Genuine Curiosity

Author Dwayne Melancon is always on the lookout for new things to learn. An ecclectic collection of postings on personal productivity, travel, good books, gadgets, leadership & management, and many other things.

 

Shouldn't a business make money?

A few days ago, I questioned the insanity of airline pricing.  I've been doing some research on the subject, and it still seems today's model is a poor one for the long-term viability of the industry.  A big part of the problem is the "disruptive pricing" phenomenon precipitated, in part, by a lot of the new entries into the air travel market (JetBlue, Frontier, etc.).

These companies have the benefit of smaller fleets and smaller footprints, which means they need much less infrastructure and far fewer people to support their operations.  They are also "buying market share" by offering incredibly cheap seats.  Additionally, these airlines don't have nearly the cost commitment for pensions and other retiree benefits that their more established peers must manage. (And fuel costs just make things worse.)

My gut tells me this is not sustainable (unless we want to accept serial bankruptcies and a perpetual stream of startup airlines as the new reality).

It's bad business to run your suppliers out of businessClosed_1 

In my time as an IT buyer, I always felt it was my duty to negotiate a reasonable discount, but I didn't believe in forcing my suppliers into a position where they couldn't sustain and improve their own business.  After all, I want my chosen suppliers to remain viable and thrive, since the switching process is painful and costly for all involved.

So how do we resolve this in the air travel industry?  I don't have all the answers, but my preliminary research tells me it will likely mean us getting "real" about the price we pay for air travel.  Don't get me wrong - it's not that I want to pay more for my tickets (when my family travels, that means paying for 5 tickets). 

However, if we don't adequately compensate airlines for the benefits they provide in a way that allows them to run reliable infrastructure, we all lose.  I, for one, don't want to lose the benefit of air travel.

Some ideas I've seen that may help:

  • FedEx has been using a "fuel surcharge model" to insulate themselves from fluctuating fuel costs
  • The airline industry needs to get in synch on how pricing is handled (of course, the danger is "price fixing")
  • There needs to be some consistent (and sane) method to allow people who plan ahead to get better prices than last minute purchasers - this fare sale fire sale approach seems to be driving the wrong behavior

What about you - any insight to share on this topic?  Am I missing something here?

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Airline troubles and pricing insanity

In a few weeks, I'll be speaking at a conference in Toronto.  Several weeks ago, my assistant made all the flight and hotel arrangements.  Ticketing

Today, she told me our travel agent accidentally canceled the trip, so she asked them to re-book asap so we can still get 21-day advance pricing.  The flight we booked today cost half the price we paid for the ticket booked several weeks ago.

In light of all the airline bankruptcies and rising fuel prices, this makes no rational sense to me (not to mention I thought you were supposed to be rewarded for booking early - not penalized).

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Katrina: Email from the front lines

I've been watching a lot of things on TV about Hurricane Katrina, and a lot of it is frustrating or discouraging.  Before you lose your faith in human nature, I want to share some first-hand stories of friends and family in Louisiana to provide additional perspective. 

Medical Triage:

My brother-in-law, a Doctor who lives in Chicago but happened to be at my wife's parents house in Baton Rouge during the hurricane, has been working at the triage centers near the Causeway bridge in New Orleans.  He says the situation is bad, but not as chaotic as he'd feared.  He has to throw away his shoes every night when they're done loading ambulances - combination of biohazards and the water they have to trudge through, but he's there every day to help.

Opening Up Their Homes:

Other friends have sent us update notes (email is working pretty well, though we can't get through on the phones most of the time).  They are hosting people in their homes to give them someplace to stay.  Here's a note from a friend in Prairieville, LA which is between Baton Rouge and New Orleans:

"We are okay.  We just got power back last night.... Most of my family is fine (they no longer have homes but they are safe).  We are still trying to connect with a few and are starting to get worried.  We did locate one this morning and she is on a bus to LSU as we speak.  I liken the way I am feeling to how I felt at 9-11.  Although this is more intensified.  I am so connected to people in the city of NO and the surrounding areas - I don't understand how I am supposed to just get on with life when life has been forever changed.  We are housing between 20 and 30 people and it feels good to be able to help take care of basic needs for them. I am so thankful that the people I care about are physically safe. 

"We need to thank God for that and pray for the others that are not so lucky.  I need to go and help with laundry and breakfast for the second crew -- talk to you soon."

Love to all Rochelle

And another from a friend in Baton Rouge:

"Hey everybody,

Sorry if you get this more than once, but I'm trying to get the word out about the need for help here in Baton Rouge. While we were spared big damage, we've become the  New New Orleans and command central for the evacuation refugees.  The N.O. government and most control is being done out of Baton Rouge. 

But the urgent need is for help for the people in and around Southeast Louisiana.  There's not a street in our neighborhood that doesn't have multiple families or friends staying at their houses, and most homes are still w/o power.  Watching CNN and national news doesn't quite tell the whole story.  You can't believe the massive problem that has occured and is going to get worse.

The shelters in Baton Rouge have all been filled up, all public bldgs, all apartments rented by this week, churches and homes are filling up.  One gas station in the middle of nowhere has over a 100 people just camping around its property.  I'm not sure of the gas situation outside our city, but there's a run on gas and I fear most people will not get gas today. We had to get some after 10pm last night.  I'd say only 1 in 7 had gas last night. Like 1972 all over again.

Anyway, please get a care package together, your checkbook, or whatever and please help out.  You can send to the numbers below, or send it to me and
I'll get it to the Red Cross supply center. If you live anywhere in Louisiana, then your local chapter is most likely already sheltering refugees also.  Our companies are also collecting funds to send to local chapters to help out.  The typical things are baby supplies, dry food, toiletries, clothes, towels, sheets, toys, basically anything somebody needs.

Please pass this along to your local email group so that we can touch as many people as possible.

Take care and please help out today.
Mark

If you have loved ones who were in the hurricane disaster zone, and you are trying to contact them to see if they are OK, the American Red Cross maintains a database of known disaster survivors. Their phone number is (866) GET-INFO. Please do not call the local chapters for information.

If you have loved ones of who have not been rescued, and you know of their location, please contact the Louisiana State Police at (225) 754-8500.

Additional links:

www.disasterhelp.gov
www.redcross.org

I've been through lots of hurricanes during the 27 years I lived in Louisiana, but I still can't comprehend this from 2500 miles away. 

Yes, Louisiana is where I come from. But this is bigger than than that.  They need our help as fellow human beings.  Don't do things to endanger your own financial situation, but help if you can.  The road ahead will be long and difficult for them.

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Helping with the Hurricane

My wife and I grew up in Louisiana.  Our parents and a lot of our friends and family members still live there.  We are thankful that our immediate families are OK, but we have friends and family that have lost everything (cars, houses, apartments, paperwork, everything) and have no idea how many weeks or months they'll be without a place to live or work.  There are others, such as my wife's aunt and uncle, who lived in New Orleans and we have no idea where or how they are right now.

There are over a million people in this situation in Louisiana alone.  To give you an idea what they face, check out this story on MSN.

If you are able to help, I ask that you consider donations to a fund that is helping with the recovery and the interim support of the many men, women, and children affected by this disaster.  A couple of options are:

There are other funds, as well, and many of them provide the ability to direct your donations to specific disasters.  I also suggest you check any charity you are considering using the Red Cross's  www.charitynavigator.org, and donate to 4-Star charities wherever possible.  The charities I mentioned above are both 4-Star rated.

Another factor to consider - New Orleans is one of the world's largest ports, near one of the largest oil refineries.  The faster we can help that area recover, the less it will impact all of us economically.  New Orleans is one of the largest waypoints for exporting and transporting many of our crops, and those will have no place to go.  This will affect the world's economy in ways we can't yet predict.

Thanks for considering adding your assistance to this effort.

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