aerolover27
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Regulatory Body To Restrict Airfares

Wed Nov 21, 2012 12:19 pm

I travel frm LHR to BLR in dec and i find the airfares touching the sky with all airlines. I know its a peak season of travel but arent the customers being burdened here. I can analyse the difficulties too like pilots and staff going on vacation etc, but still the fares are way too high...

Is there a regulatory body keeping an eye on the airfares?
 
Bobloblaw
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RE: Regulatory Body To Restrict Airfares

Wed Nov 21, 2012 12:29 pm

A price ceiling will only create a shortage. So the fare might be lower, but all bookings for the next 6 months would be sold out.
 
2175301
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RE: Regulatory Body To Restrict Airfares

Wed Nov 21, 2012 12:35 pm

Yes; The people who fly are keeping an eye and regulating the fares. If the airlines set the fares too high more people will not buy and the airline will loose money.

What makes you think that the fares are too high anyway and that more government control would make them lower.

In the US we once had regulated airfares - and the airlines were essentially guaranteed a certain profit percentage as the fares were set with the concept of a targeted profitability.

Since that "regulatory" program ended very few airlines in the US have been able to consistently make a profit, and many have lost money since then and been through bankruptcy at least once. Airline profitability in the US is generally so bad that its literally a standing joke: "Do you want to know how to make a little money investing in airlines - start with a lot of money..."

So if the government were to re-impose fare regulations it would have to go back to basing those fares on what should be a reasonable rate of return and profit for a company - the fares would have to be higher than they are now (and have been in the past several decades).

Have a great day,
 
PanHAM
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RE: Regulatory Body To Restrict Airfares

Wed Nov 21, 2012 2:56 pm

That would be the end of cheap air travel the end of yield management systems and the end of competition.

How can anyone think that the government is smarter than free enterprise? There is enough regulation alraedy and, BTW, US$ 99,00 fares JFK to LAX/SFO had been advertised full page in the NYT already in the mid 70s, and that was, IIRC correctly, before deregulaiton. The airlines problem, in that case PanAm, was, that they sold too many tickets at that price.
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tdscanuck
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RE: Regulatory Body To Restrict Airfares

Wed Nov 21, 2012 3:06 pm

Quoting aerolover27 (Thread starter):
I know its a peak season of travel but arent the customers being burdened here.

Well, yes, that's the whole point. Demand goes *way* up around the major holidays. The airlines have finite capacity. They raise fairs until the number of people willing to pay the fare roughly matches what the airlines can provide. This is exactly the same reason that fresh flowers cost more in the dead of winter or that 20-year old scotch costs more than 1-year old scotch.

Quoting aerolover27 (Thread starter):
the fares are way too high...

Too high relative to what? If the airline has 1 million ASM available and there's 1 million RPM of demand at the current fare, what's the basis for saying the fare is too high?

It may be higher than you, personally, want to pay but that's what the airlines want...demand goes up, they need to raise fares get some people out of the market to match up with their supply.

Tom.
 
jetblueguy22
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RE: Regulatory Body To Restrict Airfares

Wed Nov 21, 2012 4:23 pm

I don't think any politician in their right mind would introduce something to re-regulate the airlines. At least not in the United States. We had it for a long time and it seemed like the airlines didn't want it. Fares may seem crazy, and often are. But the cost of doing business isn't what it once was. Fuel is through the roof, crews are getting more senior, costs in general are just high. I love a cheap flight as much as anybody else. But I don't think regulating it is the way to go. They have to make money as well.
Blue
All of the opinions stated above are mine and do not represent Airliners.net or my employer unless otherwise stated.
 
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moo
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RE: Regulatory Body To Restrict Airfares

Wed Nov 21, 2012 4:28 pm

Quoting aerolover27 (Thread starter):
I travel frm LHR to BLR in dec and i find the airfares touching the sky with all airlines. I know its a peak season of travel but arent the customers being burdened here.

Who else exactly should be burdened here? After all, these are (mostly) private airlines operating a profit seeking business - and you are a customer looking to buy a product.

Its unfortunate if air travel becomes too expensive for most people to consider, but cheap air travel is hardly a human right.

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