mgoes2

I've been searching airfares for travel between S. FL and Cal. If I traveled on the right days, I used to get RT $200 or so. The cheapest I'm finding now on Spirit, which I'm not comfortable with, is $450 RT, airlines I would use are $550 +. Not sure if it's worth cashing in FF miles or just paying these high fares...or waiting it out until the last minute to see if they go down or not. Ugh.

airplanegod

Airfare isn't necessarily high (although it sure does seem like it), but I do think it is too high for what you are getting.

Hengilas

You're not doing something right...I just flew LAX-MIA-NAS return for $430 on AA...if I look right now for LAX-MIA return I am getting fares in the low 300s on AA throughout Aug and Sept. I personally think air travel is dirt cheap right now, just look at some of the fares in the mileage run forum! I grabbed a LAX-GRU for $465 return in a couple weeks. That's ridiculous!

boybi

I know fuel cost comprise a huge percentage in an airline's operating costs, but why didn't ticket prices reflect the drop in fuel prices?

bigshooter

People are still paying for the tickets at this price level so no incentive for airlines to drop them... They'll take the additional profit as long as people continue to buy.

LondonElite

Demand/Supply, rather than cost-plus is the business model.

schranerli

Seems people are willing to buy and seat occupation is good, so no incentive for airlines to lower the ticket prices. More money for stack holders...

BearX220

Because with reduced competition and capacity they don't have to. If you were in the cookie business, and selling every cookie you made every day at $2.00 per cookie, why would you drop your price to $1.00 per cookie? Regardless of the cost of your baking ingredients.

airplanegod

Airlines unfortunately (for passengers) and fortunately (for management and stock holders) have learned capacity control. Good in some ways because it might mean more frequencies and larger RJ's (E175's compared to CRJ-200's) but bad because that means the ticket prices won't go down much and in some cases frequencies are cut/smaller aircraft (as in less domestic widebodies).

LarryJ

Because the airplane's are (nearly) full. A business does not lower prices when they are already selling out their supply of product.

The way that lower costs lead to reduced fares is that airlines will add more capacity (they already are doing so) due to the lower costs. When this additional capacity comes online the fares will drop to keep it (nearly) full.

A restaurant or supermarket can make quick adjustments in supply when their costs, or market demand, changes. It takes a lot of time and money to acquire new (or used) airplanes or to economically remove aircraft from service. New aircraft also come with long-term commitments so an airline must be convinced that it will be able to deploy the new capacity profitably for the duration of that commitment.

In the case of current fuel prices, there isn't any guarantee that the current low prices will last for an extended period of time. In fact, the chances are good that fuel will be significantly more expensive than today when any aircraft ordered today are delivered.

Hengilas

Airfares are high? I can hardly remember them ever being this cheap.

BearX220

There's been a slight dip this fall, but US fares rose 31 percent 2009-2014, commensurate with reduced competition and capacity:

http://wjla.com/news/business/airfar...l-costs-109458

KoKoBuddy

When the price of coffee drops 30%, does Starbucks lower the $6 cup of coffee by 30%? No.
Works the same way for airlines and fuel.

Tchiowa

A lot of people don't get this. This is called "The Market". As long as customers are willing to pay the price you're asking then you're asking the right price. In fact, with planes flying full there is an incentive to raise prices a bit more.

Air line tickets are never priced on a "Cost Plus" basis. This is the same argument that the Hidden City flyers like to use. But it's not true. Tickets are priced on the "whatever the market will bear" basis. And that is not a negative. It's a good thing.

ft101

Lies, damn lies and statistics.

Look at the 10 years before that, and don't think that US fares are necessarily representative of elsewhere.

http://www.planetickets.com/airfare.html