Airline Economics

As an economist, I read up on a lot of cases whereby the simple matter of changing one factor could either help make or break a business. For example, there is a famous case in the airline industry whereby the caterer who provided the meals was asked to remove the olive from the pre-packaged salads. As a result, cost savings of several thousand were saved per flight and multiplied over the entire business, this meant that the cost to the airline was reduced tremendously and as a result, the airline began turning a tidy profit. As a result, many airlines have sought ways over the years to reduce the cost to the airline while increasing the profit to themselves and keeping the passengers at least moderately happy.

A couple of years ago this led to the advent of airlines that offered a minimum of services to passengers while helping getting them from point A to point B at a minimum of cost. Southwest Airlines was among the first of the no-frills airlines. With a very laid back and friendly attitude, the crews of Southwest provide the minimum of refinements while taking you where we need to go. These days you're lucky if you get your mini snack bag and drink before it's time to start fending for yourself. Gone are the days where passengers complained about stale nuts as in the movie "Airport", the many allergy sufferers out there complained and we've been heard. As a result, no more peanuts.

But I can't help but wonder if perhaps this decision was motivated more from an economical standpoint too. I mean after all, pretzels last a lot longer than peanuts too. Now if they can figure out how to limit the grains of salt, then perhaps we'll be on to something big here. Travel anywhere domestically these days and if you're looking for something to eat in air, you will be out of luck in terms of complimentary meals. Nothing big will be coming your way, and if you do want something big, you should be ready to shell out for it. A snack box, something akin to a kids meal in most fast food restaurants, is available to you for about the cost of an adult combo meal in the same fast food restaurant. And with security restrictions these days, you'll be lucky to get that jumbo soda through security.

In the face of rising fuel costs here and around the world, the airline industry is always on the lookout for ways and places to save money. Whether this is by reducing weight allowances on airlines or cutting back on the number of meals they carry, there is always some new way. An airline in China has hit on something new that worries me. According to reports, the airline has calculated approximately how much fuel is burned everytime a toilet is flushed on one of their planes. The way they figure it is if they can reduce the number of trips to the loo the passengers make then the cost to the airline will be further reduced! I guess those domestic flights are going to be a little more uncomfortable. Perhaps those air sickness bags will begin to double for something else. I guess in a way it's a good thing we can carry liquids onto flights anymore. Soon enough we may begin wishing we didn't drink so much. Then again, that bottle could come in handy!