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Why Your Airplane Ticket is So Expensive

Why Your Airplane Ticket is So Expensive

Old Aug 24, 13, 3:55 am
  #1  
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Why Your Airplane Ticket is So Expensive

Everyone is always looking for the cheapest flight. And while there are ways to get cheaper airfare, the age of rock bottom prices are simply over. If you’ve been flying for at least the past few years, you might have noticed ticket prices, even the cheapest ones, seem to be going up and up. Save some flash sale or price war, consumers are simply paying a lot more than they used to. If you really want rock bottom prices, you’ll need to invent a time machine and go back ten years. (Don’t forget to take me with you!)
Ticket prices are high today for a number of reasons. For starters, the industry has consolidated a lot over the last few years. Less competition means less need for cheaper prices. Thanks to bankruptcies and mergers now there are only 4 major airlines in the US (soon to be three when American merges with US Airways). In Canada, you have 2. In Europe, KLM and Air France are now one company, and Lufthansa has its hands in many smaller airlines. (While budget airlines keep prices cheap within Europe, once you leave the continent, those 10 Euro prices disappear!) As airlines have partnered up, merged, or gone bankrupt, there is little incentive or need to create low fares to win your business.

Secondly, the price of airline fuel has increased tremendously. Back in 1996, airline fuel cost 55 cents per gallon. Now, it’s $2.97 per gallon. Airlines can’t absorb all of that increase, so they pass some of that on to the consumer, leading to higher fares.

Additionally, airline taxes and security fees have also increased, adding a lot of money onto your base fare. Currently, the following fees are added to the cost of your ticket:

September 11th Security Fee of $2.50 (up to a maximum of $10 per round-trip).
Passenger facility charges of $4.50 per segment (up to a maximum of $18 per round-trip).
US Federal Domestic Segment Fee of $3.70 per segment.
US Travel Facilities Tax of $8.20 per direction (only applicable to flights to/from Alaska and Hawaii and the 48 contiguous US states or between Alaska and Hawaii);
US Immigration User fee of $7.
US Customs User fee of $5.50.
US APHIS User fee of $5, US International Transportation Tax of $16.30 per arrival or departure; and Foreign Government security/tourism/airport/international transportation taxes and fees of up to $290 (varies widely by destination and fluctuates with exchange rates).
Read the full, longer article: http://www.nomadicmatt.com/travel-bl...nsive-airfare/

Last edited by sfx; Aug 24, 13 at 11:38 am Reason: Posted for other member's interest. Quotes are not an endorsement. Quotes may not represent my personal or professional views
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Old Aug 24, 13, 9:51 am
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there are only 4 major airlines in the US (soon to be three when American merges with US Airways)
Yes, except author leaves out the LARGEST domestic carrier by passenger number in US: Southwest.

And for anyone paying the least bit of attention, none of that is news @:-)

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Old Aug 24, 13, 9:52 am
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These articles seem to come up every so often. Just reading the quotes you posted, this one also seems to miss the fact that a 2013 dollar is not the same as a 2003, 1993, or 1983 dollar...
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Old Aug 24, 13, 10:18 am
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~30% devaluation from 2000, I believe.
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Old Aug 24, 13, 1:39 pm
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Why Your Airplane Ticket is So Expensive

The fact that so many airlines have gone bankrupt shows that prices were too low. Nobody likes higher prices but they have to be kept at a level which sustains the airlines.
Bring on the low cost revolution, flew Easyjet this morning, couldn't fault it. Competition is good.
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Old Aug 24, 13, 3:36 pm
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The other night, was looking at 29 RTN Edinburgh to Szczecin for a weekend break in September. Lots of bargain flights if you look.
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Old Aug 26, 13, 4:49 am
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And an article today that UK flights are too cheap!
http://www.independent.co.uk/travel/...d-8784312.html
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Old Aug 26, 13, 2:44 pm
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Is this really news?

If you have flexible travel plans, flexible dates you can still get good flight prices, however.
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Old Aug 28, 13, 1:31 pm
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I've said this elsewhere on FT, so will be brief.

Since the airline consolidation, most notably the UA/CO merger, TATL prices out of Houston have rocketed. When I last booked, in June for October, it was about $200 cheaper to fly LCH-LHR (via IAH) than it was to fly the same flights without the LCH-IAH leg.

Is this because LCH-???-IAH has effective competiton? (AA/BA via DFW vs UA via IAH) A few years ago, when you looked for IAH-LHR/LGW you had the choice of AA via ORD/MIA, UA via IAD/ORD, NW via DTW/MSP, DL via ATL/CVG and then BA or CO direct for a little extra. All those options have disappeared now.

The conspiracy theorist in me thinks that AA/DL may have just agreed to let UA "have" TATL from Houston so they only compete with the destination nation's Flag Carrier. The old Supply and Demand system raises the price.

In 10 years, the price has tripled, and what you get for the higher fares has decreased. And I will refrain from having my rant about changing the pmCO 772 on IAH-LHR to a pmUA 763.
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Old Aug 28, 13, 2:24 pm
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that is what the top article is about
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