Posted by Doug
Portlandia
3289 posts

Umm - good point Maureen, but gas is coming back to $4 a gallon. So no relief expected.

Posted by JER
Seattle, USA
981 posts

I have always assumed that airlines engage in price fixing, at least in the sense that they tend to match competing prices. Often one airline will raise a price, expecting others to jump on board with a parallel increase, and if they don't, will be forced to re-lower the price. So the surprise is that, apparently, these airlines actually overtly discussed price fixing instead of just doing it?

Posted by Maureen
Atlanta
1357 posts

I'm surprised no US airlines are involved. I've been wondering, though.... With the recent fuel surcharges, did they ever roll back the post-Katrina fuel surcharges? I could see that when gas was $4/gallon, but did they go away when prices fell back?

Posted by JER
Seattle, USA
981 posts

I've heard the expression that prices are 'sticky downward.' In other words, when costs to a seller go up, they raise their prices right away, but when costs go back down, prices drift down slowly at best. Of course, if markets really worked and there was no price fixing, this wouldn't happen, since some seller would want to capture market share and would lower prices once costs went down. But markets don't work that way except in textbooks...