Wray has it nailed. Thank you sir.
Another "forced honesty" rule. Make airlines apply the same profit
margin to "add-ons" that they make on the basic fare. It's called
"cost based pricing".
Why? Again, the value of a product or service is defined by what people are willing to pay for it. Sure, there are exceptions when it is a public entity like a utility company or a monopoly, but this is neither. It’s entertainment. When you go to sell your home, will you sell it for some State directed “value” or for as much as you can get for it after full disclosure of the condition, etc...?
I've often said that in the free market system, the only way you can
make money is to deceive the customer - by giving them less than they
think they are going to get or by charging them more than they think
they are going to pay. This is a perfect example, they un-bundle a
cost so that their ticket price looks lower, then get it back with the
surcharge. In fact, what they are doing is really bait-n-switch, which
has been and should be illegal.
“Bait and switch” is the practice of advertising something that either does not exist or exists in such low quantity as to be misleading. Airlines do neither.
Deception involves not fully disclosing the cost. Look at the airline websites, all costs are fully disclosed. It is interesting to see that the airline flight costs $10 and the government bureaucracy, use fees, taxes, etc. costs $20. Should that be hidden information? So, being well informed is somehow an affront to the public? To think people can’t read or comprehend and the government has to step in to protect them is a little patronizing to the general public. Have you ever been tricked into paying more for a ticket than you thought it was going to cost at the time you entered your credit card number? If it hasn’t happened to you, do you think it has happened to other? Some how you have to protect all the others?
If airlines were required to include the cost of a carryon in the
overhead compartment, but would be allowed to give a discount if you
only took on a smaller bag, do you really think they would give a
discount that was as same as the surcharge, or even give a discount at
all.
How about the opposite. How about they are required to quote the seat price, then a shopping cart to choose all else from. Hey, that’s what’s happening. As a result more people can afford to fly now than would otherwise be able to fly. But apparently its better that everyone only fly by your luggage standards or not at all?
Would they give the same discount by your method? No idea. Not mine to care about. The airlines are charged by their stockholders (me and everyone else with a 401(k)) to maximize profits by filling all the seats at the highest price possible. They will manipulate the price in such a way that that fills the seats; roughly meaning maximizing the number of people who can afford to fly in a financially stable airline.
