So many of us have been appalled at the prices we're seeing quoted for summer airfares this year. (For example, in my MSP market typically the lowest published summer fare to Paris or Frankfurt is about $450-500; this year it is closer to $900.) I know fuel is terribly expensive, so that is a factor. But is a shortage of flights also a factor so airlines can charge whatever they want and know people will just have to pay the prices? Has transatlantic travel taken an upswing and the airlines haven't added capacity? Or, are these just the prices they are hoping to get people to pay?

Is there anyone out there who really knows the answer to this rather than just speculating as most of us are? Or, has anyone read anything from a credible source that can shed some light on this?

I am still playing the waiting game looking for mid to late June travel and hoping that things might shake out a little more favorably for me as far as airfares go.

I suppose you've done the "search" on this and found the jillion entries but to add to the old refrain:

nobody ever knows for sure if there will be a sale

airlines have decreased capacity

this is 2006..don't expect the prices you saw a few years ago..OK..go ahead and expect them and continue to be disappointed

With the greatest of respect I doubt anything has changed since you posted your last entry on this same subject.

I think you're confusing the low prices that ensued from the dropoff in traffic following Sept. 11 with "normal." Actually, according to US Dept. of Transportation statistics, air travel prices have grown more slowly (in percentage terms) over the past 10 years than almost any other cost item. In relative cost terms, the increases have been something like 2% annually. Meanwhile, over the past two or three years, all the costs the airlines have to absorb - fuel, labo(u)r, capital financing expenses - have gone through the roof. Many airlines are in, or close to, bankruptcy. So if they discover that the market is prepared to pay more (and evidently it is - load factors are up) then they will try to get healthy after years of struggle.

Of course it's a bit of sticker shock when you perceive that fares are suddenly several hundred dollars more than before, and it's wise to shop. But I don't think one should assume that this is a spike; rather it's a return to something akin to normalcy.

<< ... is a shortage of flights also a factor so airlines can charge whatever they want and know people will just have to pay the prices? Has transatlantic travel taken an upswing and the airlines haven't added capacity? Or, are these just the prices they are hoping to get people to pay? >>

Well, I am not an expert, in the sense of a professional who studies trasatlantic airfares for a living... but I think I am one of (many?) dozens of "regulars" here who has enough experience to give an opinion.

Failure to add capacity? No, I think that the answer is that capacity has been reduced to (just) meet demand. Adjusted for inflation, air fares are about one-fourth of what they were 25-30 years ago; not all of them, of course, but the most deeply discounted fares are/were incredibly below cost. This happened because capacity got way ahead of demand; remember... when an aircraft with six seats across has the middle seats empty on both sides of the aisle - - then that means that capacity exceeds demand by a full 50%. Have you ever been in a grocery store, or furniture store, or jewelry store... where everyday, they put 100,000 new items on the shelf - - and they had to discard one-third of their inventory at the end of every day as something that has NO resale potential? If this kind of supply ever occurred in retail, then you would indeed see sales at 60, 70, even 90% off as the airlines commonly do (did... before they started getting serious about cutting back capacity).

I think that the <i><b>average</b></i> fare paid in any given route market has risen 10-30% in the past year, and this reflects not only fuel, but every other cost of running an airline.

You are focused on that anomalous bottom 5-10% of fares - - in your own words... the &quot;lowest published&quot; fare. They ARE far less frequently seen, they may appear literally for only a few hours on sporadic occasions, and when they do exist... they simply aren't as deeply discounted as they used to be. Because they don't have to price them so low, when planes are moving towards 95-100% of their seats full.

Want to try to do something to bring prices back down? Talk less enthusiastically about the joys of overseas travel. Demand drives price, and price drives supply.

Best wishes,

Rex

Frankly, one of the reasons I am confused about this issue is the inconsistency in the fares I am seeing. Lowest published fares to the Baltic countries and/or Poland (which is where I am trying to end up) are almost exactly the same as I have seen for the past few summers. It is the usual much more competitive markets (London, Paris, Frankfurt) that are priced much more highly than in the past. This is the part I don't get.

I can actually understand why fares to the Baltics are a lot more (they are a lot further away), but those typical lower cost destinations are now suddenly almost in the same league as far as price.

I also think I am one of those who has actually been able to capitalize on those lowest published fares a number of times in the past. That's the other reason this season's prices seem so high to me.

All the prices I see are significantly higher than even last year. Everyone I know is going to Prague this summer, simply because it's cheap!

I don't know where you live, julies, but would encourage you to go to the www.clarkhoward.com

site and check out those deals. His travel tips are usually geared exclusively toward the Atlanta market/traveler, but you'll find that a sale previewed there becomes systemwide. Clark Howard is a &quot;consumer guru&quot; who owned a travel agency for many years, so while he deals with all kinds of consumer questions his special interest is travel.


and I actually did preview this post but can't make that darned second url disappear---sorry!

Okay--the &quot;second&quot; url disappears when the post is actually posted. It's been awhile since I used a website in a post and didn't realize how it now works.

The largest expense item for the airlines is fuel. So their entire business model is pushed this way and that by spot and futures market prices for oil.

If you can predict what North Sea Brent crude will cost in July, I'll tell you what to expect to pay for a flight.

I'm looking at some late spring/early summer fares from Orlando to Europe for my mother (non stops preferred). While the usual suspects (BA, Virgin, etc.) were asking prices of about $680 plus fuel surchages, taxes, etc. But LTU was offering nonstops from MCO to Dusseldorf for about $550 all in. Not dirt cheap, but very reasonable.

I'd never heard of Clark Howard, but will gladly check him out. I already subscribe to airfarewatchdog and smartertravel newsletters. Is the Atlanta market sewn up by Delta? I'm from Minneapolis, and that's one of the primary problems with our market; NWA dominates the hub.

Back to the main point of this thread however: I've even looked at fares from NYC and Chicago this summer thinking this might be an option. They are also much higher--everything across the board in all markets seems to be this way. That's why I posted my question.

I do think that fares are higher this year. But there was a thread here regarding a Virgin sale from JFK to LHR for $413 (all in) a few weeks ago that applies even to peak weekends.

I just flew to London for the past weekend for about $440. It's not high season, but the fare was still $440 on Virgin's website on the day I flew. I could have waited until the very last day to buy my ticket (I had bought it earlier in the week, as it was a last-minute decision to fly over).

Last year I also found last-minute fares to London on Virgin for the summer.

However I don't think that you can afford this kind of risk if you're attending your son's wedding.

Yes. It's the summer I'm concerned about because winter airfares are fantastic. We just came back from Paris at $380 a person roundtrip taxes included. This was .50 more than tickets for the same dates to Phoenix.

This is why I am wondering if it is load factors more than fuel costs. Obviously, the airline probably didn't make a cent on our Paris trip. But, they came out ahead of where they would have been if we hadn't filled those seats.

It must be something much more than fuel costs.

We are now thinking about going to Alaska instead of the Benelux countries.

Both are about the same flight miles from the Baltimore-Washington area, but the best fares we've been able to find for June-July travel to Amesterdam arein the $850-$950 range; while about the same distance to Anchorage has fares in the $525-$575 range. I know there are international taxes as well in the trans-Atlantic fares, but that is quite a difference for the same mileage. And Alaska is an interesting destination.

The airlines have (always had) Operations Research departments whose job it is to maximize the revenue on every flight by manipulating how much is charged for what accommodation and how far in advance it is sold.

The entire exercise is driven by the total cost of doing business and the historical precedent for demand on the flight in question, taking into account season, day of the week, time of day, and any other factor affecting demand that can be quantified.

If I ran an airline, I'd cut capacity until every flight went out jammed to the gunwales with full-fare passengers.

Distances don't matter, and be careful what you ask for. Let's say a 200 mile flight from Tampa to Miami R/T is $100, and let's be honest, that's what it would be, and has to be be, and it should be, multiplied by Tampa to London at ~4000 miles, and guess what? it's a $2000 trip at the cheapest fares if your theory of distances mattered.

That explanation aside, <b>Gardyloo</b> explained the rest very clearly.

Do you really want this?

Yo, AAFF - how was IPC?

julies, you might be interested in going to www.usatoday.com and clicking on their travel section. There is an article about this with the strong suggestion to book now as fares will continue to rise.

I'm in Vina Del Mar at the moment. IPC is happening on Wednsday. I will try to report the entire Chile experience once I'm done.

Just a little teaser. <b> I'm more than little impressed</b>

I'm a bit confused AAFF--I went back and read Gardyloo's posting, and I don't see anything about distances.

read the post by the OP:

<i>I can actually understand why fares to the Baltics are a lot more (they are a lot further away), but those typical lower cost destinations are now suddenly almost in the same league as far as price</i>



Nothing to do with <b>Gardyloo</b>. I was just answering his question....