Price Of Air Tickets Should Start Coming Down Due To World Financial Crisis

AFP:

The price of air tickets should start coming down soon because of the world financial crisis, experts are predicting, while ruling out a plunge that would endanger the health of airlines.

"If you keep prices too high you're going to lose more passengers," said Geoff van Klaveren, of Exane BNP Paribas, against a background of both companies and tourists cutting back on air travel.

Read the whole story: AFP

Comments

[hortonhearsawho]

This is your pliot John McCain speaking to you...buckle up folks.

[trollsbwild]

The fares charged should be less now, if you factor in recent oil price plunge.

[Trucker777]

Don't expect the price of an airline ticket to go down for two reasons:
1. Airlines have already purchased fuel for the coming year on futures contracts based on the price of fuel three months ago.
2. Airlines are going to use the economy as a reason to cut equipment availability (planes) and staff (pilots, flight attendants, mechanics, and other support staff).

[Tom95134]

Actually, they don't "purchase" fuel because they have no place to store it. They sign contracts for future delivery which can be broken with some penalty. If the cost of fuel at the time of need is lower then it makes sense to dump the contract.

They are also going to use the economy to re-work their seat optimization software to scrape even more revenue out of the pockets of those that pay full fare. Unfortunately, companies(those most likely paying full fare) are in the process of reducing their travel budgets.

There is going to be a lot of tin setting on the ground and gathering desert dust. Many airlines will not survive.

[regularmess]

damn, if there were futures markets in bloodbath, we'd be in the internet bubble of '98!

http://www.youtube.com/watch?v=DbOegeeOndM

[rabiddog6708]

Great. Buy a ticket to Vegas and blow what savings you have left on hookers and craps.

[hortonhearsawho]

shhhhhhhhhhhhhh....

[JessWonderin]

That won't take long . . . . for most, air fare plus one turn on the Wheel of Fortune and $2 at a peep show . . . them home.

[northwesterner02]

"One Bright Side To Financial Crisis: Price Of Air Travel Should Start Coming Down"

it is a dark side, not a bright side: lower airfares means we will waste even more oil, which has so many serious downsides.

[Myshkin57]

You think people are just going to start flying when they don't have to because it's cheaper? Everybody's low on cash. They'll be lucky for ridership to stay even.

[northwesterner02]

there is always more demand for a good/service at a lower price level.

[Mildmannered]

Cost of fuel is plummeting and so cost of tickets should go down significantly.

[drkazmd65]

I am kind of wondering,... since the (alleged) reason that several of the Airlines started charging 'extra' for checked bags was to offset fuel costs,... why is it again that they haven't dropped those 'extra' fees since fuel costs have dropped >50% since the summer?

Oh yeah,... that's right,... they saw how the banking industry made all those 'nifty' extra profits by scamming the customer with fees,... they just want their share of the action.

Makes me glad I don't fly much on business or for fun any more.

[jalowe1957]

Throughout the past year, I was accumulating Delta SkyMiles in the most unusual ways (i.e. promotions, special bonus offers). As I write this, I have now 48,000 miles and am now 2,000 miles away from a second round-trip award ticket. Tomorrow, I am acting on a pair of offers to put me over the threshold.

Also, as an afterthought, check this site out if you're looking for leads on frequent flyer miles offers:

http://www.flyertalk.com

[KarateKid]

What the airline industry has undergone, the auto industry (Big 3) need to do, but they don't want to face reality.

[voltaire11]

Good news, the price of air tickets are coming down. The bad news, I have no money to go anywhere. Well, at least I can go down to Dulles Airport and dream about going places...it will be like I was in college again. Great....

[Mildmannered]

Many good websites with great photos and videos of places we can no longer afford to visit.

[curiousasheck]

The airlines started loosing money when oil hit $40 per barrel.

Of course the speculators (energy futures gamblers) don't give a sh*t about anyone.

Just Google Enron Tapes for a refresher.

[DRaymond]

There is no doubt that dropping fuel prices will give the airlines some breathing room. Since they have already reduced capacity they will first focus on running profitably with their current capacity. The biggest plus side of this will actually be a reduction in layoffs in the airline industry contributing to the recession.

In all the airlines needed the reduction in capacity. A whole range of technologies had been cutting into demand for business travel.

[escobar]

The airline companies are all barely surviving.
The cash flow has always attracted theives and maggots like Ichan and Lorenzo.
With ground support requirements for example there's lots of room for padding bills and awarding contracts to their back pocket. They can easliy pull stock manipulations.
Many carriers have been financially raped and live quarter to quarter by this sort of management.
The fuel costs have gutted profits.
Carriers have been cutting ticket costs for market share.
As business drops off they still have to pay leases on the gates and airplanes. Few companies actually own the airplanes these days.
The banking situation hurts thier financing of any replacement equipment and parts.
There has been a big drop in tourism.
What we will see is a lot of airlines giong bankrupt in the next two years.
The survivors will control the markets and prices to keep them in business.
There may be a rise of national carriers from oil rich nations since they can control their fuel costs. The prices are destined to skyrocket in the next decade unless alternative energy transforms overall energy consumption

[JustNotTrue]

I have a friend who is a pilot for Emirates Airlines (he is Venezuelan), His take home is over 250,000 a year PLUS he gets a big house in Dubai, PLUS schooling paid for his kid all the way through college.

[Sarahmay57]

Agreed about the airlines.

I'd like to see the hotels and resorts drop their prices!

[Ares1]

Probably now the price of a ticket will come down, Fuel hedging has backfired for some of the airlines
as other companies pay for fuel at the current prices, airlines that hedge have to pay for fuel as it was price wise a few months past so they pay more and have to charge for the second bag and sometimes the first bag.

[KarateKid]

But, that's how Southwest got ahead, and their fares have always been the lowest, and they don't charge for bags and all that other ticky tacky charges American, Delta, United and US Air charge.