A low cost alternative?
Air transportation has long been an expensive travel option for Americans. In many cases you can spend a couple of hours on the interstate, and be where you want to be cheaper than taking a plane, although gas prices are going up, and the planes are faster if you do not have to detour to a major hub and layover for connecting flights. Transportation from major airport to major airport is being made much cheaper by carriers like Jet Blue. However, they recently made the news for failing to meet their flight schedules and entangling thousands of passengers in delays. Unlike the old established carriers who try to make their profits by keeping fares high. Jet Blue is employing an age old strategy once used by Cornelius Vanderbilt on his steamship lines, and later his railroads. The theory is that lower prices with higher volume will yield profits superior to low volume at high prices. It will be interesting to see how this new contender for air travel dollars will fare. Unlike Jet Blue, Vanderbilt made a fortune with high priced food and beverages on his steamships. He enticed them aboard with low fares, and made a killing on taking care of them once they were there.
Personally, I’m always for lower prices, so I’m rooting for Jet Blue, but it remains to be seen whether business travelers who can write their airfares off as a tax deduction will take a fancy to this new idea. Jet Blue may only fly to certain places, but in many cases their prices beat out even Greyhound bus fare without the long hours on the road with stops in every tiny little town on the map. Naturally, the consumer has to be rather determined to get prices as low as advertised, and the best deals usually require jumping through a few hoops. Also, if you have to depart and arrive at a certain time you may find yourself in modest accommodations for a price not too far below the competition.
I’m a capitalist at heart, so I’m watching with interest to see how the consumers decide to spend their dollars in the airport transportation market.
