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Analyst Says, Airline Travel is “Luxury Good”

September 26, 2008 | Posted in: Airline News,Forecast

Saw this article in BusinessWeek, and wondered if you had the same take as I did.

An analyst from Stifel Nicolaus & Co. (who just announced this week they would be covering airlines) said airlines will likely be profitable over the next couple of years, because of all the things they’re doing, including capacity cuts.

But he also says, the high fuel prices will help make airline travel a “mid-priced luxury good”.

Joe Sharkey also seems to agree about this prediction of travel only for the “rich”.

If this premise is actually accurate then their could be a big problem as it was noted recently that “premium airline traffic” is down with the suit and tie crowd as the financial meltdown continues.

I agreeairfares are getting higher, i see tens of thousands roll buy a day,but I believe air travel will continue to be part of the fabric of our lives – for business and leisure. I am not buying into this concept quite yet. The trick for road warriors and vacationers will be to find the bargains – but then, that’s why there’s FareCompare.com – try us and see.

One Response to “Analyst Says, Airline Travel is “Luxury Good””

  1. mwarden says:

    Rick, I agree. This guy is not the first to say that air travel will become a luxury service, and every time I hear it I hear quotes in my head like “my business just doesn’t work without face-to-face meetings”, etc. from the suit and tie crowd. The business I’m in would suffer significantly if we suddenly stopped traveling by air. It would have to reorganize completely, open new offices, drop certain clients, etc. I just don’t see it happening.

    I do wonder if perhaps they are just talking about leisure air travel.

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