Kirby thinks airfares should be double
#1
Suspended
Original Poster
Join Date: Oct 2004
Location: Bay Area
Programs: DL SM, UA MP.
Posts: 12,729
Kirby thinks airfares should be double
#2
Join Date: Sep 2006
Location: HNL
Programs: UA GS4MM, MR LT Plat, Hilton Gold
Posts: 6,447
I think it is hard to disagree with him.
Airfare isn't much different than the 90's - and since prices haven't kept with rising costs, things get cut - like your seat in economy - food - good champagne, etc....
You can't provide the same things you did in the 90's (or earlier) and charge the same amount of money.
Airfare isn't much different than the 90's - and since prices haven't kept with rising costs, things get cut - like your seat in economy - food - good champagne, etc....
You can't provide the same things you did in the 90's (or earlier) and charge the same amount of money.
#4
Join Date: Sep 2014
Posts: 553
I don't think there is any reason that the airline industry should receive a fixed percentage of the GDP. But I am not an economist.
There is nothing stopping him from doubling fares if that's what he chooses to. I suspect you may a few more empty middle seats than normal!
One thing pointed out is that “in the last 30 years airline revenue as a percentage or GDP has gone to about .6 from about 1.2%.” The conclusion [Kirby] draws is that airfares should double, “we are under pricing our product by 50%.”
#5
Join Date: Mar 2005
Location: MSY
Programs: AA Plat Pro, UA Plat, VS Silver, Marriott Titanium, Hyatt Explorist
Posts: 2,531
Considering the amount of consolidation and bankruptcy in the industry over the last 30 years, I'm actually surprised fares haven't doubled.
In 1988 your legacy carriers were DL, NW, UA, AA, TW, PA, EA, and CO (ish -- they were a mess in '88, less than two years removed from bankruptcy #1 and well on their way to their second bankruptcy in five years). Plus Southwest was out there making the southwest effect a thing.
Down to three legacy carriers and fares are still pretty reasonable. I guess despite it all, there still is competition in the aviation marketplace.
In 1988 your legacy carriers were DL, NW, UA, AA, TW, PA, EA, and CO (ish -- they were a mess in '88, less than two years removed from bankruptcy #1 and well on their way to their second bankruptcy in five years). Plus Southwest was out there making the southwest effect a thing.
Down to three legacy carriers and fares are still pretty reasonable. I guess despite it all, there still is competition in the aviation marketplace.
#6
Join Date: Apr 2017
Location: Bay Area - East Bay
Programs: UA 1k, AS 75k, Marriott Platinum, Hyatt Explorist
Posts: 641
So....Kirby seems to think that airfare should be proportional to the relative growth of every other industry? Because, you know, individual industries always underperform the market because their prices are too low. This is the dirty secret economists have been keeping from you for years, they solved this simple relationship generations ago and have just been faffing about, publishing the occasional paper with some random symbols and made up words like 'endogenous' to keep the charade going!
#8
Join Date: Nov 2017
Posts: 3,359
Considering the amount of consolidation and bankruptcy in the industry over the last 30 years, I'm actually surprised fares haven't doubled.
In 1988 your legacy carriers were DL, NW, UA, AA, TW, PA, EA, and CO (ish -- they were a mess in '88, less than two years removed from bankruptcy #1 and well on their way to their second bankruptcy in five years). Plus Southwest was out there making the southwest effect a thing.
Down to three legacy carriers and fares are still pretty reasonable. I guess despite it all, there still is competition in the aviation marketplace.
In 1988 your legacy carriers were DL, NW, UA, AA, TW, PA, EA, and CO (ish -- they were a mess in '88, less than two years removed from bankruptcy #1 and well on their way to their second bankruptcy in five years). Plus Southwest was out there making the southwest effect a thing.
Down to three legacy carriers and fares are still pretty reasonable. I guess despite it all, there still is competition in the aviation marketplace.
Safe Travels,
James
#10
FlyerTalk Evangelist
Join Date: Dec 2003
Location: LAX
Posts: 10,908
I think it is hard to disagree with him.
Airfare isn't much different than the 90's - and since prices haven't kept with rising costs, things get cut - like your seat in economy - food - good champagne, etc....
You can't provide the same things you did in the 90's (or earlier) and charge the same amount of money.
Airfare isn't much different than the 90's - and since prices haven't kept with rising costs, things get cut - like your seat in economy - food - good champagne, etc....
You can't provide the same things you did in the 90's (or earlier) and charge the same amount of money.
Aircraft fuel efficiency nearly doubled since 1980 and fuel consumption further decreased with software use in planning. Reliability increased as well.
Far fewer staff is employed per pax.
Airfare is no longer bundled with all sorts of junk costs.
Kirby is not saying pay double and we ll bring back the level of service of the past. I read it as pay double and if we can get away with it we will keep the extra cash.
#11
Join Date: Nov 2017
Posts: 3,359
I am not convinced.
Aircraft fuel efficiency nearly doubled since 1980 and fuel consumption further decreased with software use in planning. Reliability increased as well.
Far fewer staff is employed per pax.
Airfare is no longer bundled with all sorts of junk costs.
Kirby is not saying pay double and we ll bring back the level of service of the past. I read it as pay double and if we can get away with it we will keep the extra cash.
Aircraft fuel efficiency nearly doubled since 1980 and fuel consumption further decreased with software use in planning. Reliability increased as well.
Far fewer staff is employed per pax.
Airfare is no longer bundled with all sorts of junk costs.
Kirby is not saying pay double and we ll bring back the level of service of the past. I read it as pay double and if we can get away with it we will keep the extra cash.
#12
FlyerTalk Evangelist
Join Date: Aug 2005
Location: BOS/EAP
Programs: UA 1K, MR LTT, HH Dia, Amex Plat
Posts: 32,026
This is such b.s. In the 90s there was free food in coach, no checked baggage fees or other ancillary charges ... and here just base fares are compared, Let's review what UA makes money on these days ... if they dial that back ... sure, raise airfares.
#13
Join Date: Nov 2017
Posts: 3,359
-James
#14
Suspended
Join Date: Aug 2017
Programs: Rapid Rewards, AAdvantage, SkyMiles
Posts: 2,931
Kirby as always doesn't know what he's talking about. And for those of you saying "airfare is as cheap as it ever was", you're lying. The cheapest time for airfare was in the 2002-2014 time-frame, depending on the airline. Most of the time with those fares you would get a carry-on bag, seat assignment (including exit rows on certain airlines 24 hours before checkin), and the fees for changes/checked bags were cheaper than they are now. Airfare is even more expensive today, with the "basic economy" fares becoming those new base 2002-2014 fares and the "regular economy" experience being in the $20-$50 range higher on domestic flights.
#15
Join Date: Nov 2017
Posts: 3,359
Kirby as always doesn't know what he's talking about. And for those of you saying "airfare is as cheap as it ever was", you're lying. The cheapest time for airfare was in the 2002-2014 time-frame, depending on the airline. Most of the time with those fares you would get a carry-on bag, seat assignment (including exit rows on certain airlines 24 hours before checkin), and the fees for changes/checked bags were cheaper than they are now. Airfare is even more expensive today, with the "basic economy" fares becoming those new base 2002-2014 fares and the "regular economy" experience being in the $20-$50 range higher on domestic flights.
Safe Travels,
James