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How much are you really paying for your plane ticket?
We've heard airline employees gripe ad nauseam about how flying just isn't what it used to be ... because it's so much cheaper than it was back in the glory days. True, we're looking at a much different world post-regulation, but that was so long ago that it isn't relevant any more.So, what about today? Are airlines still getting hammered in the deal (as they contend), or are consumers giving 'til it hurts? The answer, of course, is somewhere in the middle.
You probably saw my story this week that puts plane tickets up 13.1 percent year over year for the second quarter, though it really just offsets a 13 percent decline last year. Nonetheless, the $341 average domestic fare is close to the 2008 peak of $346 and the third-highest average domestic fare attained since 1995 (2006 came in second at $342). It really does feel like we're getting screwed.
Think again. Airline employees have a point, but only narrowly.
Adjusted to 1995-equivalent dollars, the average domestic fare this year is only $238. That's a 20 percent drop from the $297 average fare in 1995. Over the past 15 years, the airline industry has lost a lot of ground. The peak, in 1995-equivalent dollars, was reached in 1999 ($302) and maintained in 2000 ($300) before the slide began. Even in this analysis, however, 2010 shows a marked improvement from the 2009 level of $213 (in 1995-equivalent dollars).
So, in pure cash, the airlines have been getting shafted. The industry's position falls apart, however, when you consider the inclusion of ancillary fees, which are expected to be good for $8.9 billion in airline profits this year, according to IATA. The inflation-adjusted fare we're paying doesn't include the amenities we used to receive ... and the airlines are generating extra income from what they used to include in the price of a ticket.
There's no doubt that airfare is cheaper than it's been in at least a decade and a half, but you're not getting the value you used to.
[photo by Mr. T in DC]
So, in pure cash, the airlines have been getting shafted. The industry's position falls apart, however, when you consider the inclusion of ancillary fees, which are expected to be good for $8.9 billion in airline profits this year, according to IATA. The inflation-adjusted fare we're paying doesn't include the amenities we used to receive ... and the airlines are generating extra income from what they used to include in the price of a ticket.
There's no doubt that airfare is cheaper than it's been in at least a decade and a half, but you're not getting the value you used to.
[photo by Mr. T in DC]
Filed under: North America, United States, Airlines
Reader Comments (Page 1 of 1)
Jim McNally Dec 11th 2010 11:11PM
The airline industry is the worst run bus. in the country. They could care less for there passengers, employees, TSA, public opp. The only thing they care about is the money. They go under for millions and are in bus. the next day. This is after the CEO's have shoved millions in their pockets.
Lori Dec 11th 2010 11:09PM
What this writer and most media don't include is the huge rise in cost of jet fuel. Most flights don't make any money themselves thats why the airlines need to charge for the extra's. Why do you think so many airlines have ended up in bankruptcy. I have worked for an airline for almost 6 years now, and have given up wages and any extra's that may have come with the job. I think the public would be shocked at how little I make as an airline agent, which makes the job a little more difficult with passengers complaining about every little thing these days.
Jim Dec 11th 2010 11:21PM
you must be blind ,dumb or a real sucker to believe what your boss is telling you. These CEO's are stuffing millions in their pocket before a plane ever gets off the ground. Do you think they are in bus not to make money. JMc
Tom Johansmeyer Dec 12th 2010 1:16PM
@LORI, you're right, because it isn't relevant. This is a discussion of customer cost. The implication of customer cost -- i.e., that the airlines are getting less per fare -- is actually addressed quite clearly, and the cost of jet fuel is merely a subset of that. And flights don't actually cost more (in inflation-adjusted dollars), they cost less ... 20% less than they did 15 years ago.
Lori Dec 11th 2010 11:29PM
I'm not saying THEY are not making money, but there is valid reasons why flights cost more, does it cost you more to fill up your tank? BTW I am neither blind, dumb or a real sucker, the CEO's have always done this, that does not account for the state the air travel industry is in!
Tom Dec 12th 2010 5:17AM
Passengers are not the ones getting screwed here, it's the front line employees! They have been subsidizing passenger's cheap fares now for years. The extra charges are here to stay...might as well get used to it...think of it as add on's when buying a car. You, of course, could pack lighter and not have to check a bag, not buy a "premium" seat and bring your own food on the flight.
In 1978, if I walked up to TWA in JFK to buy a ticket to PHX...it was 500 dollars. Today, it's 278.00 plus 35 for ticketing fee...if I check a bag, it's another 30. I'm still ahead.
David S. Dec 12th 2010 6:01AM
For those too young to remember, yes, flying used to be a better experience. Back in the day, flying was pretty much for the upper middle class, as ticket prices were too expensive for most middle-class families. Tickets are far cheaper now -- even if flying overseas. Cheaper tickets means far more people flying and more crowded airplanes. Sorry folks you cannot have it both ways.
Susan Dec 12th 2010 7:53PM
I worked for TWA in 1968+ and at that time it was truly a world class airline. Yes, I kind of miss those days when only those who could afford the relative luxury, flew...and dressed and behaved well. But they (and we) were treated well; china and silver in, even, coach, excellent food and service and the benefits given to the few who qualified as the cream of the crop (most pilots had to have about 2000 hours just to be hired and flight atendants were often nurses) to work for those carriers. Of course the planes were smaller (allowing more personalized service), jet fuel was much cheaper and computerization was a new concept.
Yes, it's rather "Greyhound" today, and my biggest worry is off-shore maintanance.