Why airline tickets cost so much these days

Matthew Kepnes, who runs a budget travel website called Nomadic Matt, wrote an article explaining why airline tickets cost so much these days, what leads to their price increases, and what consumers can do to find cheaper flights.

With fewer planes, less competition, and higher capacity, airlines can charge a lot more for tickets. There’s nothing to stop them and they don’t need to lower prices. United CEO Jeff Smisek said that only now are airfares priced appropriately. When you have a CEO say something like that, it means prices are not going to go down anymore, but only up.

According to Rick Seaney of farecompare.com, “Before 2008, things were in the favor of the passengers. After the 2009 crisis, the scale of justice tipped towards the airlines.”

Why Your Airplane Ticket is So Expensive

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  1. While it sucks paying more, on a global basis carriers run on margins +/- 1%, which has led to the spate of bankruptcies and subsequent consolidation. In this case deregulation has been wonderful and driven costs down near the minimum. Even with the recent fare raises it's likely to stay there. The oil producers are getting a lot richer than the airlines.

  2. I think it's odd he cast the conversation in terms of justice. Should we think of air travel as a right, of which evil airlines are depriving us? I've always thought of it as a business transaction, and it's a ripoff and an exercise in humiliation, and next time I fly there better be a million dollars waiting for me. But I've never seen it as a matter of justice, like jobs or voting or race.

  3. Average airfare in real dollars has decreased every year for 30 years, from about $600 (2012 dollars) per ticket to about $350 today. At the same time, distance traveled has increased, jet fuel price has nearly tripled, and access to travel has improved (more tickets sold). Airlines operate on razor thin margins and prices continue to be driven lower by low cost carriers like Southwest and JetBlue gaining market share. The question is why airline tickets don't cost so much these days.
    Ticket Prices: http://www.airlines.org/Pages/Annual-Round-Trip-Fares-and-Fees-Domestic.aspx

  4. I look at it in a similar way. I'd like my air travel at a reasonable price, but I'm not looking for rock bottom cutting all corners pricing. I'm choosing to lock myself into a several hundred ton paper weight that hopefully doesn't have anything go mechanically wrong with it while I'm thousands of feet in the air. The people who maintain and fly these machines need to be paid appropriately.

  5. I travel a lot and I would gladly pay more for my ticket if I could get back even slightly better service in return.

    The anger expressed these days is not just because ticket prices are going up - it's that they are going up while at the same time service continues to sink into the sewer - tiny "regional" jets on longer routes previously served by bigger planes; passengers packed in like sardines with horrible, terrible service - surly flight attendants, rude gate agents, no meals, no pillows or blankets anymore, outrageous baggage fees; The list goes on and on and on....

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