Experts say that flying will only be for business travelers and the elite in a few years
May 27th, 2008, 06:54 AM
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Experts say that flying will only be for business travelers and the elite in a few years
Lost in the discussion about the $15 fee for checking a bag is the plan by most of the major Airlines are planning sharp decreases in the number of flights starting this fall. Their plan is to limit the number of available seats so they can control prices.
The plan is to be able to raise fares by up to 50%. So the $350 fare to Orlando will now be $500. Combine that with rising car rental and gasoline costs and you will see a sharp decrease in the number of middle class leisure travelers.
As fuel and airfares continue to rise the average traveler by plane will be business travelers and the wealthy. Most of us will be forced to stay home.
Are you prepared for a more 1950s lifestyle?
The plan is to be able to raise fares by up to 50%. So the $350 fare to Orlando will now be $500. Combine that with rising car rental and gasoline costs and you will see a sharp decrease in the number of middle class leisure travelers.
As fuel and airfares continue to rise the average traveler by plane will be business travelers and the wealthy. Most of us will be forced to stay home.
Are you prepared for a more 1950s lifestyle?
May 27th, 2008, 07:13 AM
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Who are these experts?
If recent history has shown us anything, it is that there will always be somebody who thinks they can make money in the airline business. Somebody, be it Airtran or Southwest or JetBlue or some new carrier, will likely try to step in. Who knows, maybe one of those people will actually be smart enough and disciplined enough and free from the baggage of decades of poor choices to actually make money at it.
If recent history has shown us anything, it is that there will always be somebody who thinks they can make money in the airline business. Somebody, be it Airtran or Southwest or JetBlue or some new carrier, will likely try to step in. Who knows, maybe one of those people will actually be smart enough and disciplined enough and free from the baggage of decades of poor choices to actually make money at it.
May 27th, 2008, 07:46 AM
#4
Boy, if the airlines have people on their staffs that can do that sort of long-range planning, where the hell have they been hiding?
Since we're generalizing here, I think this whole kafuffle is due to collective short term memory dysfunction.
Airfares fell like rocks after September 11, and in terms of constant dollar costs (i.e. inflation-adjusted, 1980-baseline) average airfares are cheaper than they were 25 years ago - in some cases lots cheaper, like 50%.
Fuel, labor, capital and consumable prices - in real terms - have meanwhile climbed, in some cases dramatically. One of the other side effects of Sept. 11 and the subsequent fall in ridership was that aircraft that would have been retired, especially older planes that are fuel-inefficient, couldn't be, because working capital vanished. So now the legacy airlines are faced with low "real" revenues, record fuel costs, and outmoded equipment. (Think Detroit in the 60s when European and Japanese imports started eating their lunch.)
The so-called "low cost" airlines, and those who shed old debt and obligations through bankruptcy, are also part of the picture for the time being, although when Southwest's fuel hedge contracts expire we'll see just how competitive they are. Like the majors, their borrowing capacity is in question because of the credit crisis, so fleet replacement for them will also shortly become big issues.
Add it all up and the airlines are in a major squeeze play. Raising fares only works if everybody goes along, and raising revenues through baggage fees or other nickel-dime approaches alienates travelers who got used to post-September 11 prices and who've forgotten that it actually was more expensive, as a percent of take-home, to fly 20 years ago than now. Short-term memory dysfunction.
People need to get used to the idea that they have to pay for what they get, be it at the gas pump, the grocery store, or the airport. If market-pricing of airfare makes it too expensive to travel (or travel as much) by air, and if fuel prices make family holidays in the SUV too expensive, then other things will result.
There never has been a free lunch, and I wouldn't make book that one's on the way now.
Since we're generalizing here, I think this whole kafuffle is due to collective short term memory dysfunction.
Airfares fell like rocks after September 11, and in terms of constant dollar costs (i.e. inflation-adjusted, 1980-baseline) average airfares are cheaper than they were 25 years ago - in some cases lots cheaper, like 50%.
Fuel, labor, capital and consumable prices - in real terms - have meanwhile climbed, in some cases dramatically. One of the other side effects of Sept. 11 and the subsequent fall in ridership was that aircraft that would have been retired, especially older planes that are fuel-inefficient, couldn't be, because working capital vanished. So now the legacy airlines are faced with low "real" revenues, record fuel costs, and outmoded equipment. (Think Detroit in the 60s when European and Japanese imports started eating their lunch.)
The so-called "low cost" airlines, and those who shed old debt and obligations through bankruptcy, are also part of the picture for the time being, although when Southwest's fuel hedge contracts expire we'll see just how competitive they are. Like the majors, their borrowing capacity is in question because of the credit crisis, so fleet replacement for them will also shortly become big issues.
Add it all up and the airlines are in a major squeeze play. Raising fares only works if everybody goes along, and raising revenues through baggage fees or other nickel-dime approaches alienates travelers who got used to post-September 11 prices and who've forgotten that it actually was more expensive, as a percent of take-home, to fly 20 years ago than now. Short-term memory dysfunction.
People need to get used to the idea that they have to pay for what they get, be it at the gas pump, the grocery store, or the airport. If market-pricing of airfare makes it too expensive to travel (or travel as much) by air, and if fuel prices make family holidays in the SUV too expensive, then other things will result.
There never has been a free lunch, and I wouldn't make book that one's on the way now.
May 27th, 2008, 08:05 AM
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I am sick and tired of people that say flying is cheaper in inflation adjusted dollars than 20 or 30 years ago. Most of us were not even adults back then and the prices of years ago has no effect on our decisions on vacations today.
I know the average traveler only has a certain budget to fly and pay for additional costs like hotels and auto transportation. If the costs go to high, we will just use what money we have left, after paying for $5.00 a gallon gasoline, on something else and we will not be able to visit our sister who lives in Ohio all that often anymore.
I know the average traveler only has a certain budget to fly and pay for additional costs like hotels and auto transportation. If the costs go to high, we will just use what money we have left, after paying for $5.00 a gallon gasoline, on something else and we will not be able to visit our sister who lives in Ohio all that often anymore.
Jun 2nd, 2008, 12:07 AM
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Every month we get 6,000,000 more neighbors. Every month the oil barrel becomes less full. Business soon has to eliminate physical travel. Tourists will opt for local travel. Millions have alreadyt done this using their 'second homes'. Economical tourists are now scheduling trips in off-seasons instead of July-August.
Jun 6th, 2008, 05:33 AM
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1) Who friggin' cares if this is a troll?!? If it is, it's at least intelligent.
2) Gardyloo is, for the most part, on target.
3) All things -- including the economy and the airline industry are cyclical. Either we are all going to get used to higher prices for everything, or oil will come down at some point. Either way, the point is that this too shall pass. Look at gas prices in 1970 vs. 1980 . . . I'm sure if you told someone in 1969 what we'd be paying for gas, groceries, etc. in 1980, they'd have fainted. The interesting thing is seeing who can adapt to these often-painful changes, and who can't.
2) Gardyloo is, for the most part, on target.
3) All things -- including the economy and the airline industry are cyclical. Either we are all going to get used to higher prices for everything, or oil will come down at some point. Either way, the point is that this too shall pass. Look at gas prices in 1970 vs. 1980 . . . I'm sure if you told someone in 1969 what we'd be paying for gas, groceries, etc. in 1980, they'd have fainted. The interesting thing is seeing who can adapt to these often-painful changes, and who can't.
Jun 6th, 2008, 06:13 AM
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Adaptation will be interesting, but remember that it isn't simply a matter of getting used to a change in the weather. For some people, it will mean deprivation of something more than a summer hop to Disneyworld or Venice -- it will mean small businesses will have a struggle and family members separated by distance will not see each other. In addition, tourism will suffer where international visitors don't take up the slack.
What's the alternative? Train? Car? Bus?
Seems to me those who think it's ok to have air travel only for business travelers and the elite must be members of one or the other group, without giving much thought to larger implications other than how nice it will be for themselves.
What's the alternative? Train? Car? Bus?
Seems to me those who think it's ok to have air travel only for business travelers and the elite must be members of one or the other group, without giving much thought to larger implications other than how nice it will be for themselves.
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