Has everyone lost their mind this week?
A parade of travel pundits has evidently gotten so frustrated with air travel that they’ve all pulled out their inflation calculators and decided we should be paying $2000+ for our airline tickets, in order to get “a better air travel experience”. Here’s what I mean:
The basic premise of these posts is that – if passengers just paid more for airlines tickets, things would be different (better).
If we all forked over more greenbacks:
- Airlines wouldn’t rank below the IRS for customer satisfaction
- The bevy of new and increased airline fees wouldn’t exist
- We would all be singing Kumbaya at the airport on the Sunday after Thanksgiving
Keep reading – I’ve got a lot more to say…
Ok, these posts are intentionally provocative (they got a link from me 
) – I get it, but let’s get real here.
I wish I had a dollar for every time I’ve heard or read about airline executives and now pundits who trot out the old “inflation argument” – how that 30 cents-a-gallon at the pump is now $3 per gallon – and equate it to airline ticket prices.
This is where I’m supposed to rant about $3,000 laptops now available for 400 bucks, but I won’t.
I think it is pretty clear that commercial air travel has come a long way since the government set ticket prices – back in the days when rooms full of operators took reservations by phone and dropped marbles into glass jars representing the various flights and how full they were – all the while scribbling out tickets and handing them off to the Pony Express riders.
And today, I think most passengers have simple needs, namely, a cheap, timely flight from an orderly airport with all personal items intact at arrival.
I picked out the words in that last sentence very carefully because it is packed with time bombs, like “cheap”, “timely”, “orderly” and “intact” – and when I say bombs, I mean if any of those things don’t happen, people will complain vociferously.
Airlines have recently taken it on the chin financially mainly due to factors outside their control, including the fuel crisis of 2008 and the recession of 2009. I would also point out, however, that during the Internet Bubble of the late 1990’s, the opposite was true – but notice tickets didn’t cost $2000 then, either.
Airlines have participated in the past decade’s migration of the bulk of air travel sales to the internet – and watched and competed heartily as shopping for airline tickets has become a daily Cyber Monday for savvy shoppers (especially since travel agents have gone the way of the abacus).
Until airlines figure out a business model where two people sitting side-by-side who get the same basic product pay the same price – meaning, one isn’t paying $1,000 for a seat while the other pays only $100 – and assuming we actually achieve the previously mentioned timely, orderly flights (with intact bags!) and/or we get those bag fees rolled back into ticket prices, there are going to be complaints. And certain airlines will handle them better than others.
The bottom line: airline ticket prices are set on a given route, based on competition, supply-and-demand, and – if airlines are willing to sell them below cost on a certain route to a handful of travelers, great.
If the goal of these writers is to go back to the pre-deregulation days of the 1970’s, then flying will become a mode of transportation solely for rich – and that would be a shame.
What is a fair price for airline tickets?
A good question was asked, “Should trans-continental flights cost $98 roundtrip? What do you think a fair price is?”
First let me respond by saying that, 100% of all air travelers want to pay the cheapest price, in reality less than 10% will actually do so.
When/if airlines do offer, $98rt coast to coast airfares, does anyone believe that the 137 people on board paid $13,700 in total?
Of course not, only a handful of those people pay the $98rt amount (regulations require 10% of seats be made available for “advertised” prices on flights, but I am not aware of any government audits lately).
Most major airlines quoting systems use a sophisticated set of price points based on competition on a particular route that segregate leisure and business travelers along with closely controling seat inventory using “yield management”, which looks at hundreds of variables like past history, days before departure and how well things are selling now to decide which price point to release at any given moment before departure.
Ticket purchasers contemplate dozens of factors when deciding on a fair price including budget, alternate destinations, convenience and urgency. A fair price happens hundreds of thousands of times each day when consumers hit submit after putting in their credit card number.
For a more in-depth discussion of fees, see my Flyer’s Guide to Air Travel Fees; and for a specific response to “Memo to Airline Passengers” see a “Jerry MaGuire Moment”.
