Airfares Finally Going UP, but HOW high?
#1
Original Poster
Joined: Oct 2003
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Airfares Finally Going UP, but HOW high?
We've heard it over and over again, in order for the airlines to survive they're going to have to start raising prices. Looks like Southwest has thrown their hat into the ring first, and since they're considered the leader when it comes to airfares, look for all the others to follow real soon.
For the past few years, in October, SW has advertised their "$99 or less one way" to anywhere promotion. This year it's gone up a whopping 50% in some markets as they are now advertising $149 or less one-way.
Let the fares begin to RISE! May the best airline survive!
For the past few years, in October, SW has advertised their "$99 or less one way" to anywhere promotion. This year it's gone up a whopping 50% in some markets as they are now advertising $149 or less one-way.
Let the fares begin to RISE! May the best airline survive!
#4
Joined: Jan 2003
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One year ago a barrel of oil was about $31 a barrel. Today, it's over $55 - 80% higher!
If the airlines have been able to hold off massive price increases it's because they've masked those increases for leisure travelers with increased business fares (my $1500 ticket from NY to Minneapolis would be evidence of that)or they are still benefitting, as several airlines are, from contracts that hedged their fuel prices. Said more plainly, they at locked in for some period of time at lower prices.
Those hedging contracts are likely expiring or being repriced, which most certainly will start a new round of price increases. So, forget those cheap fares or at least say thank you to the business traveler sitting next to you if you do snag one!
If the airlines have been able to hold off massive price increases it's because they've masked those increases for leisure travelers with increased business fares (my $1500 ticket from NY to Minneapolis would be evidence of that)or they are still benefitting, as several airlines are, from contracts that hedged their fuel prices. Said more plainly, they at locked in for some period of time at lower prices.
Those hedging contracts are likely expiring or being repriced, which most certainly will start a new round of price increases. So, forget those cheap fares or at least say thank you to the business traveler sitting next to you if you do snag one!
#5
Joined: Apr 2003
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I'm curious as to what happens if you book a fare now for a trip several months away.
If they continue to have hefty fuel increases (which seems likely), are you protected, or is there some provision that would allow the airlines to add a surcharge to an already purchased ticket?
If they continue to have hefty fuel increases (which seems likely), are you protected, or is there some provision that would allow the airlines to add a surcharge to an already purchased ticket?
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#8
Joined: May 2003
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Judy: Unless I missed something, I don't think GoTravel answered your question, so I'll try:
If you have a paid-for ticket, that's essentially a contract with the airline that they'll provide the flight for the price you paid. They can't raise the price of a ticket that's already been prurchased.
If you have a paid-for ticket, that's essentially a contract with the airline that they'll provide the flight for the price you paid. They can't raise the price of a ticket that's already been prurchased.
#9
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I certainly came around the backside of Judy's question.
What I meant to say is that the airlines have use of your money way before they provide any service. The up side for the airline is that they can better forcast revenue and use your money. The downside is that they cannot upcharge you for fuel hikes.
What I meant to say is that the airlines have use of your money way before they provide any service. The up side for the airline is that they can better forcast revenue and use your money. The downside is that they cannot upcharge you for fuel hikes.
#10
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Joined: Oct 2003
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Fares remaining low for so long has been mostly the result of everyone trying to compete with Southwest. Now, Southwest has instigated the first major across-the-board increase in quite some time. Of course airfares change constantly. But while the "sale fare" that people have considered rock-bottom for so long has been $200 plus taxes and fees, it is now going up to $300, with Southwest leading the way in HIGHER fares rather than in LOWER fares for a change. That's big news in my opinion.
#11
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tracy, Southwest will not continue to be as profitable as it once was because so many employees are hitting upper level seniority. That means Southwest, like Delta, AA, USAir, United, etc is going to be burdened by payroll more than in the past. Southwest is no longer some little upstart.
One of the reasons Jet Blue is doing well and can make money on cheap fares is that no one has any seniority. No top heavy pay.
For the record, I do not think airline employees are well compensated. I would like to see the captain that got me home safely make $400,000 a year (which I think he is worth).
One of the reasons Jet Blue is doing well and can make money on cheap fares is that no one has any seniority. No top heavy pay.
For the record, I do not think airline employees are well compensated. I would like to see the captain that got me home safely make $400,000 a year (which I think he is worth).
#12

Joined: Jan 2003
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Gotravel, your reply got me googling. The median salary (including benefits and bonuses) for the airline "jet pilot in command" is about $125K.
So...doing the math...would you (and everyone else reading this) be willing to pay more, perhaps triple, in order to fairly compensate our airline pilots, not to mention the rest of the industry personnel?
I think Southwest's 50% price hike is long overdue. I don't want to pay it, but I will. I think it's fair.
So...doing the math...would you (and everyone else reading this) be willing to pay more, perhaps triple, in order to fairly compensate our airline pilots, not to mention the rest of the industry personnel?
I think Southwest's 50% price hike is long overdue. I don't want to pay it, but I will. I think it's fair.
#13

Joined: Apr 2003
Posts: 13,540
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Yep this is the beginning of the end for low fares! The airlines will now take a cue from the fuel companies and inch the price further and further upwards, then come down a bit. Like with gasoline, they've hypnotized us into the mindset that $1.95 is a great price for gasoline. They get it up to $2.39 and then slowly lower it to $1.95 and we'll fall for their little game. "HORRAY! Gas is down to $1.95!" A year ago, who could imagine singing THAT tune?
#14
Joined: Apr 2003
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To GoTravel: Hey, stay away from my backside <G>.
Seriously, though, thanks to you and k9999 for your responses. That's pretty much what I figured, but I thought I recalled something in the past about the ability to tack on a surcharge under certain conditions. Certainly wouldn't seem fair given that the ticket is nonrefundable on my end.
I'm planning to purchase tickets for a trip this winter and was debating when to do it, but this discussion made me decide to go ahead and book them now.
Seriously, though, thanks to you and k9999 for your responses. That's pretty much what I figured, but I thought I recalled something in the past about the ability to tack on a surcharge under certain conditions. Certainly wouldn't seem fair given that the ticket is nonrefundable on my end.
I'm planning to purchase tickets for a trip this winter and was debating when to do it, but this discussion made me decide to go ahead and book them now.



