ChristianFlyer
Topic Author
Posts: 3
Joined: Wed May 25, 2016 5:01 am

Fixed airfares - is it possible? Should airlines be regulated again?

Tue Apr 10, 2018 8:03 am

A response on my other topic (viewtopic.php?f=5&t=1390583), a fellow member claimed that fixed pricing would not work because tickets would be sold out too soon in peak, and beat by competition off peak?

As a young person, I have never experienced the airline industry in any other way, but have heard that once upon a time in the 'golden age', airfares were regulated and fixed (in the USA at least, not sure about here in Australia), but also too expensive for the average traveller, and deregulation, and with it, inconsistent pricing has enabled people who once could not afford it, to take to the skies, sounds great right? well yes, but this has also allowed for price gouging, just read these articles:


So my question is could fixed airfares through regulation be introduced once again without the early problem of flying being reserved for the wealthy thanks to flying being made cheaper by lower costs of oil, more fuel efficient planes, and cramming more people into a plane than it was originally designed for (10 abreast 777, 9 abreast 787, etc)

And even if regulation would not be viable once again, would it possible for a single airline to have fixed airfares to be reasonably profitable using a 'no thrills' model? There would be no issue filling the seats in peak, filling them off peak might be a little more difficult if legacy airlines want to lower the prices to match a LCC's (Low Cost Carrier) prices.
 
BravoOne
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Joined: Fri Apr 12, 2013 2:27 pm

Re: Fixed airfares - is it possible? Should airlines be regulated again?

Tue Apr 10, 2018 9:31 am

Probably the wrong forum for this discussion?
 
N415XJ
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Joined: Thu Aug 14, 2014 4:04 pm

Re: Fixed airfares - is it possible? Should airlines be regulated again?

Tue Apr 10, 2018 8:50 pm

ChristianFlyer wrote:
So my question is could fixed airfares through regulation be introduced once again without the early problem of flying being reserved for the wealthy thanks to flying being made cheaper by lower costs of oil...


Firstly, oil was cheaper in the decades before deregulation than it is now, only going up to the prices we normally see today after the OPEC oil crisis, which was a political rather than purely economic price hike. And mostif not all serious analysts predict that oil will become more expensive in the future, not cheaper due to simple supply and demand

https://inflationdata.com/Inflation/Inf ... _Table.asp

In any case, whether or not airlines should be re-regulated is a political and economic discussion that isn't suited to this forum. I encourage you to look up the economic, political, and moral principles behind liberalism, neoliberalism, social democracy, capitalism, and government intervention in markets to get a better understanding of why re-regulation would be a good thing or a bad thing.
 
COSPN
Posts: 1673
Joined: Fri Oct 12, 2001 6:33 am

Re: Fixed airfares - is it possible? Should airlines be regulated again?

Tue Apr 10, 2018 10:27 pm

Oil price used to be set by the Texas railroad commission.. they decided what a barrel of oil would cost .. those days are long gone
 
richcandy
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Re: Fixed airfares - is it possible? Should airlines be regulated again?

Wed Apr 11, 2018 8:02 am

Thirty years ago airlines had their fares set by governments. Example If TWA or BA wanted to offer a special sale fare between the US and UK the fare had to be approved by both UK and US authorities. Fares between European cities on the various national carriers were a mirror image of each other, what I mean is the fare structure was exactly the same. And often airlines shared revenue on routes. In Europe airlines were state owned and were ran more as a service than as a business.

Love them or loath them the low cost carries have changed the industry and now the legacy carries are copying them. I don't think its really possible to go back to a time of set fares. Also I am not sure that the public would want it. Flying used to be seen as something special that unless you travelled for business you would only do maybe once a year. Now many people think of it as nearly a bus service.
 
gloom
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Re: Fixed airfares - is it possible? Should airlines be regulated again?

Wed Apr 11, 2018 12:11 pm

richcandy wrote:
Love them or loath them the low cost carries have changed the industry and now the legacy carries are copying them.


Disagree here. Love it or loath it, but differentiated prices on several conditions (or as we call it in my industry) is late 80s idea. See the GDS introduction time.

Actually I think you've mistaken reason to effect. When the airlines started to behave like normal (well, more or less) businesses and introduced modern tools like GDS or other dynamic pricing systems, and once Amadeus was created, it all have set up scene to LCC players. I'd risk a thesis that without modern dynamic pricing, there wouldn't be LCCs, or at least not as strong as they are. They took the tools over from conventional airlines, and used them better than inventors ever imagined. That's definitely not the only reason for LCCs success, but I'd say one of major ones.

Cheers,
Adam
 
PPVRA
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Re: Fixed airfares - is it possible? Should airlines be regulated again?

Fri Apr 13, 2018 12:48 am

Dynamic pricing is extremely important to industries with high fixed costs like airlines, hotels, trains, freight, etc.

Take a look at the price of refundable fares. That’s likely the price we would pay for not allowing dynamic pricing.

For that matter, we need more dynamic pricing in society, not less. Major airports need to change their landing fee structure to properly price the value they provide, thereby reducing/regulating congestion without necessarily making air fares more expensive.
"If goods do not cross borders, soldiers will" - Frederic Bastiat
 
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lightsaber
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Re: Fixed airfares - is it possible? Should airlines be regulated again?

Sat Apr 14, 2018 1:19 am

PPVRA wrote:
Dynamic pricing is extremely important to industries with high fixed costs like airlines, hotels, trains, freight, etc.

Take a look at the price of refundable fares. That’s likely the price we would pay for not allowing dynamic pricing.

For that matter, we need more dynamic pricing in society, not less. Major airports need to change their landing fee structure to properly price the value they provide, thereby reducing/regulating congestion without necessarily making air fares more expensive.

People do not realize how extreamely pricey regulated fares are. For the fares are set to keep the least efficient operation going.

Major airports need to expand. What ever happened to building for growth? We've become a global society afraid of moving the Chee's.

Lightsaber
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