Sorry, I’m failing to be appalled at Reich’s speaking fees, but I am appalled at the airlines profiteering on people’s desparate efforts to get out or get home. The two situations are hardly comparable.
Supply and Demand.
Free Enterprise.
The Market System.
Folk who don’t like the concepts above like to use the term “price gouging” instead.
As a Conservative, I do not use the term “price gouging”.
Given that the storm rendered all travel paralyzed, those people who couldn’t get seats because there were too few to go around were going to be looking at delays anyhow. Other possibilities existed for many, such as driving a rental car or taking a bus or taxi to an operative airport. Airlines were fully refunding all canceled-flight tickets.
People say the same thing about stores jacking up prices on bread, water, batteries, etc before a storm. The result is that these items are sold at their usual price and are wiped out by the first few people who show up. If they were sold based on market value, then people would have to consider how many gallons of water at they REALLY need before they load 20 of them into their shopping cart.
The two situations are perfectly comparable. But nevermind. What specifically “appalls” you about “profiteering” on people’s desperation? Doesn’t the very fact that they are desperate, in your words, prove the market price is higher? If you kept prices the same despite customer’s desperation wouldn’t you increase the likelihood that less desperate people would gobble up the tickets of more? Yes, absolutely, especially if they were rich.
What do you want, exactly? For the airline to ration seats but not profit from it? How? By donating seats to make up the difference between normal and hurricane profits? Why? Wouldn’t that just be the winners exploiting all remaining desperate people? Why’s it okay for them but not the airline? Or is it for PR purposes? I can understand why that’s necessary, given the delusions of people like you over the phantom distinction between profiting and “profiteering.”
Since the airlines had a limited number of seats left, how would you have chosen who gets a seat?
You need to think through to the logical conclusion of your point. If you believe in the free market system, market based pricing is the only logical approach. If you want the government to regulate the market in order to make it more humanistic (and might I add, capricious), then you do not believe in the value of the free market and capitalism.
If the government gets to decide what is reasonable profit, Katy-bar-the-door. Free people get to decide what is reasonable based on their own pocketbook and over-pricing is eventually curbed by loss of demand.
If the folks who agreed to pay $4000 for their tickets out of town didn’t want to have to pay so much, they should have made plans in advance of the approaching storm. That mistake cost them.
Under the system you seem to espouse (with government intrusion), the airline would have been forced to prioritize the assignment of the available seats by interviewing each of the passengers in order to ascertain their need for travel and assign each based on the subsequent numerical score. Or maybe a lottery system should be set up, just to be fair, in these situations.
No, airlines operate on very low profit margins. Airlines lost millions of dollars due to flight cancellations, diversions and equipment grounded (and therefore accruing costs but zero revenue) during this storm. Don’t begrudge them just a tiny bit of revenue recovery.
Oh no, the airlines charged more because there was unprecedented demand? Cry me a river!
Listen, unless you give the airlines some moral credit when they are forced to lower prices because of low demand, then you have no standing to assign them moral blame when they raise prices due to high demand. Otherwise, you’re just being a hypocrite.
Even if you were consistent about it, it would still be supremely silly to make moral judgements based on entities acting according to the natural laws of economics, just like it is silly to make moral judgements based on animals following their instincts.
You must HATE auctions where one person is allowed to bid the price of an item beyond what any other person wants to pay!