Tuesday, June 17, 2008

Flying Update

A few days back, right after word came down about American Airlines introducing a new fee for your first checked bag ($15) to go with their new second checked bag fee ($25) introduced this spring, I predicted two things: That a lot of other airlines would follow suit, and that somebody would see the opportunity offered by this and go the other direction as a promotion of their own. I make predictions like this because I think they’re obvious; in this case, I didn’t feel there was any chance that at least one other carrier wouldn’t attempt to copy American’s attempt to squeeze more money out of their customers, or that there was any chance that at least one other carrier would attempt to draw new customers from those angered by American (and the other companies that had gone the same way)…

Man, I hate it when I’m right! Today, United and U.S. Air both announced their own checked-bag fees, and the other major carriers are expected to follow suit by the end of the month. Some of them are also launching fees for beverages and other in-flight services, as well. Meanwhile, Southwest Airlines has stepped up its “Fares Don’t Fly With Us” promotion, and are now advertising no baggage fees on their website. I’m not sure what, exactly, Virgin America will do with an opening like this; it depends on how much of a priority U.S. domestic operations are being given by the parent company (and its iconic founder), but the potential is certainly there…

Meanwhile, there was a story in the news over the weekend about gasoline in one part of the UK reaching the equivalent of $17 a gallon after a trucker’s strike pinched off most of the fuel supply to that region and the local vendors began trying to conserve their stock. It’s a temporary condition, created by an artificial shortage, but can you imagine what the effect would be if someone tried that in this country? There’d be rioting in the streets, and I’d have to advise anyone who works for an oil company (even if they work in the supply chain for minimum wage) to start keeping a very low profile…

I was also saying last week that I really do believe that the current oil crisis is not going to go away; as long as emerging countries like China and India are willing to pay prices like these for oil, there is no real chance of gas prices in the U.S. going down. Even if new supplies are suddenly discovered around the globe, the sad fact is that once people discover they can get $4 or more for a gallon of gasoline, it’s going to be next to impossible to get them to go back under $1. And unless we all stop buying gas, that condition is never going to change. Like the old saying says, “You can’t get the genie back in the bottle…”

In the 19th Century the Industrial Revolution changed the way everyone in the world lived forever; in the 20th Century mass production (assembly line operations), automation (computerized operations) and the Internet changed the way everyone in the world lived, also forever. I don’t pretend to know all of the ways in which the 21st Century will change our lives, but it seems clear that the time of limitless natural resources (or at least $1 gas) are gone, and will not return. New technologies like Cheap Solar, Clean Coal, Cold Fusion and the hydrogen fuel cell may bring a return to that general lifestyle, but they are far more likely to propel us into a new age, as different from the 20th Century as that time was from the 19th or even earlier…

And if we’re really lucky, someone will invent airplanes that run on one of these alternative forms of energy, so we can all avoid being nickel-and-dimed to death with checked baggage fees…

2 comments:

Eponah said...

How is it that "emerging countries like China and India" can afford to pay these record breaking prices for oil when most of their population subsists on wages that are a fraction of our country's average wages and we're struggling? Are China and India's populations paying $4 a gallon for gas? If we have trouble paying that on wages of 30-40k a year, how can their populations, where I understand 20k is a lot of money, afford to buy gas? Even if their gas isn't taxed, that still only reduces the price to $3, still a significant portion of their wages.

Max P. Belin said...

I don't pretend to be an expert on the economies of China or India; I only know that these countries have increased their import (and presumably, use) of oil exponentially in the past few years. Perhaps there are government subsidies; perhaps the governments are themselves the prime consumers; perhaps there are just a few people within each country who have that kind of money, and they account for the use, I don't know. But the U.S. by itself does not account for even a quarter of the increased demand for oil - and our demand is actually starting to decrease under $4+ gas...