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Strategies & Market Trends : ahhaha's ahs -- Ignore unavailable to you. Want to Upgrade?

To: M. Frank Greiffenstein who wrote (2881)	9/17/2001 11:31:05 PM
From: Ahda	Read Replies (1) \| Respond to of 24758

Whoever would of thought we are going to see increased inflation in wages on one end and a recession at the other on corporate profits an intelligence way beyond my own.

To: M. Frank Greiffenstein who wrote (2881)	9/18/2001 12:07:25 AM
From: ahhaha	Respond to of 24758

Poor management. The airline companies needed to raise air fares at least 50%, probably 100%. As one of them raised fares their share and revenue miles would fall, but their net income would rise. The trade-off in revenue loss to income gain doesn't inflect until at least 50% increase is reached due to price inelasticity of demand. As other carriers join the rate increase the share reapportionment diminishes. Carriers like LUV wouldn't hold out on the fare rise. They might not take it up as much, but the result to all carrier share would be about the same. The problem is that the US government would sue any airline raising rates calling it "price gouging". And there is no management which could even comprehend the idea of raising prices just like they couldn't comprehend long ago reducing them to get competitive. Thus you have an attitudinal, psychological, and legal block to making the airlines viable regardless of all exogenous factors like oil price and security. In fact, these latter two could be absorbed under just about any scenario without duress under substantial fare increase. So necessarily that's what will happen unless Bush gets Democratted like his old man and goes along in compromise with the Democrat plan to bail-out the airlines.