If you'll excuse an outsider to the industry butting in, it seems to me like the problem for the airlines is going to be in business travel. To quote scroggs,
We don't make money from bucket loads of £39 return fares - we make it from the few £500+ business returns.
You pay a hell of a lot more money for a couple of glasses of less-cheap chardonnay and a bit more leg room. 30 seconds on
www.british-airways.com got me a quote for £4k
for a 1 week business class return from LHR to ORD. I fly that route regularly in economy (family in Chicago), and I doubt I've ever spent more than £400 for the ticket.
When the travel bill got out of hand at a company I used to work for, they offered us a choice. Business class as before, or Economy and a "subsistence" payment that could be up to £500. That's a taxable benefit, of course, but in effect you got to do whatever you wanted with the money. The prospect of money in your pocket won most times - signing away a hundred quid or more for a bigger seat made people feel
they were paying for it...
My point is just that relying on those few £500+ fares seems dangerous to me. You pay a lot more for not much, and the people paying the bills are increasingly aware of that.
Arriving "ready for business" is also a fallacy when it is cheaper to send the staff a day earlier than to buy the ticket. Ultimately if the business class fares just dry up then economy fares will have to go up, but that's just going to drive more people away...
(Edited for UBBcode ineptness)
[ 08 August 2001: Message edited by: Evo7 ]