Airline execs are idiots

In the news this week, Northwest and Delta Airlines are at risk of bankruptcy. Same story as usual: it’s all the fault of unions and fuel prices and low cost carriers.

What about the stupid airline executives? Does any airline executive understand basic economics? Your planes are flying full, yet you’re still losing millions every day! This means you’re charging too little. If you raise prices by just 10%, most of you would be profitable again. You don’t all offer the same product — some airlines offer better connections, more convenient flight times, etc. People are willing to pay a small premium for that.

FedEx and UPS run large airlines. They have high fuel costs and unions. And DHL is expanding. But they’re in no danger.

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