|
Another thing that is unspoken here is how the newfound ease of comparing prices among airlines is forcing them to put more and more fees into "extras" that don't show up on the Expedia bottom line.
I imagine that the psychological impact of being the "cheapest" ticket on the list is pretty huge--even if everyone knows that you will nickle and dime your way to being more expensive at the end of the day.
A couple of years ago, I read an article with an interestingly honest take from executives at hotel chains about how the internet had really cut into their bottom line. Basically, hotels made their money, in large part, by charging more than the market rate for rooms. They relied on the fact that consumers either had to call around for rates (too lazy to do) or go through travel agents (easy for hotels to control) to get people paying more for a, say, Holiday Inn room, when they could have had the same room for $100 less at the Hilton two block away.
Because the internet had taken that away from them, they had to be more creative in making a profit.
I am sure that it is the same for the airlines. Increasing the spread between your "Expedia price" and what you will actually make from the seat has to be one of their top goals.
|