Will airline tickets ever come down again?

[Dancingfish Senior Member Find all posts View Profile Close Dancingfish]

I have been searching daily for cheap tickets from DC to Chicago for 2 months now and they are all coming up $240-$300!!! crazy crazy.

Do you think this is our new reality that bargin airfare is a thing of the past?

[T. R. Oglodyte Moderator Find all posts View Profile Close T. R. Oglodyte]

I have been searching daily for cheap tickets from DC to Chicago for 2 months now and they are all coming up $240-$300!!! crazy crazy.

Do you think this is our new reality that bargin airfare is a thing of the past?

Consider that:

1. the industry as a whole has generally been unprofitable for years because of overcapacity and price cutting. The effect of mergers and consolidations is to reduce capacity so that fares can be raised to profitable levels.

2. fuel cost is one of the biggest operating costs in the airline business, and fuel prices are about as high as they've ever been. So even without changes in capacity, prices would have to rise to cover the increase in operating costs.

3. In the world-wide move to limit greenhouse gas emissions, fuel combusted in aviation is a prime target. The strategies that are likely to be implemented will greatly increase the cost of air travel, with the explicit goal of raising prices to a level sufficient to discourage people from traveling by air.

So I would say that for the next while air fares are not only going to remain high; they are likely to increase even further while availability of flights decreases. There may still be "bargain" fares, but the discounts will be much less frequent and the amounts of discount will be less.

[bnoble Senior Member Find all posts View Profile Close bnoble]

Agreed. In the short term, consolidation and capacity reduction has done wonders for price support. In the past, eventually one of the airlines has blinked and increased capacity to "capture market share". It never works, and instead starts a race to the bottom. With fewer players in the game, the chances that any one of them is an idiot is lower.

I am expecting to pay a non-trivial increase in airfare costs for at least the next few years. As the world-wide economy improves, that will only get worse, as it will increase demand for travel *and* for oil, a double whammy.

[Carolinian Super Moderator Find all posts View Profile Close Carolinian]

Consider that:

3. In the world-wide move to limit greenhouse gas emissions, fuel combusted in aviation is a prime target. The strategies that are likely to be implemented will greatly increase the cost of air travel, with the explicit goal of raising prices to a level sufficient to discourage people from traveling by air.

The UK has imposed such a tax (APD) on air tickets of ~$100 for long haul and ~$20 for short haul, for the specific purpose of discouraging air travel. The Netherlands attempted it, but had such a negative reaction they repealed the tax. I posted a link to an online petition against further increases in the APD in the UK.

The EU is currently planning to force airlines into their cap and tax scheme next year, and that will raise fares. They even have asserted it against US based airlines, trying to force them to pay it, too, but the US based airlines are suing to stop that. Once the EU imposes that scheme, then it will probably create a real incentive to plan your European trips to land in one of the European countries which is not in the EU like Switzerland or Norway or even Russia. Heck, it might even create an incentive to develop TATL air routes from Jersey or Guernsey, which are also not in the EU (I think the Isle of Man may also be outside the EU), as they would avoid the UK's APD plus the EU's cap and tax scheme. It will be like decades ago when low cost Icelandic Airlines had TATL service only to Luxembourg because that was the only European country then not a party to the treaty regulating air fares. Switzerland, Norway, Russia, and perhaps even Jersey, Guernsey or the Isle of Man may become the new Luxembourg for trans-Atlantic (TATL) low cost air travel.

Further comment on the merits or lack thereof of the global warmist ideology would belong on the Political board, and there is already a good bit of material there if you want to read it.

[Carolinian Super Moderator Find all posts View Profile Close Carolinian]

Agreed. In the short term, consolidation and capacity reduction has done wonders for price support. In the past, eventually one of the airlines has blinked and increased capacity to "capture market share". It never works, and instead starts a race to the bottom. With fewer players in the game, the chances that any one of them is an idiot is lower.

I am expecting to pay a non-trivial increase in airfare costs for at least the next few years. As the world-wide economy improves, that will only get worse, as it will increase demand for travel *and* for oil, a double whammy.

Consolidation is happening on both sides of the Atlantic, and the resulting oligopoly is much less competitive, so that impacts prices. The airline mergers are a dreadful thing for passengers. In Europe, the genuine LCC's do keep pressure on as to pricing. EasyJet and RyanAir manage to be profitable at fares much lower than the legacy airlines and keep the legacies from raising their prices too high. Southwest in the US has lately stopped being much of an LCC at least as to fares. RyanAir has been talking for some time of coming to North America, and if they do, then the legacies will find out what REAL LCC fares are like!

[T. R. Oglodyte Moderator Find all posts View Profile Close T. R. Oglodyte]

The UK has imposed such a tax (APD) on air tickets of ~$100 for long haul and ~$20 for short haul, for the specific purpose of discouraging air travel. The Netherlands attempted it, but had such a negative reaction they repealed the tax. I posted a link to an online petition against further increases in the APD in the UK.

...

Further comment on the merits or lack thereof of the global warmist ideology would belong on the Political board, and there is already a good bit of material there if you want to read it.

I was specifically thinking of your post about the APD tax as I was adding my comment.

I also have no intention of getting into the political components of the climate change debate. But it is fact that the initiatives that are being seriously considered (and even implemented, as with the APD) will increase the cost air travel with the goal of reducing CO2 emissions in the aviation sector. I do not mention that with the intention of opining one way or the other on that topic; I'm merely noting that is the current situation and the costs or air travel will increase with the extent and scope of such measures as they are implemented.