I always struggle to boil down the complexity of airline ticket pricing (buzz words fluidity, elasticity) — especially at $130+/barrel oil:

Why don’t airlines just raise airfares the amount needed to pass on fuel costs and be done with it?

It occurred to me today that the best way to describe the situation is a game of “Egg-Toss”.

In this game the CFO and CEO of each domestic U.S. airline take an egg — two paces apart prepared to make the first toss — each executive ready to gingerly snag the egg in mid air hoping it doesn’t crack! (the point where leisure travelers and corporations decide to take fewer trips or stop flying all together).

Every time an airline attempts an airfare hike (19 attempts this year) or floats a new fee (like checked bags) the CEO takes one step back and the egg is tossed.

Every time an airline cuts back flights the CFO takes one step forward and the egg is again tossed.

This game however has some twists — hecklers (low cost airlines with fuel hedges & investors) jump in and try their best to distract the airline executives on each toss.

Then there is the egg itself (the airline product) — certainly not Grade AA if you shine a light on it (according to J.D. Powers and University of Michigan Customer Satisfaction Survey).

So the 10 billion dollar (estimated losses for 2008) questions are:

When will the egg go splat and airline executives end up with egg on their face?

When / If the egg splats where does that leave the traveling public — who love or need to fly?