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| Monday, December 6, 2004 |
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Customers to airlines: go fork yourselves 
| | Go back in history. One of the first decisions an airline had to make was, Should we carry passengers or cargo? Whenever an airline came to that fork in the sky, they took both forks... |
| | In retrospect, it's easy to see the fallacy of an all-forks strategy. But in the short term, many of these marketing moves increased revenues and profits. It's only in the long term, and in the presence of narrowly focused competition, does an all-forks strategy fall apart. |
| | Enter Southwest, the one-fork airline. Passengers only, no cargo. Business destinations only, no vacation locations. Coach class only, no first- or business-class service. Domestic flights only, no international service. |
| | No forks on Southwest flights, either. The airline serves no food. Won't carry pets. Doesn't allow advance seating reservations or interairline baggage exchange. |
| | As a result of its one-fork strategy, Southwest Airlines can operate its system with only one type of aircraft, the Boeing 737. Delta, for example, operates six types of aircraft, not including aircraft operated by Delta Connection subsidiaries ComAir and Atlantic Southeast Airlines... |
| | In the stock market, Southwest Airlines is currently worth $12.4 billion, or more than three times as much as American, United, Delta, Northwest and Continental ... combined. |
| | So what are the all-forks airlines doing to counter the Southwest threat? Do you suppose they're getting the message that the road to success is "narrowing the focus"? |
| | Not at all. They are meeting the threat posed by Southwest (along with JetBlue and AirTran) with their usual strategy. When you reach a fork in the sky, take both forks. |
| | Should we run a full-service airline or a no-frills airline? |
| | "Let's take both forks," is their usual approach. So Delta Air Lines launches Song. And United Airlines launches Ted. |
| | And what can you say about United's idea of launching a premium service (p.s.) on its transcontinental flights? So now in addition to first, business and coach fares, United will have first p.s., business p.s. and coach p.s. fares. |
| | I can say it makes no sense, and I'm a very frequent United flyer. Here's what I want (but have never been asked about): |
| | - Clean windows
- More legroom
- A cupholder like the euro airlines have (separate from the tray table)
- Better sound for Channel 9 (the cockpit channel)
- Power for my laptop
- A net connection, via wi-fi
- The old cappucino machines back, in the Red Carpet Clubs ('cuz the new ones all deliver really sucky sugar drinks).
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| | I recently asked a Ted pilot what the difference was between Ted and other United planes, besides a paint job. He said "nothing." The flight attendant added, "More legroom for the whole cabin, no business or first class." |
| | Meanwhile, JetBlue has comfortable seats, DirecTV, good service, and (somebody told me... is it true?) Net connectivity. I've only flown JB once and liked it (comfortable, cheap, clean windows). But they're nowhere near Santa Barbara, so: not an option. |
| | I'd really like to help United, but I think they're too forked for that. |
CrossBlogFlog
All rise
| | Blogging is a major new social, political, and economic phenomenon. It is a fresh and striking exemplification of Friedrich Hayek¹s thesis that knowledge is widely distributed among people and that the challenge to society is to create mechanisms for pooling that knowledge. The powerful mechanism that was the focus of Hayek¹s work, as as of economists generally, is the price system (the market). The newest mechanism is the ³blogosphere.² There are 4 million blogs. The internet enables the instantaneous pooling (and hence correction, refinement, and amplification) of the ideas and opinions, facts and images, reportage and scholarship, generated by bloggers. |
| | We have decided to start a blog that will explore current issues of economics, law, and policy in a dialogic format. Initially we will be posting just once a week, on Mondays. In time we may post more frequently. The first postings will be tomorrow, December 6. |
| | I don't know about the rest of ya'll, but I think this blog is auspicious in the Xtreme. The world depresses me less, just knowing it's there. |
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