Sunday, October 30, 2011
It was recently reported that airlines, including United Continental and US Airways, have made a smaller profit since the end of the third-quarter. Five of the biggest airlines have been following the "charge more and fly less" strategy ever since the jet-fuel bills peaked to $3.14 billion. Obviously, this method is not working. Profit for US Airways has dropped about 68 percent to $76 million, when just last year profit was at $240 million. the CEO of farecompare.com, Rick Seaney, told Dallas Morning News that there has been 18 attempted faire increases in 2011 thus far, only about half succeeding. When such a large business, such as an airline, and you see that your revenue is decreasing, wouldn't you want to lower the prices in hopes of making more money? Because airfare is so high, people have been flying less, taking away from Delta, US Airways, United Continental, Southwest, and Jet-Blue's income. I personally think that they would have a better chance of surviving this dilemma by lowering their prices so more people will be willing to fly with airlines. Eventually, they would be able to pay for the jet-fuel bills. If the companies are expecting lower demand like the article reads, then why not do something about it? Am I wrong for thinking this?