Friday, November 03, 2006

Economics 101?

I admit I know nothing about economics, and I never tried to. I can't even apply basic economics to my bank account, let alone try to understand why large companies miss their targets.

But it always comes to me as a surprise when big airlines miss their targets by some small amounts, such as BA's 200 Million USD "miss". As I said, I'm not an economist, and I never tried to. I only can't understand.

A few years ago, let's lay 10 years ago, very often I'd fly anywhere on a half-empty plane. I could choose my seat, lie down and use 3 seats for my legs, have a decent half-meal, enjoy a good glass of wine, and all this was included in my ticket fare, which would be about 2 thirds of what I am paying today.

Now it's impossible to find a plane which isn't in overbooking already, you must pay for wine in most flights, all you get to eat (IF you get free food) is some lousy cheese sandwich, and, to top it all, companies loose more money than before.

What's wrong with this picture? I'd say that it doesn't take an economist to see that something about the whole business model is wrong, but I'll leave that to the experts...

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