Gerard M Foley wrote: > Don't know if I've said this before here. If so, I apologize. > > It is quite possible that air passenger transportation in the U.S. may > go the way of all other forms of public transportation - subsidy or quit. > > The automobile is a fierce competitor. Although its actual costs are > quite high, a major part of the cost is the initial purchase. Once > the car is bought, it is very difficult to convince the owner not to > use it. > > The result is that the public transportation facility, rail, bus, > subway, and maybe airline too, finds that there is no fare point at > which costs can be recovered. Drop the fare and the added volume > costs more than the added income. Raise the fare and the reduced > volume won't pay the fixed costs. The public always has two other > options - drive or stay home. > > Gerry Excellent points, Gerry. Indeed, Southwest is fully cognizant that its pricing affects the modal split between private and public ground transport and travel by air. This is one of the reasons they only reluctantly raise fares by $2-4 each-way, when network carriers file for $20 increases. Fundamentally different views of price elasticity and as a result, approaches to pricing. - Bob Mann -- R.W. Mann & Company, Inc. >> Airline Industry Analysis Port Washington, NY 11050 >> tel 516-944-0900, fax -7280 mailto:info@xxxxxxxxxx >> URL http://www.RWMann.com/ This e-mail is for the designated recipient only and may contain privileged or confidential information. If you have received it in error, please notify the above sender immediately then delete the original e-mail. Any other use of this e-mail is prohibited.