Sponsor Message:
Civil Aviation Forum
My Starred Topics | Profile | New Topic | Forum Index | Help | Search 
Fares And Fuel Prices  
User currently offlineUALPHLCS From , joined Dec 1969, posts, RR:
Posted (8 years 7 months 3 weeks 8 hours ago) and read 2314 times:

Ok, so the price of Oil is still very fluctuating but trending upwards. My question is is that while consumers seem sanguine about paying more at the pump to fill thier cars. Why are cumsumers unwilling to pay for airline tickets?

Facts are that while gasoline is considered a nessesity and rising prices are a cross we have to bear.

Airline tickets are still a luxury, and people will avoid paying the higher costs.
But I think people have been so conditioned to expect low fares that the airlines have done themselves a disservice when fuel cost do rise. Breaking that cycle needs to be a priorty.

Thoughts? Comments?

6 replies: All unread, jump to last
 
User currently offlineDispatchguy From United States of America, joined Jan 2006, 1249 posts, RR: 2
Reply 1, posted (8 years 7 months 3 weeks 8 hours ago) and read 2309 times:

Truer words were never spoken.

A mid-grade gas here is $3.09/gal; in small-town in Northern Indiana (well, not that small)

For the airlines, flights may be full, but no one is going to make a dime. When I ship a letter on UPS to Chicago (from South Bend), it now costs about a few bucks additional just for a fuel surcharge.

Imagine that - costs to produce go up, and they increase the cost to the consumer. Only in the passenger airline biz do they have the mindest to lower the prices to the consumer; after all, they can just take the shortfall out of the employees hide.

"Airport management, the FAA and the airlines. They're all cheats and liars" Capt Rex Kramer, Airplane!  Smile

Sad, nothing has really changed in 26 years; well, nothing for the better.



Nobody screws you better than an airline job!
User currently offlineBond007 From United States of America, joined Mar 2005, 5434 posts, RR: 8
Reply 2, posted (8 years 7 months 3 weeks 7 hours ago) and read 2286 times:

Quoting UALPHLCS (Thread starter):
Why are cumsumers unwilling to pay for airline tickets?

Who say they aren't?

It's not so much that consumers aren't willing to pay - it's that airlines don't charge what they need to make a profit...or even break-even!


Jimbo



I'd rather be on the ground wishing I was in the air, than in the air wishing I was on the ground!
User currently offlineLightsaber From United States of America, joined Jan 2005, 13446 posts, RR: 100
Reply 3, posted (8 years 7 months 2 weeks 6 days 23 hours ago) and read 2240 times:
Support Airliners.net - become a First Class Member!

According to this article Jet-A is back above $2/gal

http://yahoo.reuters.com/news/articl...8&pageNumber=1&imageid=&cap=&sz=13

Quote:
On Wednesday, jet fuel prices on spot markets averaged between $2.06 and $2.10 per gallon -- again exceeding levels of more than $2 per gallon seen for the first time after Hurricane Katrina.

Damn... This is going to hurt.

I worry that fuel has finally broken through a barrier high enough to slow the economy.  Sad Do I have any proof? No. But as I've posted before, that is something we'll know about after the fact.

Lightsaber



Societies that achieve a critical mass of ideas achieve self sustaining growth; others stagnate.
User currently onlineHPRamper From United States of America, joined May 2005, 4103 posts, RR: 8
Reply 4, posted (8 years 7 months 2 weeks 6 days 22 hours ago) and read 2224 times:

Fuel prices would drop if we stopped hard-talking Iran about attacks and such. Plain fact that is making traders very nervous...that's why oil prices have shot up even just over the last two weeks.

User currently offlineAirwave From United States of America, joined Mar 2006, 1117 posts, RR: 3
Reply 5, posted (8 years 7 months 2 weeks 6 days 20 hours ago) and read 2204 times:

Quoting UALPHLCS (Thread starter):
My question is is that while consumers seem sanguine about paying more at the pump to fill thier cars. Why are cumsumers unwilling to pay for airline tickets?

Because even though an airline seat has become a commodity, most people on the street still view it as a luxury good and that's partly why they'll still balk--that and...

Quoting UALPHLCS (Thread starter):
But I think people have been so conditioned to expect low fares that the airlines have done themselves a disservice when fuel cost do rise. Breaking that cycle needs to be a priorty.

 checkmark 

Quoting Dispatchguy (Reply 1):
Imagine that - costs to produce go up, and they increase the cost to the consumer. Only in the passenger airline biz do they have the mindest to lower the prices to the consumer; after all, they can just take the shortfall out of the employees hide.

 checkmark 

Quoting Bond007 (Reply 2):
It's not so much that consumers aren't willing to pay - it's that airlines don't charge what they need to make a profit...or even break-even!

 checkmark 

Quoting Lightsaber (Reply 3):
I worry that fuel has finally broken through a barrier high enough to slow the economy.

Well, personally, I do hope the economy slows down a bit. Maybe then inflation will curb, prices of gold and now silver will come back down to acceptable levels, and housing markets stabilize. Oil in the near-term has little hope of stabilizing to the point of linear predictability.

I've been reading about how $70.00/bbl is a psychological barrier for the average US consumer, but I think it's closer to $100.00/bbl. We saw $70.00/bbl after the hurricanes, and consumer habits changed only negligibly. However, once prices hit $100.00/bbl, that *will* be more than the market will be able to continuously bear and we will see drastic cuts in just about everything except prices until oil returns to an acceptable level. However, in the run up to $100.00, we will see plenty of sporadic adaptation--just nothing on a truely systemic level. Oil is testing the waters to see how high it can go without losing a sale--even it will have a ceiling. The trouble is living through it until that ceiling is found.

Quoting HPRamper (Reply 4):
Fuel prices would drop if we stopped hard-talking Iran about attacks and such. Plain fact that is making traders very nervous...that's why oil prices have shot up even just over the last two weeks.

It's not only Iran that has traders' panties in a bunch--it's supply-side issues with Iraq and Nigeria and demand-side craziness with China and the US as well.

The biggest reason prices are spiking? Refiners are shifting away from adding MTBE (which helps curb air pollution but contaminates groundwater) to gasoline. Just by removing this will shrink the national gasoline supply by about 150,000 barrels *a day*. Interestingly enough, MTBE is to be replaced with ethanol, which has caused *that* price to spike about 20% because about 50% of ethanol's total daily output will be needed.

Me? A Prius is looking mighty tasty right about now, lol.

Airwave  eyebrow 



When you do things right, people won't be sure you've done anything at all.
User currently offlineDispatchguy From United States of America, joined Jan 2006, 1249 posts, RR: 2
Reply 6, posted (8 years 7 months 2 weeks 6 days 15 hours ago) and read 2160 times:

Back in the summer of 1997, I worked for United Feeder Service (UFS) at the South Bend airport.

I recall from back then the BUA walk-up fare from SBN-ORD was 257.00 for the "privilege" (if you want to call it that), for flying on a beat-up British Aerospace ATP, for a 71 mile hop across Lake Michigan into Chicago.

Now as of the time I post this, the BUA fare, according to United.com, is 562.80. Now granted, back in 1997 we didnt have all of the post 9/11 security surcharges like we do today; but 562.80 to fly on a cramped ERJ, for the same 20 minute, 71 mile flight. For that amount of cash, I better be getting a helluva lot more than a 10-pretzel bag of pretzels, and a completely disinterested flight attendant in the back.

Back in 1997, surprisingly, there were a lot of people that just flew SBN-ORD instead of driving, and back then I couldnt blame them. Incidentally, from DENORD, same day, same fare basis (BUA), according to United.com, the fare is 609.30.

I posted in another thread that I dont mind paying the fare as long as it is worth the service received. In the DENORD segment (on a mainline aircraft), I wouldnt mind paying the BUA. In the SBNORD segment (on a cramped ERJ aircraft, with minimal, if any, inflight service), there is no way in hell that I would pay that BUA fare, because the transportation and the service on top would not be worth the fare paid. By the time I farted around at SBN with check-in, the TSA shmoes, waited at the gate, take the inevitable delay into ORD, I easily couldve driven it.



Nobody screws you better than an airline job!
Top Of Page
Forum Index

This topic is archived and can not be replied to any more.

Printer friendly format

Similar topics:More similar topics...
Katrina And Fuel Prices posted Thu Sep 1 2005 16:10:13 by JAM747
Freighter Airlines And High Fuel Prices posted Sat Jul 29 2006 19:15:42 by WN230
Fuel Prices And SQ's Earnings posted Fri Jul 29 2005 12:49:14 by PhilSquares
If Fuel Prices Go Down, Will Fares Follow? posted Fri May 13 2005 22:45:07 by JMV
Fuel Price And Ticket Prices posted Wed Apr 6 2005 08:11:53 by AirWillie6475
Fuel Prices And Effects On World Travel posted Thu Sep 9 2004 03:01:03 by Ramerinianair
Fuel Prices And Old Fleets posted Mon May 17 2004 18:08:04 by KBUF737
Fuel Prices In Future And Its Consequences posted Sun Aug 3 2003 10:34:10 by Osteogenesis
Higher Fuel Prices Leading To Younger Fleets? posted Mon Oct 23 2006 07:06:10 by Baron95
Fuel Prices In Caracas (CCS), Good Refueling Stop? posted Sun Jul 9 2006 05:05:32 by Baron95