Monday, July 05, 2010

Airline Competition 1: Standing Room Flights

A friend posted this interesting news report, below:

Ryanair to sell £5 tickets for standing-room only flights

Michael O'Leary, the airline's chief executive, will set out proposals today that include charging customers to use the loo.

A standing area with "vertical seats" will be introduced at the back of its fleet of 250 planes.

He said that charging customers £1 to make use of facilities would encourage travellers on one hour flights to use lavatories at the airport instead of on the aircraft.

The Irishman said he intended to introduce coin-operated loos and added: "The other change we've been looking at is taking out the last 10 rows of seats so we will have 15 rows of seats and the equivalent of 10 rows of standing area."....

This is an interesting development in the process of capitalist competition in the airline industry. The competition among many airlines is pushing companies to provide more varied services at varied prices. Market segmentation works always. Those who want full comfort, they get business class seats and pay high. Those who economize, get economy class seats and pay the standard rates. And for those who want to economize further, get standing room ticket and pay even lower. There is a market for everyone, rich and poor, producers and consumers.

That's the beauty of free market capitalism. People accept inequality and they do not call for a revolution in order to have "equality for all." Governments, upon the prodding of the bleeding-heart groups, usually come in to correct the "market failure" of social inequity. And that's where waste, inefficiencies and corruption occur, and people's dissatisfaction in society and governments.

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