Last Updated Aug 4, 2008 10:21 AM EDT
Take a look at this post in Sky Talk talking about American's pilot union's assertion that fuel price isn't the problem right now. The problem is just that fares are too low. What's their proof? They found an ad from 1932 showing coast-to-coast fares for $155. Then they went to Travelocity and found a current fare for $146 (which I should note probably is too low, and I'm guessing is an outlier). Clearly, the airline should just raise fares and everyone will be happy, right? In their words,
Are we advocating $2,000 ticket prices? Absolutely not. But to strengthen the resolve of those few members who tend to believe management's financial "crying wolf," it is important to remember our compensation restoration would cost about half a cent per revenue seat mile â€" that's only $5 for a 1,000-mile flight.Ok, hold on a minute here. It sounds so small, right? But let's look at the numbers. I'm not sure what they mean by "revenue seat mile" but I'll assume it's an RPM, revenue passenger mile. If they're talking about ASMs (available seat miles), the costs will be even higher.
In the 2nd quarter of this year, American flew 34,399,000,000 RPMs. So, half a cent for each RPM, huh? That'll be just shy of $172 million for a single quarter. Chump change, right?
The thing that's really just amazing here is that the laws of supply and demand show that when fares go up, demand goes down. So, what happens when demand goes down? The pilots lose their jobs. So it's astoundingly hilarious that the same day I saw this post, the union put out a release that states in the title that, "We Are Committed to Using Legal Methods for Mitigating Pilot Furloughs."
Ok, so fares need to go up, but we can't lose any jobs. If they can figure out how to make that happen, someone should give them the keys to the revenue management department, because I find that to be just about impossible. This isn't as easy as they'd like to make it out to be. I understand this whole effort is probably for public consumption, but I don't think this is going to get them the sympathy they're hoping to find.