I'm going to politely disagree on this just a bit. Yes many people seem to shop around for the cheapest price on things...but usually things that they don't value much. For example maybe you buy the cheapest toothpaste you can find, or a laundry basket, etc. But most people will pay more for something they do value. Look at how many people pay $5 for Starbucks products (which has a strong brand image and loyalty), look at how many people buy Apple products (again, strong brand image and loyalty). Most people don't go out and buy the cheapest LCD television they can find or the cheapest car...because they value these things. The airline industry, by cutting fares so much, has caused the consumer to devalue air travel. To them its just the Wal-Mart of the air. The experience on most every airline is exactly the same as the other - crowded, $3 cookies, not on time, etc. People don't value air travel like they used to anymore. That needs to be reversed. I think reducing availability and increasing fares is a step in the positive direction. It needs to be less commonplace than it already is...but it needs to be compelling. People will spend more for something if they PERCEIVE they are getting more value for their money. Perception is their reality. If they think Starbucks coffee is the greatest thing on earth, no amount of $1 coffee from McDonald's is going to sway them. People aren't going to stop buying Apple products because "dude, they can get a Dell" for $500 less. An airline needs to work hard on the perception of value for the money, branding and loyalty. Just paying lip service to it and not doing it will not change a thing.

American companies tend to look for the overnight innovation - something that will revolutionize their business overnight. If it doesn't work in a few weeks they abandon it. How did Toyota get to be such a dominant force in the automotive industry? They make little changes, thousands of them in a year, small steps...and they continue to pursue and nurture them. Their idea of innovation is that tiny little steps will eventually produce a great thing. They listen to customers, managers and people working on the production line. The result is a product that is dominant and a brand that people will pay more for because of perceived value for the money. So we add something at a US airline and abandon it a month later because it didn't show any immediate return. This is not a good practice at all. Slow and steady wins the race!

I could continue, because this is something I've felt passionate about for a long time and spent a lot of time thinking about and researching. I'm highly interested in business...and it eludes me how companies that provide such a great service could be so inept at turning a decent profit!!!