In looking at the question of air fares over time, two articles popped up that provided an interesting compare and contrast in how different people see the same thing.
How Airline Ticket Prices Fell 50% in 30 Years (and Why Nobody Noticed) by Derek Thompson 2/28/2013. — “ there was simple reason why flying was absurdly expensive. That was the law.”
Don’t believe the airfare spin: Cost to travel is sky high by Joe Brancatelli 5/8/2014 — “The real price of flying has risen sharply since the dawn of deregulation and far outpaces the inflation rate of the last 40 years.”
That makes it clear that the divergence of views is about markets and regulation. There are clues about this in the titles used and empty claims, insinuations, and innuendo that drip out of one of the views. Brancatelli starts with “don’t believe the spin” which is an assertion that anyone who doesn’t share his view is lying. More in this vein is “we expect nothing less than obfuscation from Airlines for America” (the ‘evil corporation’ thesis) and “fool flyers into thinking that the lobbying group is anything but a front (the ‘stupid and ignorant consumer’ thesis).” A significant indicator is his “The “fare” you pay today isn’t an accurate reflection of your true cost of flying” which assumes price is somehow related to “true cost” which is an assumption that is grossly ignorant of economics. So how does Brancatelli support his thesis? Look at the conditions and qualifications he puts on his price comparisons in order to provide a supposedly even and fair comparison. It’s what is missing in his presentation that is the core of the argument.
In contrast, Thompson points out that managing cost and price is a matter of profitability and Brancatelli’s conditions and qualifications are matters of consumer choice that the airlines can use to find the sweet spot in what the customer values.
What Brancatelli says is that, if you want to fly now like you flew than, the actual price might be a bit higher. What Thompson says is that when you fly now, you have tools and choices at your disposal to balance the price you pay with the service that best suits what you want.
The core issue? Who makes your purchasing decisions for you and to what extent? This is the same issue at play with Obamacare where the government decides what you must buy and you have no choice about whether to buy or not. The regulation tends to raise prices and that then generates a demand for price controls and that is a deadly spiral into the sort of depths we see in Venezuela right now.