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Friday, August 27, 2010

It's time again for "If Airlines Sold Paint"

This humorous parody of airline pricing is being republished because of a story that appeared in the Wall Street Journal recently entitled "You Paid What For That Flight?"

Alan Hess, owner of American International Travel in Bountiful, Utah originally wrote the following tongue in cheek satire titled “If Airlines Sold Paint”.

We have taken the liberty of updating his soliloquy. This story is a succinct picture of the pricing madness as (rightfully) perceived by the consumer. This may help non-industry people get an idea of the insanity that we have to accommodate in the distribution technology for the industry.

Buying paint from a hardware store ...

Customer: Hi, how much is your paint?

Clerk: We have regular quality for $12 a gallon and premium for $18. How many gallons would you like?

Customer: Five gallons of regular quality, please.

Clerk: Great. That will be $60 plus tax.


Buying paint from an airline ...

Customer: Hi, how much is your paint?

Clerk: Well, Sir that all depends.

Customer: Depends on what?

Clerk: Actually, a lot of things.

Customer: How about giving me an average price?

Clerk: Wow that's too hard a question. The lowest price is $9 a gallon, and we have 150 different prices up to $200 a gallon.

Customer: What's the difference in the paint?

Clerk: Oh, there isn't any difference, it's all the same paint.

Customer: Well, then, I'd like some of that $9 paint.

Clerk: Well, First I need to ask you a few questions. When do you intend to use it?

Customer: I want to paint tomorrow, on my day off.

Clerk: Sir, the paint for tomorrow is $200 paint.

Customer: What? When would I have to paint in order to get $9 paint?

Clerk: That would be in three weeks, but you will also have to agree to start painting before Friday of that week and continue painting until at least Sunday.

Customer: You've got to be kidding!

Clerk: Sir, we don't kid around here. Of course, I'll have to check to see if we have any of that paint available before I can sell it to you.

Customer: What do you mean check to see if you can sell it to me? You have shelves full of that stuff; I can see it right there.

Clerk: Just because you can see it doesn't mean that we have it. It may be the same paint, but we sell only a certain number of gallons on any given weekend. Oh, and by the way, the price just went up to $12.

Customer: You mean the price went up while we were talking?

Clerk: Yes sir. You see, we change prices and rules thousands of times a day, and since you haven't actually walked out of the store with your paint yet, we just decided to change. Unless you want the same thing to happen again, I would suggest you get on with your purchase. How many gallons do you want?

Customer: I don't know exactly ... maybe five gallons. Maybe I should buy six gallons just to make sure I have enough.

Clerk: Oh, no sir, you can't do that. If you buy the paint and then don't use it, you will be liable for penalties and possible confiscation of the paint you already have.

Customer: What?

Clerk: That's right. We can sell you enough paint to do your kitchen, bathroom, hall and north bedroom, but if you stop painting before you do the other bedroom, you will be in violation of our tariffs.

Customer: But what does it matter to you whether I use all of the paint? I already paid you for it!

Clerk: Sir, there's no point in getting upset; that's just the way it is. We make plans based upon the idea that you will use all of the paint, and when you don't, it just causes us all sorts of problems.

Customer: This is crazy! I suppose something terrible will happen if I don't keep painting until Sunday night?

Clerk: Yes sir, it will.

Customer: Well, that does it! I am going somewhere else to buy paint!

Clerk: That won't do you any good, sir. We all have the same rules. And you may be able to buy paint for your bathroom and bedrooms, and your kitchen and dining room from someone else, but you won't be able to paint your connecting hall and stairway from anyone but us. And I should point out, sir, that if you paint in only one direction, it will be $300 a gallon. You might as well just buy it here, while the price is still $13.50.

Customer: I thought your most expensive paint was $200!

Clerk: That's if you paint around the room to the point at which you started. A hallway is different.

Customer: And if I buy $200 paint for the hall, but only paint in one direction, you'll confiscate the remaining paint.

Clerk: No, we'll charge you an extra use fee plus the difference on your next gallon of paint. But I believe you're getting it now, sir.

Customer:  Ok, I will be painting the full room, painting all the way around from where I started.

Clerk:  OK, that is $200.  Do you want a handle and a lid on the can?  That is $50 extra.

Customer: That is insane! Here is $250.  I think I'll drive on my next trip.

Clerk: Thanks for flying - I mean painting - with our airline.


We think you will agree that airline pricing is indeed insane, and in many ways has contributed to the current financial state of the airlines, as it is expensive to maintain so many fare types and to monitor compliance to the plethora of fare rules.

Add to that the negotiated and net fares that have emerged in the post-zero commission world, and the procedural and technical challenges just keep getting more and more complex.

Lastly and most insanely, add the endless add-ons to pricing for seat selection, aisle and window seats, etc. etc. and the insanity is complete.
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