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Business 101

I can't believe the airline industry is losing money. They have a product that 90% of the world has to have at some point. If you count the fact that most of the air cargo shipped in the United States moves in the cargo hold of commercial airliners that number probably climbs even further.

How is it that an industry that we are so dependant upon be losing money? It is simple. They have no idea how to price what they do. Their pricing should not be as difficult as they make it. Figure the cost of a seat on the plan, tack on your markup and sell it. I understand that there are other things that play in to that price, such as fuel costs and how much cargo is on the aircraft, but their pricing should not be that bad.

Take, for instance, the following scenario. I am traveling on business to Indianapolis tomorrow. I am flying from Kansas City to Saint Louis and then on to Indianapolis. One of my business partners lives in Saint Louis and will be traveling to Indianapolis as well. My flight was $385. His flight, leaving from Saint Louis on the same plane as I am on, was $860. How does that work? It makes no sense to me at all. A one-way ticket from Saint Louis to Kansas City is $110. So, he is flying to Kansas City to take the same flight as I am. Flying further for around $400 less that it would have been to fly only from Saint Louis.

I guess the biggest thing that pisses me off about all of this is that, after 9/11/2001, the government had to bail the airlines out with grants and low interest loans. I know that these industries are very important to the overall economy, but it looks to me like part of their problem is their own fault.

"The price is what you pay; the value is what you receive." - Author Unknown