Why aren’t air fares coming down in price?

By | Category: Travel rumblings
Into the sunset with more of our money

Into the sunset with more of our money

Apart from the usual new year’s sale of airline tickets, the overall price of long haul tickets has been rising. Even household energy bills are dropping again given E.ON’s announcement this morning, so why not air fares?

Last year the airlines had the excuse that they had hedged their aviation fuel costs and that they were tied into contracts. Those contracts must have ended so why haven’t prices dropped by 5 or 10%? They might have had staff and other cost increases to bear but that doesn’t justify why prices haven’t come down a little bit. Even though oil is priced in US dollars and the pound has fallen against the dollar to a low not seen for many years, there is still a price saving that should be passed on.

The only conclusion that can be made is that airlines are boosting their profits by hanging on to as much of the fuel savings as they can.

They might bleat that there is enough competition to make sure that prices are fair but that is an aside and really only applies to Europe. On many routes there is little or no competition. Flights by Norwegian WoW Air and Westjet across the Atlantic to America and Canada offer some savings but there aren’t enough flights to really hit the big boys with competition that will result in cheaper prices.

The Middle Eastern airlines such as Emirates and Qatar Airways are frustrated by what they consider as US protection for their airlines thus preventing them flying there and picking up passengers from Europe on the way through. At least if they flew into the US we might receive an improvement in customer service levels.

In the meantime the air passenger is left with little choice but to pay the high fares that are available on North and South American routes. It appears that unless the biggest tour operators open charter flights, prices will only go up for the foreseeable future.

 

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