Do they? I certainly don't behave that way. Fares are definitely something I factor in heavily, but a $10 difference isn't something I consider significant.
Long before that point, I start looking at other factors like departure and arrival times and whether I like the airline.
For example, I just did a quick search, and for $25 more total round trip, I can get nonstop flights both ways. I didn't specify nonstop as a search filter (since there are few nonstop flights between these two cities), but now that I know it's only $25 more, I'd pick that.
That actually does not disprove the GP's point. People do this when the price difference is too high, or when they don't know of any difference of value on both options.
Currently air travel is a completely homogeneous service. There is basically no difference from one company to the other, so it makes no sense not to go with the cheapest (even then, the flight schedule matters). That is not reason for a company to not differentiate itself.
(But I am very skeptical that a free drink would be enough of a difference.)
>Currently air travel is a completely homogeneous service. There is basically no difference from one company to the other, so it makes no sense not to go with the cheapest
Where are you getting this? Tons of airlines provide varying levels of service/amenities. Only thing that is homogeneous is that you get from A to B.
I think you are onto something there, but you should have phrased it another way.
E.g. I think airlines were caught in a devils agreement with air travel search engines.
They gave them access to their flights, and the search engines had to find the simplest qualities to compare fares on. That usually meant price.
So you have tons of airlines with no clear value proposition differences in a search result, and it leads to the equilibrium being a devastating fight for lowest price.
Getting from A to B is the most important service an airline provides. The seats are always cramped, so the degree doesn't matter terribly. Even on their website, I can't search by "flight has power outlets". Nor is the wifi speed available, or even consistent. Maybe the problem is that airlines don't have a value prop relative to each other at all.
Wow, I have a very different experience than you. I've noticed vast differences in airlines, how cramped they are, the cleanliness of their planes, the amenities inside the plane, the quality of the food offerings, even the attitude of the staff . And, having experienced all these different airlines, when I'm on a route i've been before I'm apt to pick the airline that gave me the best experience if other things are relatively comparable (price/time)
Even on the same airline, often there are partnerships. For example JAL/American and ANA/United I'm make sure to book the fight run by the Japanese partner not the American partner and the experience will be night and day. The Japanese plane will be clean the USA plane will be less clean. The Japanese staff will be friendly and service oriented. The USA staff will make me feel like I'm a burden on them and they'd rather be doing anything than their job. The food, even though it's airplane food, will be higher quality on the Japanese airline. Etc...
You can't search for "Flight has power outlets" because the airline doesn't necessarily know that the flight will have power outlets until the day of the flight.
They aren't going to advertise "Flight has an 80% chance of having power outlets". And likewise, they don't want to deal with customers complaining that a power outlet flight did not, indeed have power outlets.
Long before that point, I start looking at other factors like departure and arrival times and whether I like the airline.
For example, I just did a quick search, and for $25 more total round trip, I can get nonstop flights both ways. I didn't specify nonstop as a search filter (since there are few nonstop flights between these two cities), but now that I know it's only $25 more, I'd pick that.