselves are heavily subsidized (Boeing and Airbus are two of the most heavily subsidized companies in the world). And even then, the industry can’t consistently make a profit over an extended period of high fuel prices.
- rconti 9y agoI've never seen a serious attempt at service differentiation other than the ones that come at 5x cost. The "quality" difference between most airlines is less than the random noise of getting staff on a good or bad day.
- mseebach 9y agoPremium economy - a better seat/legroom, but otherwise much the same service as economy (modulo sometimes free drinks or nicer food presentation). It's nowhere near universally available, but where it is, it's often available for around a 50% markup.
- mseebach 9y ago> [...] undifferentiated service [...] basically a commodity industry That's pretty much Amazon's sweet spot.
- exelius 9y agoI don't see them getting into passenger travel; the quickest way to trash your brand is to be a telecom or an airline. Low margin, undifferentiated services that consumers need, but require high capital investments... your investors will push you to grow per-seat revenue, and your customers will punish you for it (or vice versa).
- Spooky23 9y agoNo it sucks because gates are the finite resource in airlines, and deregulation combined with the government’s current view on anti-trust made it possible to monopolize the gates.