Why are airfare prices so high, despite low oil prices?
Apr 11, 2015, 1:56 pm
#1
Original Poster
Join Date: Apr 2015
Posts: 7
Why are airfare prices so high, despite low oil prices?
Hi! I'm new here so if this has been talked about before sorry. I've been planning a flight for My wife and me from BQN to JFK in August and the price will Not go below 410 pp r/t. With oil prices Way Down I think that's really expensive. I was just wondering why prices are still so expensive and should I Walt to see if the prices go down or should I book now? Thank you very much for your help.
Apr 11, 2015, 2:25 pm
#3
Join Date: May 2013
Location: Austin, TX
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Supply and demand and market competition.
When you buy it depends on your risk aversion: it may come down but it's likely it will go up since you are looking to travel at the end of summer demand is still high. If you need to travel on set dates and you can afford it, I'd buy it right now instead of waiting.
When you buy it depends on your risk aversion: it may come down but it's likely it will go up since you are looking to travel at the end of summer demand is still high. If you need to travel on set dates and you can afford it, I'd buy it right now instead of waiting.
Apr 11, 2015, 3:57 pm
#7
Join Date: Jun 2010
Location: LAS
Posts: 1,279
You ask why prices GENERALLY high?
People pay the current prices. Therefore, airfare is not generally too high and there is no reason why for this non-existent situation.
This "it's too expensive" complaint reminds me of people bellyaching about tickets to sporting events. If they sell out the arena, the price can't possibly be too high. UNLESS you want to take the position that a business should deliberately sell something for less than people are willing to pay.
Ding ding. I've had transcon R/T flights that cost less than a single one way 30 mile taxi fare. Compare the OH costs between taxis and airlines, the cost of a taxi versus the cost of a plane, the labor, the pensions, the security, the liability, etc., etc., etc.
IMO, airfare is generally cheap.
This "it's too expensive" complaint reminds me of people bellyaching about tickets to sporting events. If they sell out the arena, the price can't possibly be too high. UNLESS you want to take the position that a business should deliberately sell something for less than people are willing to pay.
IMO, airfare is generally cheap.
Apr 11, 2015, 7:59 pm
#10
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Apr 11, 2015, 9:42 pm
#11
Join Date: Dec 2006
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Domestic fares are a lot higher these days thanks to industry consolidation, NW & DL, UA & CO, US & AA, WN & FL. Not a single one of these has led to any benefit to consumers, instead now fares domestically are much higher than 5-10 years ago and fees have gone haywire. With little competition and "capacity discipline" its much easier for them to get away with than when we had a much wider choice of carriers. Oil prices have only brought down international fares that used to have big YQ charges.
May 8, 2015, 10:27 am
#14
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Just for background:
Aircraft used for a route like this typically get 100'ish passenger-miles per gallon. So the flight uses about 15 gallons of fuel for your one seat/ticket. Jet fuel prices from a year ago to now dropped about $1. So fuel costs would enable about $15 in savings.
Supply/Demand is a much more powerful influence on price.
May 8, 2015, 11:34 am
#15
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You can't drive, so comparing 1500 miles X 2 at 30 miles per gallon or 100 gallons of gasoline at $3.50 per gallon to get an estimated cost of driving RT of $350 plus two nights hotel in each direction plus your time would be irrelevant. Still, in this case, the hypothetical cost of gasoline for driving (not even counting depreciation on the vehicle or using the IRS rate of about fifty cents per mile) plus four hotel nights makes it look like two RT airfares are roughly the same price as driving costs.