It's not only product and price differentiation for seats that are basically the same and do not differ greatly in costs (business class seats take up more space), product differentiation in the airline business is also taking another direction. When my wife flew to New Brunswick recently, she didn't fly Air Canada, she flew on its subsidiary "Jazz". When I flew out to Calgary recently, I flew Air Canada's "Tango" (terrible way to treat a consultant!!). Air Canada will soon initiate (or already has) "ZIP" for short hauls in western Canada, "Jetz" for sports charters, and probably "Elite" as an all-business class airline.
In the current issue of the Globe and Mail's Report on Business, Robert Milton, the CEO of Air Canada is lauded for breaking up his airline. The purpose? To provide meaningful chunks to specific markets. And if those markets change, you can always repaint the plane. Ed Ed Weick 577 Melbourne Ave. Ottawa, ON, K2A 1W7 Canada Phone (613) 728 4630 Fax (613) 728 9382 ----- Original Message ----- > > Re: dynamic pricing of airline seats. It is the reality of maximizing > revenue. From economics 101 it is a way of getting all that space under the > demand curve, not just one price. But many prices, all the prices that > buyers would be willing to pay. A way of capturing the consumer's surplus. > It will be coming to most markets where the product is time defined, where > marginal cost is zero, and where people are willing to pay a wide range of > prices for the product. > > arthur > > > Ray Evans Harrell wrote: > [snip] > > Indians prize family and loyalty above saving a few pennies for > > gas. > [snip] > > I believe (until proven otherwise...) that most of the > damage The Invisible Hand does to us is the result of > it trying to squeeze the last little bit of blood > out of each of us turnips -- i.e., that the road to > hell is paved with the logic of pursuing the > lowest price (lowest wage, etc.), as opposed to > a fair price (wage, etc.). > > But in a world in which all human relations have been > reduced to exchange relations, doesn't is sound > pathetic for someone to say: "Buy my nuclear power > plant even though is costs $100,000,001 instead > of my competitor's plant which costs > $100,000,000, because mine is built by > people who care about their work whereas my > comptetitor's is built by people who > cower in fear that they will lose their job > if they don't work mandatory voluntary > overtime to show their good attitude? > > To let such considerations affect the > procurement process leads in the long run to total > disorientation and inability to function, > since if we are irrational about $1, the next > thing we know we may be irrational about $2, > then $4 (it's called "The Domino Theory").... > And the next thing you know, workers might > start demanding better working conditions because > they don't know their place any more.... > > I remember a time, back around 1973, when > air fares were pretty much proportionate to > distance travelled. The company I worked for > was already modernizing, however: They stopped > sending non-executive employees first class > *after* I had been sent on a couple business > trips under the old policy. The first time > I was sent coach class, I remember I decided to > pay the difference myself. It was a trip > from Detroit to Baltimore. The difference was > $9. Yes, I know, $9 was a small fortune > in those days, equivalent to the diffence > between one passenger paying $200 and the passenger > in the next seat having paid $600 (if not $1,200), > today. But there is a difference: The difference > in price back they was based on a difference > in what you got for your money. Today the > difference is based on the highest price a computer > program figures out each seat can > be sold for, even though what the money buys > in all cases -- from the $200 to the $1,200 -- is > the same. As we saw at the beginning, > this is Universal Reason Manifesting Itself in > World History, because each of us > pays the lowest price for everything > (even that $1,200 seat where we squeeze next to > the dude who bought an identical seat for > $200 because he bought his seat a few hours > earlier or later).... > > Who says that our Emperor Dubya I's new clothes are > not opaque (--I meant: Made by the lowest cost > producer)? > > \brad mccormick > > -- > Let your light so shine before men, > that they may see your good works.... (Matt 5:16) > > Prove all things; hold fast that which is good. (1 Thes 5:21) > > <![%THINK;[SGML+APL]]> Brad McCormick, Ed.D. / [EMAIL PROTECTED] > ----------------------------------------------------------------- > Visit my website ==> http://www.users.cloud9.net/~bradmcc/
