October 11, 2018
Are the Good Times Ending for Cheap Flights?
Are the Good Times Ending for Cheap Flights?Recently I asked a U.S.
airline executive whether these are the best economic times in
history.He laughed. Someday, he said, we may look back and think so. But
now that we’re in it, he said, it’s difficult to have perspective.
Because investors always demand higher profit and better margins, few
executives can stop to enjoy the moment.Jieyang to Bangkok flightsPassengers
have a similar inability to embrace good times. For the past three
years, many have complained about onerous fees and high fares. That’s
true in some smaller and less competitive markets, like Knoxville,
Tennessee, or Salina, Kansas. But between big cities, fares have been
cheap, often as low as $39 or $49 each way for short-haul travel.
Passengers have even scored deals on last-minute fares.We’re seeing less
discounting now, and I suspect passengers will soon realize how good
they had it in 2016 and 2017, when fuel was cheap and established
airlines fought to keep customers from defecting to ultra-low-cost
competition.As I wrote Tuesday, U.S. carriers are so spooked by higher
oil prices they’re moving to cut marginal flights. They’re not shrinking
— the economy is too strong — but they’re seeking to improve pricing
power. Airline pricing is complicated, so it’s challenging to predict
how much fares will rise, but they’ll likely go up.U.S. Airlines Hope to
Charge Passengers More as Fuel Prices Climb: The good times are likely
ending for U.S. consumers, as airlines limit capacity growth so they can
push fares higher. At first, look for flights at marginal times of the
day to disappear. "The fact is there are many activities that make sense
at $45 a barrel of oil, which no longer make sense at $75 per barrel,â€
American Airlines CEO Doug Parker said last week.
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