jake's mom


Free Travel

It seems as if American airlines are starting to figure things out - lower costs will translate into higher competitiveness. Exhibit 1 - NWA is now charging for extra legroom. As a tall person, this is annoying, but it makes sense, from a purely fiscal standpoint. If you want something nicer than the common experience, you should have to pay for it. It's all about equating costs with benefits.

However, the one thing American airlines HAVE NOT figured out is that lower costs should translate into LOWER FARES. Traveling in Europe this past summer certainly illustrated this point, as you can fly from country to country for prices cheaper than Southwest's lowest fares.

But the most genius idea I've seen so far is to offer completely free flights. No kidding.

Michael O'Leary, Chief Executive of Ireland's Ryanair, Europe's most profitable airline, wants to make air travel free. Not free as in free from regulation, but free as in zero cost. By the end of the decade, he promises, "more than half of our passengers will fly free."

The remarkable thing is, few analysts think his prediction is far-fetched: Ryanair already offers free fares to a quarter of its customers.

This company is able to do it via offering advertising space on planes, cutting frivolous extras, and creating more profitable websites (hint: ads and partner affiliations). And the company is raking in tremendous amounts of cash. Don't get me wrong, I don't want our airlines running so cheaply that plane maintenance is ignored, in fact I want quite the contrary. But when I am essentially forced to pay for some other guy bringing loads and loads of luggage on the flight and his getting six free coffees and several newspapers, I've had enough. Link costs with revenues...it simply makes sense.
posted by brian at 4:02 PM | Permalink

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