Taking to the skies with the market

It is easy to understand why China Eastern Airlines' dynamic chairman Liu Shaoyong felt so unhappy about the loss of a big slice of income to ticketing agents.

Despite their monopolistic position, members of the airline oligarchy have little to show for in terms of profitability. Some of the past problems, such as high fuel cost, were outside the control of the airline executives. Bad business can't be blamed for the low return because the increase in passenger traffic has ensured that there were never too many empty seats in most flights. What's more, the airlines, it seems, have done a credible job of controlling their operating costs.

Maximizing income must be the priority in the minds of Liu and other airline executives. Pricing is, of course, a matter that they cannot decide on their own. But there are ways to increase income without raising fares.