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Prices of Everything Is Going UP - Value of Everything Is Going DOWN (Peter Schiff)
Comments
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Completely this...flew 2 weeks ago for work. Use to be 6 direct flights a day...now down to 2.Bob_C said:
Are there just less flights being offered as well which is propping the prices up? With the large variable cost of fuel, airport fees, wear and tear and staff it seems there is a minimum price required to justify wheels up.creepycoug said:I have flown a lot during COVID. I'd say they are surprisingly consistent with pre-pandemic prices. So I agree with the both of you in a sense. I agree with @HoustonHusky that I would expect some DEALS to get people in seats again, and with @ntxduck that they're not through the roof.
They're expensive relative to what I thought they'd be given everything.
I’d wager there is some collusion happening between the carriers as well to some extent.
I think the deals idea that you are speaking of are more in the gym/golf course business model where there is essentially 0 variable cost per revenue unit and only fixed costs to overcome. Variable costs only arise in that mode when a tipping point of high demand is there.
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Airlines network wide are anywhere between 20 and 50% smaller compared to 2019. Some routes are the same, others significantly cut back. International travel is mostly a disaster other than Mexico and the Caribbean.
Sadly the US is in better shape than the rest of the world, as Canada continues to try to kill its airlines (90% smaller than 2019) as does Europe.
In terms of inflation, while the pricing may appear relatively similar (I'm pretty sure across all travelers it is down, with the reduction of business travel, but not as significantly since the airlines shrunk as well), what has happened is that significantly more utility is provided for each ticket purchase. Non-changeable fares were practically eliminated and now for that same $400 ticket in 2019 which if you had to change plans (for $200) it is now completely free to change. So the value provided by that $400 ticket is now higher, or consider the total you paid in the past of tickets plus change fees and compare that to today. This is not true for Southwest but for the other major airlines it absolutely is.
