But when access to information changes, such as with the emergence of online booking, it can alter these dynamics. This all sounds great in theory, but in the real world, markets often have imperfect information, which can make it hard for consumers to truly evaluate the product they're getting.įor instance, when consumers lack full insight into pricing options, businesses may focus less on pricing competition and more on other factors, like product quality or service speed. Maybe a customer is looking for the cheapest price no matter the quality or, on the flipside, is willing to pay a premium price for what is assured to be a high-quality experience.

In a perfect market, customers and competitors all have equal access to information on each of those aspects, allowing people to choose a product based on a blend of the factors that they're most concerned with. In order to win over customers, companies typically compete on a handful of key elements such as price, product quality, and service. So if you're frustrated about tiny seats, frequent delays, and exorbitant additional fees, you may have the internet to blame. And they've introduced a complex system of additional fees, often hidden, for services that used to be included in the ticket price.

They've also deprioritized on-time performance, resulting in more delays.

They've squeezed seats closer together to fit more passengers on a single flight, often resulting in cramped and uncomfortable conditions. Instead of trying to provide a high-quality experience, airlines have started to skimp on passenger comfort. The emphasis airlines put on low ticket prices has made them less competitive in every other aspect of air travel. While allowing people to make their own choices is in many ways a significant improvement, the ease and transparency of online ticket buying has come with a serious downside. Since prices were now visible, customers could make their decisions based on price instead of on what the travel agent thought was the best flight. No more middlemen! You could peruse all the options yourself! You could even monitor how the prices changed over time! Internet-based booking also forced airlines to intensify their efforts to offer more competitive fares. When online ticket purchasing first took off in the late 1990s, it seemed revolutionary. But there was a time - for those of you who are as old as I am - when the only way to book a flight was to talk to a travel agent. Comparing airline prices, fees, and schedules on your own has become standard procedure. How did you book your flights for your summer vacation? If you're like most people, you bought them online - either straight from the airline's website or through a service such as Expedia, Kayak, or Google Flights. Account icon An icon in the shape of a person's head and shoulders.

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