Broadband, Airline Industries Are Incredible Innovators -- When It Comes To Giving You Less But Claiming It's More

from the nickel-and-dime-you-to-death dept

There are certainly some similarities between the airline and broadband industries. Both are pampered, uncompetitive markets suffering from regulatory capture that allows them to literally write the laws that govern their respective business segments. Both insist that constantly skyrocketing prices are justified by an ever-improving "customer experience," while the actual customer experience continues to get worse as companies consolidate and competitors dwindle. Taking their cues from banking "innovations" in the 80s, both industries have also become obsessed with screwing over their customers via the use of increasingly sneaky fees.

This New Yorker article by neutrality godfather Tim Wu makes this rather clear, noting that the airline industry made $31 billion largely from fees in 2013, a number that's sure to have skyrocketed in 2014 as the airlines get increasingly "creative" in below-the-line charges for basic amenities that used to just be part of standard service. Some friends of mine recently rode Allegiant Air, and told me the company charged a $5 fee just to print your boarding pass on top of the usual assortment of annoying fees (it's worth noting their beverages, including water, also aren't complimentary).

While the airlines like to frame this as an increase in consumer choice (hey, you can choose to not enjoy a pillow!), Wu aptly notes how this approach to price discrimination in less competitive markets consistently results in making your customers more miserable:
"But the fee model comes with systematic costs that are not immediately obvious. Here’s the thing: in order for fees to work, there needs be something worth paying to avoid. That necessitates, at some level, a strategy that can be described as “calculated misery.” Basic service, without fees, must be sufficiently degraded in order to make people want to pay to escape it. And that’s where the suffering begins. The necessity of degrading basic service provides a partial explanation for the fact that, in the past decade, the major airlines have done what they can to make flying basic economy, particularly on longer flights, an intolerable experience."
Earlier this year, Mike had already pointed out more than a few similarities between the broadband and airline industries, and how this behavior is closely tied to the net neutrality debate. Wu doesn't even mention broadband, though both industries feature oligopolies that abuse the lack of competition to keep the bar at ankle height to cut costs, then enjoy charging consumers more if they'd like to be less miserable. The overall transaction costs (physical, mental and monetary) of such a model become absurdly high, reducing the utility of the service and incentivizing an approach where consumers have to pay to elevate themselves beyond intentionally poor or constrained service, resulting in the flying experiences most of us know and love today.

The broadband industry isn't much different (something Stacey Higginbotham pointed out recently as well). That consumers are being given amazing new levels of choice and flexibility is AT&T's justification for the company's Sponsored Data effort, which erects entirely arbitrary consumer usage caps, then charges companies an extra fee if they'd like to bypass them. Likewise, T-Mobile argues that exempting only the biggest music services from the company's usage caps delivers great benefits to the consumer (despite tilting the playing field against smaller operators). While the net neutrality conversation (and the feeble rules we've seen so far) focuses on outright blocking of websites or throttling of connections or services (even though even the worst-behaved ISPs now avoid both), the real danger at the moment is the all-too-clever efforts that constrain the user while pretending to offer greater freedom.

Like the airline industry, in regulatory conversation there's a tendency to see these efforts as simple pricing creativity, when the only creative thing about them is in convincing consumers that less is more. Without meaningful network neutrality rules (in the stark absence of real competition), we're creating a slippery slope of intentionally hamstrung services where your only option is to pay a steep premium if you'd like to be treated even remotely like a human being.

Reader Comments

Subscribe: RSS

View by: Time | Thread


  • identicon
    Anonymous Coward, 7 Jan 2015 @ 6:36am

    Frequent flyers...

    Ironically, in the airline industry, frequent flyers tend to be treated better than the average folk - receiving extra perks, etc.

    Frequent downloaders, on the other hand... not so much.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 7 Jan 2015 @ 6:41am

      Re: Frequent flyers...

      You wouldn't download an airplane...

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 7 Jan 2015 @ 6:49am

        Re: Re: Frequent flyers...

        Yes I would! I wonder how long a makerbot would need on a 747...

        reply to this | link to this | view in chronology ]

        • icon
          ltlw0lf (profile), 7 Jan 2015 @ 8:27am

          Re: Re: Re: Frequent flyers...

          Yes I would! I wonder how long a makerbot would need on a 747...

          I know MakerBot is working on metal composite printing, but I don't think I'd trust flying in a 747 made of PLA or ABS filament.

          reply to this | link to this | view in chronology ]

          • icon
            John Fenderson (profile), 7 Jan 2015 @ 9:03am

            Re: Re: Re: Re: Frequent flyers...

            An ultralight, however...

            reply to this | link to this | view in chronology ]

            • icon
              ltlw0lf (profile), 7 Jan 2015 @ 9:35am

              Re: Re: Re: Re: Re: Frequent flyers...

              An ultralight, however...

              Or even a Cessna or other single or dual engine low altitude aircraft, those things are practically made out of Tupperware now. But the forces on a 747 at 520 mph at FL40 is a little bit more than the forces on a Cessna at 220 mph at 8,000 ft.

              reply to this | link to this | view in chronology ]

          • identicon
            Guy Cocoa, 9 Jan 2015 @ 11:43am

            Re: Re: Re: Re: Frequent flyers...

            Plenty of people trust the 787 which is made out of carbon reinforced plastic.

            reply to this | link to this | view in chronology ]

            • icon
              nasch (profile), 9 Jan 2015 @ 12:07pm

              Re: Re: Re: Re: Re: Frequent flyers...

              Plenty of people trust the 787 which is made out of carbon reinforced plastic.

              Which is not the same as PLA or ABS.

              reply to this | link to this | view in chronology ]

  • icon
    Violynne (profile), 7 Jan 2015 @ 7:20am

    Throw in the food industry as well.

    Last time we went shopping, we needed a magnifying glass just to find the package under the large price increase.

    reply to this | link to this | view in chronology ]

  • identicon
    mmbleh, 7 Jan 2015 @ 7:28am

    gas prices dropping ...

    Since gas prices have dropped significantly, when will airlines reflect the gas savings to the customers? Oohhhh right they wont and pocket that as typical.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Anonymous Coward, 7 Jan 2015 @ 7:40am

      Re: gas prices dropping ...

      I think I heard that airlines buy 'futures' in either gas or oil to 'protect' their costs, so they are still paying (or paid) a different price than the current market and will not realize any savings until new 'futures' come down the pipeline.

      I bet they argue that hedging was an appropriate business strategy, for our customers.

      reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 7 Jan 2015 @ 8:35am

      Re: gas prices dropping ...

      I'm not in aviation, but I do drive for field service calls for a living. Yes gas prices have been going down, but my building lease and all insurances have been going up. The net result: my expenses are going up, and thus I cannot charge any less for service calls. And I have to compete with those companies that refuse to be properly licensed and/or obey FLSA.

      reply to this | link to this | view in chronology ]

      • icon
        John Fenderson (profile), 7 Jan 2015 @ 9:04am

        Re: Re: gas prices dropping ...

        I also don't know much about the aviation industry, but I've long heard the airlines say that their #1 business expense is fuel. That makes it a bit different than things like field service, where fuel is probably not even in the top 5.

        reply to this | link to this | view in chronology ]

  • icon
    Ninja (profile), 7 Jan 2015 @ 7:50am

    Someone posted here that the big corporation are becoming toxic to society as a whole. This is just more evidence. It seems there is a point where the size starts harming the public and yet there's nothing to be done because at this point the company has invested in regulatory capture to prevent competition so you end up stuck with these large players even if their service is shitty. Maybe it's time to split the bigger players?

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 7 Jan 2015 @ 8:16am

      Re:

      If you can find the Corporation Documentary is an eye opener and frightening to say the least.

      reply to this | link to this | view in chronology ]

    • icon
      Gwiz (profile), 7 Jan 2015 @ 8:44am

      Re:

      Maybe it's time to split the bigger players?

      While I see the appeal to such actions, I don't think it's a wise choice.

      Penalizing a corporation for being "too" successful does not foster a environment of economic growth. It would be counterproductive.

      Secondly, it wouldn't work anyways, you would just end up with a bunch of smaller companies that are still controlled by the same entities. Take for example the breakup of Ma Bell. We ended up with 5 or 6 regional companies that were all still controlled by the same stock holders. And eventually they ended up buying/merging/acquiring each other again so we are back to one company called AT&T.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Anonymous Coward, 7 Jan 2015 @ 8:57am

        Re: Re:

        This could be changed by changing the FTC's perception of competition. They now think competition is (for example) DSL vs cable internet as competing, as we well know they are not.

        Set the standard at 10, or 15, or 25 LIKE services in any one market, and the consolidation of industries will stop.

        reply to this | link to this | view in chronology ]

      • icon
        John Fenderson (profile), 7 Jan 2015 @ 9:36am

        Re: Re:

        "Penalizing a corporation for being "too" successful does not foster a environment of economic growth."

        I don't see this as penalizing anyone for being too successful. I see it as a safety mechanism to mitigate abuse and damage.

        Regardless of that, though, I disagree -- I think is does foster an environment for economic growth. One of, if not the major, the problems our economy has is that we are prioritizing the wrong kind of economic growth, where the growth comes from megacorporations at the expense of smaller businesses.

        What we really want, however, is an economy where there are a multitude of smaller businesses rather than a handful of huge ones. Smaller businesses help the economy overall to a much greater degree than large ones. Most innovation comes from small businesses. An economy that consists of thousands of business is more robust and predictable than one that consists of dozens. Small businesses are more connected to their neighbors and society than large ones, and tend to be better about being good neighbors and societal contributors. And so on.

        reply to this | link to this | view in chronology ]

        • icon
          John Fenderson (profile), 7 Jan 2015 @ 9:38am

          Re: Re: Re:

          Oops, about the Ma Bell breakup: that is an absolutely awful example, since the terms of the breakup were written by Ma Bell in such a way as to maintain the monopoly to the greatest degree possible. That is why it didn't really have the full effect that we wanted in the long term.

          reply to this | link to this | view in chronology ]

        • icon
          Gwiz (profile), 7 Jan 2015 @ 9:56am

          Re: Re: Re:

          I disagree -- I think is does foster an environment for economic growth. One of, if not the major, the problems our economy has is that we are prioritizing the wrong kind of economic growth, where the growth comes from megacorporations at the expense of smaller businesses.


          I don't disagree that most of innovation and growth does come from small businesses and that they are extremely important to our economy. But the rub is that all of those megacorporations were once small businesses too. Why would someone start a small business knowing that there is a limit to the amount of success they are allowed?

          reply to this | link to this | view in chronology ]

          • icon
            John Fenderson (profile), 7 Jan 2015 @ 10:26am

            Re: Re: Re: Re:

            "Why would someone start a small business knowing that there is a limit to the amount of success they are allowed?"

            Why wouldn't they? Seriously. If it were impossible to have a corporation so large that it can bring down an entire nation, it's hard for me to see how that would even enter into the calculus of whether or not to start a business (excepting for a minority of people who -- I would argue -- shouldn't be trusted with that much power under any circumstances).

            I know a lot of entrepreneurs along the entire success scale. I don't know a single one who would avoid starting a business if it were impossible to grow it to monster proportions.

            reply to this | link to this | view in chronology ]

            • icon
              Gwiz (profile), 7 Jan 2015 @ 11:22am

              Re: Re: Re: Re: Re:

              I don't know a single one who would avoid starting a business if it were impossible to grow it to monster proportions.

              Fair enough. But you are using the term "monster proportions", what if that arbitrary line was drawn much lower than that, would it still not enter into their equations when starting a business? It would for me. Why put sweat and equity into something that has a limit as to how much you can gain from it in the end?

              reply to this | link to this | view in chronology ]

              • icon
                John Fenderson (profile), 7 Jan 2015 @ 2:40pm

                Re: Re: Re: Re: Re: Re:

                The type of limitation I think there's a strong argument for is pretty much "monster proportions". Large enough to seriously affect the US economy.

                "Why put sweat and equity into something that has a limit as to how much you can gain from it in the end?"

                Regardless of legislative action, there is always a limit as to how much you can gain from any venture anyway. So the actual question at issue is not a yes or no one, but a scale: at what limit would you think a venture was not worth it? I pretty much guarantee that no two people would have the same answer to that.

                I think, however, that there is no valid argument for having a limit that is so low that you or I are likely to ever hit it. The limit would be very high, as I started this comment saying. Limits that high are (approximately) never going to be encountered by any individual. They can only be achieved by corporations.

                reply to this | link to this | view in chronology ]

        • icon
          Gwiz (profile), 8 Jan 2015 @ 2:27pm

          Re: Re: Re:

          Small businesses are more connected to their neighbors and society than large ones, and tend to be better about being good neighbors and societal contributors. And so on.

          I just noticed this while re-reading this thread.

          Not so sure that's really true. I sell signs and a lot of those signs are for charity organizations and you know what names appear as sponsors more often then the others? The ones from the companies around here that our government has already declared "too big to fail" and handed bailout money to.

          reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 7 Jan 2015 @ 10:08am

        Re: Re:

        Penalizing a corporation for being "too" successful does not foster a environment of economic growth. It would be counterproductive.

        There is successful, and there is excessive profit and.or concentration of money. When a business owner has more income from dividends that they can spend, all they can do with their money is buy more businesses, and grow to the extent that they become too big to fail. Being too big to fail just means that they have control of a sufficiently large slice of the economy that they can demand the government, that is the tax payer, bails them out if their business get into trouble.

        reply to this | link to this | view in chronology ]

        • icon
          Gwiz (profile), 7 Jan 2015 @ 10:36am

          Re: Re: Re:

          There is successful, and there is excessive profit and.or concentration of money.

          Still, that's an arbitrary threshold. How do you quantify "excessive profit"?


          When a business owner has more income from dividends that they can spend, all they can do with their money is buy more businesses, and grow to the extent that they become too big to fail.

          Well, to be honest, I've never bought into the "too big fail" nonsense and I live in the Detroit area. GM and Chrysler should not have received that bailout money, in my opinion, even though it would have hurt my local economy for a bit. Some other company and/or business would have stepped in and hired up the excess skilled workers in no time.

          And just so you know, I do believe that companies engaging in monopolistic behavior should be curtailed. Competition fosters growth. I just don't see how capping success, just because a company reaches a certain size or worth, is helpful.

          reply to this | link to this | view in chronology ]

          • icon
            John Fenderson (profile), 7 Jan 2015 @ 11:19am

            Re: Re: Re: Re:

            "I just don't see how capping success, just because a company reaches a certain size or worth, is helpful."

            It's helpful because in our society money is very real power. If you accumulate enough of it, your power exceeds that of the government. At that point, the government (and therefore the citizens and nation) itself is at risk. There is a point at which the accumulation of wealth itself becomes a real danger to everyone else.

            reply to this | link to this | view in chronology ]

            • icon
              Gwiz (profile), 7 Jan 2015 @ 11:30am

              Re: Re: Re: Re: Re:

              There is a point at which the accumulation of wealth itself becomes a real danger to everyone else.

              I see your point here, but still fail to see how one country limiting the size of corporations would help. We live in a truly global economy these days. It would just mean that huge foreign corporations would have the upper hand over American companies and more control of our government.

              reply to this | link to this | view in chronology ]

              • icon
                John Fenderson (profile), 7 Jan 2015 @ 2:43pm

                Re: Re: Re: Re: Re: Re:

                "We live in a truly global economy these days."

                People say this as if it is both inevitable and means that we have no actual control over the extent or way in which it happens. I think that both of those things are untrue.

                "It would just mean that huge foreign corporations would have the upper hand over American companies and more control of our government."

                I don't see how that follows at all. Corporations would have exactly as much control as they do now: the precise amount that we (as a nation) allow them to have.

                reply to this | link to this | view in chronology ]

                • icon
                  Gwiz (profile), 7 Jan 2015 @ 5:16pm

                  Re: Re: Re: Re: Re: Re: Re:

                  People say this as if it is both inevitable and means that we have no actual control over the extent or way in which it happens. I think that both of those things are untrue.

                  Well, I believe it's already a fact and what I was trying to convey was that since the laws of our nation only apply to our nation, we would only be curtailing our corporations, not those of other countries, giving us the disadvantage overall.

                  reply to this | link to this | view in chronology ]

      • icon
        Mason Wheeler (profile), 7 Jan 2015 @ 3:19pm

        Re: Re:

        Penalizing a corporation for being "too" successful does not foster a environment of economic growth. It would be counterproductive.

        Please avoid ridiculous corporatist tropes like "penalizing success" if you want your arguments to be taken seriously. "Penalizing success" is a Libertarian strawman designed to provoke a knee-jerk reaction that distracts people's attention from the real issue.

        No (sane) person believes in a policy of penalizing success. What is a good policy, however, is penalizing abuse of power. Since an organization has to be successful to a certain degree in order to gain enough power to become abusive toward society in general, it's easy to accidentally conflate the two, especially if a malicious actor with an agenda has already deliberately conflated the two to try to confuse you.

        reply to this | link to this | view in chronology ]

        • icon
          Gwiz (profile), 7 Jan 2015 @ 5:03pm

          Re: Re: Re:

          Please avoid ridiculous corporatist tropes like "penalizing success" if you want your arguments to be taken seriously. "Penalizing success" is a Libertarian strawman designed to provoke a knee-jerk reaction that distracts people's attention from the real issue.

          I'm not using "penalizing success" for any other reason than that's how it boils down in my mind at the moment and I don't really care what labels you attach to the phrase. If you have a more preferred descriptive term for penalizing a corporation only because it has become to large or too profitable, then please share.

          reply to this | link to this | view in chronology ]

          • icon
            Mason Wheeler (profile), 8 Jan 2015 @ 1:57pm

            Re: Re: Re: Re:

            Again, the basic concept is invalid. What you describe (penalizing a corporation only because it has become to large or too profitable) is "penalizing success," and nobody actually believes in doing that.

            What people do believe in is penalizing abuse, and simply because a corporation has to become successful before having enough power to get away with being abusive still doesn't turn that into penalizing success.

            reply to this | link to this | view in chronology ]

            • icon
              Gwiz (profile), 8 Jan 2015 @ 2:21pm

              Re: Re: Re: Re: Re:

              .... and nobody actually believes in doing that.

              You keep saying that and I don't believe you are correct. I've had plenty of discussions with people right here on Techdirt who do actually believe we need to keep corporations from getting "too big" (well, to be fair, one of them was OOTB and he doesn't count much). I'll bet you a dollar that if you asked that question at an "Occupy Wallstreet" rally you would find plenty of people advocating just that.


              What people do believe in is penalizing abuse, and simply because a corporation has to become successful before having enough power to get away with being abusive still doesn't turn that into penalizing success.

              I have no problem curtailing corporations that are abusing their power. I have a problem with setting some arbitrary limit to a corporation's size just to keep them from getting too big.

              reply to this | link to this | view in chronology ]

              • icon
                nasch (profile), 8 Jan 2015 @ 2:29pm

                Re: Re: Re: Re: Re: Re:

                I've had plenty of discussions with people right here on Techdirt who do actually believe we need to keep corporations from getting "too big" (well, to be fair, one of them was OOTB and he doesn't count much). I'll bet you a dollar that if you asked that question at an "Occupy Wallstreet" rally you would find plenty of people advocating just that.

                I think there's some merit to that position. I think there is such a thing as too big to fail - that is, a company is so big and powerful that its failure would be a disaster for the economy. So we have three options: 1) accept the disaster, 2) bail out companies that get that big and fail or 3) don't let companies get that big. What we've done so far, number 2, strikes me as clearly the worst option of the three (except of course for the very wealthy who control such corporations, which is why we do it that way). I think number three might be the best option, but it's not easy to implement well. Perhaps a hybrid of 2 and 3 might be workable: part of any too big to fail bailout includes breaking up the company into much smaller pieces.

                reply to this | link to this | view in chronology ]

                • icon
                  tqk (profile), 8 Jan 2015 @ 4:36pm

                  Re: Re: Re: Re: Re: Re: Re:

                  When the feces hit the rotational air movement device, there were quite a few people, usually of the Austrian School of Economics persuasion, who were rooting for option 1. Their argument was that it would be the quickest and most effective way to implement your hybrid of 2 and 3. They'd collapse, their assets would be sold off for whatever could be got for them, and perhaps their shareholders might learn an important lesson from the debacle. It might even have led to some of the most egregious offenders getting a nice orange jumpsuit and free room and board for a few years.

                  Instead, the taxpayers paid for their greed, the world's economies were shot in the head, some of the bums failed upward into cushy gov't positions, and the rest went back to doing pretty much what they'd been doing prior to the bailout.

                  reply to this | link to this | view in chronology ]

                • icon
                  Gwiz (profile), 8 Jan 2015 @ 4:40pm

                  Re: Re: Re: Re: Re: Re: Re:

                  Perhaps a hybrid of 2 and 3 might be workable: part of any too big to fail bailout includes breaking up the company into much smaller pieces.


                  That's definitely some food for thought.

                  I'm still not 100% convinced that "too big to fail" is really such a concern, but I've never studied economics that deeply, so I really don't know.

                  reply to this | link to this | view in chronology ]

    • icon
      blah (profile), 9 Jan 2015 @ 6:56pm

      Re:

      Not split... eliminate. Corporations should go back to pre-1855 rules. Let's start by overturning Santa Clara County v. Southern Pacific Railroad and every single case that uses it as a precedent.

      reply to this | link to this | view in chronology ]

      • icon
        nasch (profile), 9 Jan 2015 @ 7:08pm

        Re: Re:

        Sounds like the decision itself is not the problem:

        "Many people (rightfully) are outraged that a Court reporter could turn the Bill of Rights and 14th Amendment on their heads, which effectively is what occured once Santa Clara was cited as precedent in subsequent cases."

        A court reporter inaccurately reported on the finding, and somehow courts used that, rather than the actual decision itself, as precedent. I'm curious how that happens - why would anything other than the actual written verdict be usable as precedent?

        reply to this | link to this | view in chronology ]

  • icon
    Christopher (profile), 7 Jan 2015 @ 8:52am

    None of this explains...

    ... why JetBlue is now constricting seats and introducing fees for bags. JetBlue isn't intentionally trying to make lives miserable, but their shareholders will take away their capital if they don't. Can JetBlue tell them to GFY? Sure, but it won't be long before an activist shareholder pulls a stunt to force JetBlue's compliance.

    The 1% are immune to these things, of course, which is why they are always implemented by them.

    reply to this | link to this | view in chronology ]

    • icon
      John Fenderson (profile), 7 Jan 2015 @ 10:28am

      Re: None of this explains...

      "JetBlue isn't intentionally trying to make lives miserable"

      So their reduction of seating space and increasing of fees are accidental, then?

      reply to this | link to this | view in chronology ]

      • icon
        tqk (profile), 7 Jan 2015 @ 4:18pm

        Re: Re: None of this explains...

        So their reduction of seating space and increasing of fees are accidental, then?

        Incidental (tangential, orthogonal), perhaps. Businesses are supposed to minimize cost and maximize profit. It would be nice if they'd factor in making the experience enjoyable for their customers in order to make them want to come back, but budget airlines assume you won't care about that as much as getting inexpensive service. Vote with your feet if that's not you.

        reply to this | link to this | view in chronology ]

  • icon
    tqk (profile), 7 Jan 2015 @ 9:22am

    Captive market!

    ... (it's worth noting their beverages, including water, also aren't complimentary).

    Oh, *sweet*, considering those are confiscated as potential WMDs prior to boarding.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 7 Jan 2015 @ 10:14am

      Re: Captive market!

      Well, prior to TSA security...

      You can still obtain water after going through security, but prior to boarding - although in most cases you're stuck with either buying expensive bottled water, or using a water fountain to fill up an empty container (which you brought with you right?).

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 7 Jan 2015 @ 12:36pm

    Off course they give you more

    Off course they give you more, and they are entirely open about it:

    More choices.

    reply to this | link to this | view in chronology ]

  • identicon
    k-h, 7 Jan 2015 @ 2:04pm

    Sounds like the cellphone industry too

    Free calls between 7pm and 9pm, double rates between 5pm and 6pm, half price calls to five numbers of your choice, 1Gb data offpeak, 2Gb data free from nominated Music industry sites, etc, etc.

    reply to this | link to this | view in chronology ]

  • icon
    Groaker (profile), 7 Jan 2015 @ 3:30pm

    It is not just overt price, but availability. At the present time there is a critical shortage of normal saline and Ringer's lactate solution. This outrageous situation is expected to last for at least another year. How many people are going to die because pharmaceutical companies can't, or rather won't, make up sterile IV bags with 0.85% sodium chloride?

    Really tough to follow a well and long known script to make sure there are no contaminants, and that the solution is sterile.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 7 Jan 2015 @ 6:13pm

    I am surprised they don't add in fees for breathing their air, or for the wear and tear on the airline seats, and pavement on their grounds

    reply to this | link to this | view in chronology ]

  • icon
    nasch (profile), 8 Jan 2015 @ 11:42am

    Demand

    It seems like this is what the airlines' customers are asking for: the cheapest possible flights. And I don't blame them, flying is expensive. Meals used to be included and now I don't buy meals on a flight unless it's a really long one. If my ticket is $10 cheaper, I'm fine with it - I can eat in the airport for less than that, and better food. I'm guessing people of average height wouldn't mind a little less leg room for a cheaper ticket, and so on.

    reply to this | link to this | view in chronology ]

  • identicon
    BW, 9 Jan 2015 @ 10:36am

    "Both are pampered, uncompetitive markets suffering from regulatory capture that allows them to literally write the laws that govern their respective business segments. "

    You do know that the airline industry was deregulated in the 70s, right? And that it is so highly competitive that margins (when there's any profit at all) are in the 1-2% range?

    reply to this | link to this | view in chronology ]

    • identicon
      Harun, 9 Jan 2015 @ 10:52am

      Re:

      Its ironic that many people now think the government can come in and make these companies behave better.

      The best stick to make companies improve is consumer choice: don't fly airlines that do this stuff. Or complain.

      reply to this | link to this | view in chronology ]

    • icon
      nasch (profile), 9 Jan 2015 @ 12:05pm

      Re:

      And that it is so highly competitive that margins (when there's any profit at all) are in the 1-2% range?

      I was thinking - aren't most of the airlines constantly on the verge of bankruptcy? Doesn't seem very pampered.

      reply to this | link to this | view in chronology ]

  • identicon
    Walt, 9 Jan 2015 @ 12:13pm

    Competition can provide efficiency and innovation. It can also end in a "race to the bottom" sacrificing quality in exchange for survival.

    reply to this | link to this | view in chronology ]

    • icon
      nasch (profile), 9 Jan 2015 @ 12:34pm

      Re:

      Competition can provide efficiency and innovation. It can also end in a "race to the bottom" sacrificing quality in exchange for survival.

      You think high quality goods and services is likely without competition?

      "The effect of monopoly generally is to make articles scarce, to make them dear*, and to make them bad."

      -Thomas McCaulay

      * meaning expensive

      reply to this | link to this | view in chronology ]

  • identicon
    J1, 9 Jan 2015 @ 2:55pm

    The Price of Flying

    Skyrocketing prices? I can't speak for the broadband business, but you need to take a look at the price of flying in years past and consider getting in touch with reality. There isn't a service industry product that even approaches the price reductions air travel has seen. I find fees annoying too, but the idea that the cost of flying has increased over time, much less "skyrocketed", is crazy.

    http://www.theatlantic.com/business/archive/2013/02/how-airline-ticket-prices-fell-50-in-30-years-an d-why-nobody-noticed/273506/

    reply to this | link to this | view in chronology ]

  • identicon
    Oliver Heaviside, 9 Jan 2015 @ 5:22pm

    airline fees

    It's not too surprising. Now that we all use Priceline, Half, Expedia, etc, and chase the absolute lowest price no matter what, we get the absolute lowest cost product, often at loss-leader prices, and then fees to actually make a profit. In other industries (e.g. grocery retailing) this is old news.

    Not that I like it much, but I am not surprised.

    FWIW, the airlines are working on a sort of saddle-seat for passengers, You're not standing, exactly, but your body is mostly vertical. Thus, more rows per plane. I have mixed emotions about this, but if it keeps the a-hole in front of me from reclining into my knees, it might be worth it.

    A note on fuel prices: some airlines do hedge fuel prices, but I believe mostly not. Why? Because while a spike hurts them, it hurts their competition, too.

    reply to this | link to this | view in chronology ]

    • icon
      nasch (profile), 9 Jan 2015 @ 7:02pm

      Re: airline fees

      FWIW, the airlines are working on a sort of saddle-seat for passengers,

      IIRC there was a patent application for that - is someone actively working on putting it into planes?

      Because while a spike hurts them, it hurts their competition, too.

      But if they're insulated from the spike and their competition is not, they get a competitive advantage. I think most airlines hedge some of their fuel purchases much of the time. Is that enough weasel words? ;-)

      reply to this | link to this | view in chronology ]

  • identicon
    curmudgeoninchief, 9 Jan 2015 @ 7:23pm

    Go Southwest, Young Man

    Doesn't really apply to Southwest. Still a major strategic advantage Southwest obtained by not charging for checked bags. Southwest basic service is perfectly adequate with low misery. The other airlines are addicted to bag fees etc. and have a hard time competing when Southwest wants to enter a market.

    reply to this | link to this | view in chronology ]


Add Your Comment

Have a Techdirt Account? Sign in now. Want one? Register here
Get Techdirt’s Daily Email
Use markdown for basic formatting. HTML is no longer supported.
  Save me a cookie
Follow Techdirt
Techdirt Gear
Shop Now: Techdirt Logo Gear
Advertisement
Report this ad  |  Hide Techdirt ads
Essential Reading
Techdirt Deals
Report this ad  |  Hide Techdirt ads
Techdirt Insider Chat
Advertisement
Report this ad  |  Hide Techdirt ads
Recent Stories
Advertisement
Report this ad  |  Hide Techdirt ads

Close

Email This

This feature is only available to registered users. Register or sign in to use it.