When The Values Go Down, Down, Down
Monday, April 28th, 2008Not too many people except for professional musicians remember Les Paul and even most pickers recall him best as the man who pretty much invented, developed, perfected and popularized the electric guitar. (Many guitarists also remember Paul’s wizardry at winding up ultra-hot induction coils that no one else has ever been able to match.) Not as well remembered is the fact that Les Paul, who turns 93 in June, also invented — or at least commercially tamed — multi-track recording and that he was arguably one of the greatest guitarists, regardless of type, who ever lived and the only guitarist who ever lived to earn two Grammys at the age of 90. Or that he and his than wife Mary Ford were one of the top recording duos in the music business in the 1940s and ’50s.
Of all the things that are least remembered about Les Paul and Mary Ford, commercial jingles quite possibly head the list. While you may have heard some of their classics like “Tennessee Waltz” or ” Vaya con Dio” on XM or Sirius or even a terrestrial oldies station, the odds are strong that neither you, nor most everybody else still alive, has heard their wonderful spots for such long-gone promotions as Miss Reingold Beer (”Vote, Vote for Miss Reingold … ) unless you happen to own one of several excellent Les Paul CD boxed collections.
But if you do own the CDs, you’ve probably heard the cute ditties Les and Mary did for Robert Hall Clothes: When the values go up, up, up and the prices go down, down, down.
Nobody’s singing about it yet (moaning, yes, singing, no) but the airline industry — which seems to specialize in getting things backwards these days — is doing a magnificent job of reversing that particular jingle into “when the prices go up, up, up and the values go down, down, down.”
In the process, they are rapidly escalating the day when a customized just-for-you, fly-on-demand air-taxi flight might be more than just cost effective compared to a major airline trip, it might actually — taking into account getting to and from distant airports, scheduling problems requiring otherwise unnecessary overnight stays, etc. — be cheaper.
Here’s why. Many airlines, if not most, are using the reality of record oil prices as a scapegoat for a greedy attempt to generate excess revenue to cover the mounting losses caused by a decade or more of gross — or in some case virtually malignant — mismanagement.
Here’s a very rough example (rough because the 757, like most airliners, comes in numerous configurations and gross weights).
– Rough fact one: A Boeing 757 consumes about 2.5 gallons of jet fuel per mile and carries around 210 passengers.
– Rough fact two: A typical air taxi flight is anywhere from 200 to 300 miles.
– Rough fact three: A 757 uses about 750 gallons of jet fuel to fly 300 miles.
– Rough fact four: In April 2008, according to American Airlines, jet fuel was about 89 cents per gallon higher than in April 2007.
– Rough fact five: Per ticket airline fuel surcharges and other forms of fare increases that the airlines blame on rising fuel costs average $15 (conservatively) per one-way ticket where applied.
– Rough fact six: Airline raw passengers counts may be down, but load factors are almost unbelievably high. AirTaxiFlights.com’s hometown airline, Delta, reported system wide loadings of over 83 percent in March and many other U.S. airlines are also flying with their aircraft more than 80 percent full on average.
Let’s do the math. Our “typical’ 757 uses 750 gallons of fuel to fly 300 miles, which is costing the airlines an extra $670 relative to last year. If the plane is 80 percent full and each of the 168 passengers pays even a ten dollar fuel surcharge that’s over $1600 in the airline’s pocket, a $900 markup over the actual increased fuel charge. Even if the plane takes off half empty, the airline makes a $300 profit on the fuel “surcharge.”
(Note: Profiteering from surcharges is not a practice limited to U.S. airlines. As this was being written, British Airlines and Virgin Airlines settled long-standing legal actions by admitted to fuel charge price fixing and overcharging and agreeing to refund over $200 million in bogus fuel surcharges to passengers.)
But that’s just part of the story. The rest of the tale has to do with what could be called the “movie theater effect.” You take a date and a hundred dollars to a movie. The tickets are nine dollars each. You leave without enough money left to stop for a drink on your way to your place or hers/his.
That’s the movie theater effect or, just as accurately, the pickpocket business model.
Whatever it is, the airlines love it. It’s the philosophy behind everything from surcharges on tickets purchased directly from airline-employees over the phone or at airline ticket counters (yes, almost unbelievably, Alaska Air and others are charging you extra for the privilege of buying a ticket directly from them instead of Expedia), to $25 to $50 checked baggage fees, to curbside check-in charges, to “handling” charges on frequent flier redemptions (thanks, Delta!).
What’s next? Paying for peanuts per shell, with a minimum purchase requirement of three pounds? C oin slots on the toilets? With a dual-occupancy surcharge for Mile High Club members?
Whatever it is, whatever strategy the airlines have in mind to help them drive their fists deeper into your pocket, the chances are excellent that it won’t ever be part of the Air Taxi Experience.
