Originally Posted by
rubik101
The money they made from their fuel surcharge will dissappear in fines, legal fees and compensation, lovely stuff.
Ah yes. So the monies paid by BA pax will now be diverted to government funds as "fines" which they will proceed to p1ss down the drain on whatever their fellow travellers in the eco-nazi lobby tell them they want to have provided.
I think I'd rather BA kept the money; they might spend it on something more worthwhile, like investing in the fleet.
Incidentally, it is no show of conspiracy if two competing organisations change their pricing (up or down) at the same time, it is actually standard business pricing as any first year economist will tell you; one hears the other is going to do it, they then do the same. The prices being charged bear little relation to the costs of an operation and everything to what the competition is doing. The consumer, purchaser of your services, couldn't care less about your costs and in fact does not even know them. But they know everything about what is being charged elsewhere for what they perceive as a comparable service (even if we all maintain it is not actually so) and are very much in the habit of going for the cheapest. So if your competition knock £100 off the fare, you can either see your bookings drop right off, or you can match it. And that is what happened here. What the competition is doing is even incorporated in the Yield Management calculations, real market forces at play. There we go, Economics 1.01 on PPRuNe for a Monday morning !