Airlines, like economists, often fail to understand that most human beings believe the price is related to cost rather than supply and demand.
In the end, this will probably be resolved by increasing the fares to the lower demand cities to prevent this behaviour. Fewer people will be able to afford to fly and the airlines will also make less money, which an economist will say is a lowering of overall welfare.
But once again, economists fail to understand that we don’t care that much about what actually happens - how it feels and the narrative it tells is far more important. Businessmen who fail to understand that truth risk our well-deserved wrath.
