I recently attended an executive training class about competitive strategy led by the dean of one of America's leading business schools. We spent a good portion of the class talking about the airline industry and how mainline carriers have struggled to compete against their low-cost counterparts. What mainline carriers have not done, he said, is create a product worth paying for.

Mulling this over on a recent flight on Sweden's SAS (Scandinavian Airlines), it was clear that this airline had so destroyed its in-flight product that there was no way they could command a premium in the market. The seats were cramped; when the flight attendants came by with drinks they demanded payment even for a water (I literally scoffed when I heard this!); and their attitude could not have been much better. My company had shelled out hundreds and hundreds of dollars for my ticket. And what were we paying for exactly? The frequent flyer miles? The paint job? I dare say a flight on Ryanair would have been just as miserable.