Comment Re:Ignores the maginal price of airline tickets (Score 1, Insightful) 515
The most likely outcome is they will cut flights to deal with the drop in passengers and charge more to make up for lost revenue. They may be able to charge a premium since flying is faster, though not inordinately so once you factor in the security circus.
Much of an airline's expenses are relatively fixed - fuel, landing fees, taxes. Lowering prices may simply not be an option. It's not a very profitable business to start with - there have been analyses over the years which show while there are occasional good times, when you add up all the profits and all the losses you end up with a negative number, i.e. the industry as a whole has lost money.