Gearup (and company),
You're missing the point of my statement. I'm not trying to argue that VS
made a bad move by going for Airbus, in fact I never doubted their decision to choose the A340, it makes economical sense in their situation. My "oversimplified" comparison was a response to brons' statement that Boeing needs to price the 777 more competitively with the A340. They have no reason to. If Boeing makes more money by charging a premium for their widebody, then why on earth would they lower the price?
"As for the KIA/Mercedes example, I have news for you. I work in the automotive industry and I can tell you that KIA are winning a lot more accolades for their vehicles right now than Mercedes are."
First of all, are you trying to argue that Kia has better quality products than Mercedes? Or are you trying to say that Kia is improving and offering more value for the money?
No one would argue that Mercedes vehicles, when competitively priced, would not easily surpass anything that Kia could offer in terms of quality and performance. IMO, I agree that Kia has improved its quality and offers a great value for the money.
Now back to my "oversimplified" analogy. I'm not arguing that Airbus hasn't improved over the years and failed to offer great products for the price, THEY HAVE. All I'm trying to argue is that the 777, when compared with an A340 of EQUAL PRICE, will exceed the Airbus' performance and overall value. Now, when Boeing prices the 777 as 30 million more than the Airbus, they open a gray area, where airlines choose what aircraft best fits their needs, weighing price as an issue. In VS
's case, it made great economical sense to choose the cheaper aircraft with no transition cost. Customers will always choose what makes the best economical sense for their company (sometimes the A340, sometimes the 777).
Would Boeing benefit by pricing the plane 30 million cheaper? Of course not. Nor would Mercedes benefit by pricing their C-Class at $16,000 to compete with a Kia.
Last year, Kia posted an operational profit increase of 3.3% by offering affordable, value oriented vehicles. This year, DaimlerChrysler posted a 225% operating profit increase by apparently overpricing their high quality luxury vehicles. In this case (and perhaps in others as well), quantity isn't always more important than quality.
Finally, let me reiterate what I had said earlier. I'm not trying to say that Airbus and Boeing are as distinct as Mercedes and Kia, in fact they are much more similar in quality. I'm just using it as an "oversimplified" example to prove a point.
If at first you don't succeed, then skydiving is not for you.