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Old 17th Aug 2002, 18:07
  #31 (permalink)  
InitRef
 
Join Date: Jul 2000
Location: USA
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BOING,
I'm afraid you are oversimplifying the production costs of computers.
Much of the cost of computers lies in the massive R&D expenditures - in 2000, Intel spent $2.3 Billion and had 20,500 scientists doing pure research for the next Pentium/Itanium whatever. Once somebody builds a factory - its not as simple as churning new designs through it. Entire manufacturing facilities have to be rebuilt when new technologies are introduced.

The reason computers are cheap is because: sophisticated (and expensive) design & manufacturing, enable and benefit from economies of scale.

Also, most US pax are aware that one day it costs $300 to go JFK-SFO, and the next is $415, and if they don't stay over Sat nite its $2400. Dynamic pricing is certainly not a secret - try Expedia, or even the airline sites for their "every day leisure fares"!
In fact - its because business travelers know how the pricing works, and are disgusted enough - that the airlines are suddenly finding that they don't have full Y pax anymore.

Instead of paying $2400 for a 2-day business trip, companies are encouraging their employees to book a Sat stay -> get a $400 ticket on the same flights/same seats, the company picks up an extra night or two of hotel, and the employee gets a weekend on the company. (the company is better off by at least $1800, and the airline got screwed)

In my opinion, airline mgmt have spent too much time and effort concentrating purely on the revenue side (eg complex yield mgmt techniques) without being able to/or wanting to make the operations more efficient.

Last edited by InitRef; 17th Aug 2002 at 18:26.
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