You just explained the ways we try to fix costs. But we can't do anything to fix supply and demand. Not to mention the fact that, as a general rule, in a flight of 140 people, 120 of them paid roughly the same price. If we're talking about a literal 50% price difference, then that's abnormal. The fluctuations are pretty minor. 10-20% usually to cover the variability of supply and demand. What do I mean by that? Let's say our Rapid Air service Toronto-Montreal runs 1 flight every 3 hours. Our competition runs 1 flight every 4. our more frequent flights mean people can find more favourable departure times so we manage to keep a 70% load. Our competition only keeps a 55% load, but due to changes in the market, like the one I'm about to describe, in a different region, they attempt to make up costs by trying to increase their load factor. So they offer a seat sale. We notice their loads are increasing to 75%. Some of that at least is being diverted away from us. We could run a seat seal right now as well, but we would either have to offer their rate, which may be lower than we can make a profit off if they're a low-cost airline, or we could we wait. We opt to wait. 3 months later, to try and recoup the losses we had during their seat sale, we run our own. Maybe we don't cut costs as much, but it's cheaper than our usual fare. And that combined with our better selection of departure times recovers the revenue we lost to them initially. Or we could do what they did, and instead offer a sale on Vancouver - Montreal flights which have a traditionally lower load factor to bring those numbers up and recoup the costs there. But maybe that forces Air Canada to run a sale on Toronto - Orlando flights to make up for the revenue they lost to us on Vancouver - Montreal, so we lose load on that route to them. So we offer a discounted flight to London, and the ripple floats around.
We can't control that. It's a variable cost that we can't predict. We don't always know when a competitor is going to offer a sale, or start a new route, or close an old route. And when those fuel contracts expire, prices may need to go up to cover the cost of the next one, and if half the people on a flight have already bought tickets, the rest may find the cost has gone up.
All business have fluctuations in price. We could avoid that be eliminating advance sales. You show up the day you want to fly, stand in line and hope you get a ticket. Then we could charge the same price for everyone. But I don't think anyone wants that. If we could charge a reasonable rate and people would recognize that our rate may be higher but it's offset by our services, we maybe wouldn't need to respond so quickly and so "drastically" to market fluctuations. We could weather the storm of a competitors seat sale. But we can't. Rapid Air already operates at a loss, for example. But the trade off is building loyalty from frequent fliers who get used to our level service and don't want the downgrade.
As for what "services"... You're obviously fired up. Gate agents too busy to help? Are you seriously telling me that every single time you have flown, which I assume is often for business, gate agents are too busy to answer your questions? I've never heard of that happening so regularly. I've flown occasionally in civilian attire and never once had a problem getting a gate agent to attend to my needs.
Aside from that though, pillows and blankets are free on the full-service airlines. Not a big factor for the business traveler on a 2-hour flight to LGA, but for family of 4 flying to Paris, it's nice to have. Peanuts, sure. Or cookies. Or pretzels, or various other snacks. On longer flights, free meals. As for your small plastic cup of soda... You're a business traveler that implies you fly frequently, and you have never once noticed that they call it "complimentary"? You've never once seen a person ask if they could have the whole can, or a second cup (or third or forth), or a water, a coffee and a soda? If the little cup isn't enough for you, ask for more! If you're on a full-service airline, that stuff is free, and we carry A LOT of soda, coffee and tea.
Other services you get on full-service airlines: skycheck, where your carry-on can sort of be "checked" but it's checked at the end and given back to you as soon as you deplane. Extra checked bags (or as the trend is growing, at least 1 checked bag free). Additional free carry-ons. You also get a better on-time performance from a full-service airline because of priority gating that they enjoy at airports they fly to. That difference is significant. I could go on, but I think you get my point. You obviously have an idea in your head about airlines, your statement about half priced (or double price depending on which side of the debate your on) tickets and gate agents unwilling to help and the comments about "gouging" show me you have long decided how you think, so who I am to tell you otherwise.
I think you need to revisit the idea of "gouging" though. The average profit right now is about 2.4% per flight. It's an average of $5.42 per passenger. So when our competition undercuts us by $16 per seat, you can see why we can't afford to match it for long. Losing $9 per seat on a 140 seat or larger aircraft 7 or 8 flights a day really starts to cut into the profitability of the route. If you look at the cost, based on the value of the dollar, per flight, you'll see that despite labour and fuel prices going up, the average cost for a flight is going down, and has been for some time.
From last year:
http://www.forbes.com/sites/tedreed...-they-want-to-be-make-21-cents-per-passenger/
From February of this year:
http://www.economist.com/blogs/economist-explains/2014/02/economist-explains-5
And then more recently from June:
http://www.cnn.com/2014/06/03/travel/how-airlines-make-less-than-6/
And if you prefer pretty pictures, there's this:
So when we're making a profit margin of anywhere from 0.1%-2.5% profit, tell me how we're "gouging". Can you name a single industry that operates on less than 3% profit margins year after year? If airlines made 25% profit, I'd agree there was gouging going on. But when a quarter comes and goes and a 0.1% profit is recorded, how can you turn around and say anyone other than airlines are being gouged?