|Quoting Drinkstrolley (Thread starter):|
I am fully aware that airlines are buisnesses and have very complex methods for calculating airfares etc but like so many industries here in the UK (telecoms, electricity) there has been intervention by the office of fair trading re pricing (i.e you used to pay a fortune to call another mobile phone network) so is it not about time similar was done to the airline industry?
Government intervention can be very useful when there is no perfect competition in the markets or when it concerns a primary need. For electricity or water supply, intervention can be useful to protect the primary needs of citizens.
In the telecom industry there are often (illegal) price agreements (once in a while it's on the news again that anti-trust agencies find agreements and give out fines) amongst the different operators. Here, there is a limited number of suppliers and so this is subject ta high risk of price agreements. Also, not everybody can just offer telephone services - you need to have a licence for that, and those have limited availability.
The airline industry inside the EU (+Norway, Switzerland) is very close to perfect competition. Any company having a bunch of 737s can start BOH
. Here, it is just how the market works. Apparantly, you really wanted to go in that certain week and in the end you turned out to be willing to pay a lot more for that certain week. And this is where the companies make their money. If there would be price caps, there would be less incentive to fly it, and the off-season prices would be lower.