Airlines are going premium. Prices are rising. Will cheap tickets be harder to find?

[T_R_Oglodyte]

Airlines are going premium. Prices are rising. Will cheap tickets be harder to find?

Over the last year, the average cost of a domestic U.S. flight increased more than 4% to $269 in November, U.S. Bureau of Labor Statistics figures show. It is a trend line that is expected to continue as budget airlines stumble due to rising costs and a crowded field of competitors, while the...

www.spokesman.com

 

[dougp26364]

As I’ve aged, I’m afraid I’ve fallen into the premium category. 15 years ago, I was shopping for the cheapest ticket with reasonable departure, connection and arrival times.

 

[jp10558]

I think this just means less people will fly places. There's already people complaining about the hassle when it was "cheap", as it gets more expensive, it gets more appealing to drive where that's possible, or not travel as far.

And everyone would like a better experience, but there's a small group of people who will pay $1,600 a ticket to get to Cali from NY. And that's still cheap for up class - usually I see multiple thousands per ticket on less competitive routes. I might enjoy going to California, but I've also been there a few times, and if I'm dropping $2k on a ticket, I'd prefer seeing Asia or other parts of Europe TBH.

I do think this may also just be cyclical - though with fewer airlines I guess it's also possible that running smaller exclusive flights could also work, I'd still think there's always going to be someone trying whatever mass market they can make work. Government subsidies also vary - as prices rise out of average flyers budgets, I'd like to think subsidies might wane - but who really knows.

 

[T_R_Oglodyte]

I think this just means less people will fly places. There's already people complaining about the hassle when it was "cheap", as it gets more expensive, it gets more appealing to drive where that's possible, or not travel as far.

And everyone would like a better experience, but there's a small group of people who will pay $1,600 a ticket to get to Cali from NY. And that's still cheap for up class - usually I see multiple thousands per ticket on less competitive routes. I might enjoy going to California, but I've also been there a few times, and if I'm dropping $2k on a ticket, I'd prefer seeing Asia or other parts of Europe TBH.

I do think this may also just be cyclical - though with fewer airlines I guess it's also possible that running smaller exclusive flights could also work, I'd still think there's always going to be someone trying whatever mass market they can make work. Government subsidies also vary - as prices rise out of average flyers budgets, I'd like to think subsidies might wane - but who really knows.

Strikes me as just real market forces at work. If discount airlines are struggling and finding it necessary to create pricing tiers, that points to too much capacity in the sector.

 

[Blues]

I do think this may also just be cyclical

Yep. People don't remember (or weren't alive) what prices were before deregulation. I moved from Chicago to San Francisco in 1976. Traveled back often. Throughout 1977-79, prices were consistently about $400 rt. I just looked it up on a CPI calculator, and that works out to about $2150 in today's dollars.

What we got for deregulation was much lower prices, and much, much lower service. Cattle-car class. Like Doug, I'm increasingly shopping for higher class, lower hassle tickets.

 

[T_R_Oglodyte]

Yep. People don't remember (or weren't alive) what prices were before deregulation. I moved from Chicago to San Francisco in 1976. Traveled back often. Throughout 1977-79, prices were consistently about $400 rt. I just looked it up on a CPI calculator, and that works out to about $2150 in today's dollars.

What we got for deregulation was much lower prices, and much, much lower service. Cattle-car class. Like Doug, I'm increasingly shopping for higher class, lower hassle tickets.

~1970, when I was going to school in St. Louis, I could fly Braniff between STL and MSP. Student fare on Braniff was 2/3 price, guaranteed seat. Coach fare was around $100, so I was generally paying ~$65-$70 when I flew.

In 1973 I arrived in the Bay Area from St. Louis. PSA was operating exclusively within CA, and so fares were not regulated by the FAA. The distance from STL to MSP isn't much different from the distance between SFO and LAX. Fares on PSA between SFO and LAX were $19, with planes leaving every hour (every half hour in peak morning and evening). No reservations taken. The way to guarantee space on the plane was to buy a ticket. No reserved seats; first come, first served for seating.

I knew right away that was the impact of fare deregulation.

 

[pedro47]

I can remember paying $69 and $139 for a direct fly to Vegas.

 

[rapmarks]

I only fly one way to Wisconsin in may snd one way back in October but I spent $10000 last year flying my children and grands to see me and flying people when I ended up in the hospital who came to stay with me because they were afraid to leave me alone. I think a private caretaker for a month would have been cheaper

 

[Ken555]

I recently acquired my very first ticket with Frontier Airlines and opted for their "business bundle" option. This package provides a range of benefits that greatly improve the travel experience. Specifically, it includes two checked bags, a carry-on bag, and a seat situated at the front of the aircraft, which conveniently comes with a blocked middle seat for extra comfort. Furthermore, the bundle offers priority boarding, enabling me to settle in comfortably without the usual rush and chaos.

What's especially attractive is that this bundle is priced at only about $20 more than a standard economy fare on a traditional airline with only one checked bag. Considering the minimal price difference, I thought it was a simple choice to invest in the business bundle. I truly value the additional comfort provided by the blocked middle seat, as it contributes to a more spacious and enjoyable experience.

In addition, the option to check a second bag is beneficial. Since this journey represents the end of a 36-night adventure abroad, I expect to require additional luggage space for all my belongings and souvenirs. Overall, I feel that this decision enhances my travel experience, allowing me to concentrate more on enjoying my trip instead of worrying about baggage limitations or cramped seating.

I'm optimistic that my inaugural trip with Frontier will go well, especially given all the tales I’ve come across over the years. However, having experienced RyanAir, easyJet, EuroWings, Wizz, and others, I believe I’ll manage just fine.

There are occasions when I favor “basic economy” (particularly on airlines like American, where I receive a checked bag and boarding group 5 due to holding their credit card), and then there are times when I simply prefer to pay for additional service. I appreciate having options, and if the “low-cost” carriers continue to upgrade their services to compete with legacy airlines in innovative ways, I welcome these developments.

 

[jp10558]

What's especially attractive is that this bundle is priced at only about $20 more than a standard economy fare on a traditional airline with only one checked bag. Considering the minimal price difference, I thought it was a simple choic

Well, yes - if the upgrade bundle was $20 or $50 or maybe even $100 I could see paying it. The issue IME is upgrading at all tends to add $200 per ticket over most of the a la carte options for "Economy Plus" and to actually get more spacious seats you're looking at $700 or more per ticket. Examples in this thread are over $1,000 per ticket more. What's worse is it's more than doubling the price - you could realistically add another traveler or take another flight yourself for the difference. Far be it from me to tell anyone how to spend their money, but I do think that's a small percentage of the general public who find that deal to make sense for them.

What we've found that is even stranger is yes, United jacked their ticket prices up when we checked from Newark to San Deigo vs previous flights out west, but Alaska Airlines had similar to previous prices. The crazy thing is, at least as far as I can tell, is the flight is the same actual plane / flight - I think it's operated by Alaska for United or something.

 

[PcflEZFlng]

~1970, when I was going to school in St. Louis, I could fly Braniff between STL and MSP. Student fare on Braniff was 2/3 price, guaranteed seat. Coach fare was around $100, so I was generally paying ~$65-$70 when I flew.

In 1973 I arrived in the Bay Area from St. Louis. PSA was operating exclusively within CA, and so fares were not regulated by the FAA. The distance from STL to MSP isn't much different from the distance between SFO and LAX. Fares on PSA between SFO and LAX were $19, with planes leaving every hour (every half hour in peak morning and evening). No reservations taken. The way to guarantee space on the plane was to buy a ticket. No reserved seats; first come, first served for seating.

I knew right away that was the impact of fare deregulation.

My own (similar) memories. In 1976, I bought my first-ever plane ticket: RT $313 SAN-ATL coach. Had to drive to the airport, cash in hand, to pay for the paper ticket. That would be $1760 in 2024 dollars. Starting the next year, when I was in college in the Bay Area, I regularly flew home and back (between SJC and SAN) for about $70 on PSA (about $380 in today's $). The $19 fares were long gone by then, but I remember as a kid seeing PSA billboards in Los Angeles in the late 1960s advertising one-way fares to SFO for $13.

 

[beejaybee]

As I recall, ticket prices were high in the early 80s. @$500 r/t CLE-PDX!

Unlike doug, despite our age, we are flying cheap. We booked basic economy for r/t to BOS on AA, paying for seat purchase there but not back. We were seated together on both legs of the return flight since AA tries to seat basic fare companions together. Their baggage policy for basic includes a normal carryon. Because I have an AA affinity cc, we could each check a bag for "free" which we did on the way home. Friends with us who don't have an AA cc, had their bags checked through free of charge because by the time they boarded the overheads were filling fast.

For our March flights to LAX, we are booked r/t nonstop from CLE basic on UA for $100 less per ticket. (no red-eye!!). UA's policy is that affinity cc holders can check a bag; however, only the cc holder gets this privilege, and no normal carryon allowed! Clear statement to not expect to be seated together. We each have our own UA cc, so we purchased our tickets separately. I may pay the upcharge to select my seat for easy access to the lavatory.

Dreading our short flight from SOU to DUB this summer due to AerLIngus' draconian baggage rules! We will be flying that after a cruise to the chilly Norwegian fjords. I posted a query about my luggage worries on another forum and was lambasted by a frequent poster there for being so foolish as to book this flight when we could have flown from a London airport to DUB- yeah, sure, Ryanair. Be kind, Tuggers!

 

[sponger76]

Well, yes - if the upgrade bundle was $20 or $50 or maybe even $100 I could see paying it. The issue IME is upgrading at all tends to add $200 per ticket over most of the a la carte options for "Economy Plus" and to actually get more spacious seats you're looking at $700 or more per ticket. Examples in this thread are over $1,000 per ticket more. What's worse is it's more than doubling the price - you could realistically add another traveler or take another flight yourself for the difference. Far be it from me to tell anyone how to spend their money, but I do think that's a small percentage of the general public who find that deal to make sense for them.

What we've found that is even stranger is yes, United jacked their ticket prices up when we checked from Newark to San Deigo vs previous flights out west, but Alaska Airlines had similar to previous prices. The crazy thing is, at least as far as I can tell, is the flight is the same actual plane / flight - I think it's operated by Alaska for United or something.

AFAIK, United and Alaska don't have any code share agreements and haven't for at least a dozen years. Code-sharing is what it's called when one airline has the ability to use its own flight number to sell seats on certain flights that are actually operated by another airline. For example, United selling tickets for United flight 9999 from Newark to San Diego which is actually operated by Alaska as Alaska flight 5555 from Newark to San Diego. By the way, Alaska doesn't operate any nonstop flights between Newark and San Diego. Neither are hubs for them. Alaska would route you via one of their hubs, most likely Seattle, to fly between those two airports.

 

[jp10558]

AFAIK, United and Alaska don't have any code share agreements and haven't for at least a dozen years. Code-sharing is what it's called when one airline has the ability to use its own flight number to sell seats on certain flights that are actually operated by another airline. For example, United selling tickets for United flight 9999 from Newark to San Diego which is actually operated by Alaska as Alaska flight 5555 from Newark to San Diego. By the way, Alaska doesn't operate any nonstop flights between Newark and San Diego. Neither are hubs for them. Alaska would route you via one of their hubs, most likely Seattle, to fly between those two airports.

IDK, it was weird, cause I thought all that (and many other Alaska flights did have a layover), but we searched via various search engines and then booked direct with Alaska Air, and it was non-stop from Newark to San Diego and the times were exactly the same departure and arrival as a United flight that was otherwise 2x the ticket price. We got confirmation from Alaska. I hope we're not sadly surprised in March when we go to get on the plane. I figure at least booked via the Alaska site we can bitch to them in the worst case.

 

[dougp26364]

AFAIK, United and Alaska don't have any code share agreements and haven't for at least a dozen years. Code-sharing is what it's called when one airline has the ability to use its own flight number to sell seats on certain flights that are actually operated by another airline. For example, United selling tickets for United flight 9999 from Newark to San Diego which is actually operated by Alaska as Alaska flight 5555 from Newark to San Diego. By the way, Alaska doesn't operate any nonstop flights between Newark and San Diego. Neither are hubs for them. Alaska would route you via one of their hubs, most likely Seattle, to fly between those two airports.

Alaska might not have had a codeshare with United, but what about Hawaiian Airlines?

 

[sponger76]

Alaska might not have had a codeshare with United, but what about Hawaiian Airlines?

I know UA has sold tickets on HA-operated interisland flights on a code share basis; HA definitely doesn't fly between Newark and San Diego. If anything HA might sell seats on UA-operated flights on the mainland but not the other way around.

 

[dougp26364]

FWIW, a few years ago I read an article on where airlines actually derive their income as related to ticket prices and excluding incidentals such as badge fees. Essentially, the few first class seats generated more income than all the economy seats on each flight was the gist if the article. Perhaps airlines have learned a moderate premium similar to, n]but not quite the expanse of first class, is a better way to generate revenue per seat per flight.

We’ve been flying first class, which is really a business class offering when you fly domestically. If they offered something comparable but with a lower price and fewer perks, say a seating configuration of 2:2 with wider seat but not as much leg room and not as plush seats, I’d be interested in seeing what that looked like for price. I don’t need the meals or the booze or the booze on a domestic flight and, even though first class seats look comfy, they’re not all that and a bag of chips. I really just don’t want as much hassle with the boarding process and I don’t want a middle seat or to be sitting next to some strange ranger for 2 to 4 hours.

The premium comfort plus style cabin is nice, but it doesn’t get rid of that cursed middle seat, and that’s what we really hate about economy class seating or even premium economy class seating.

 

[Ken555]

If they offered something comparable but with a lower price and fewer perks, say a seating configuration of 2:2 with wider seat but not as much leg room and not as plush seats, I’d be interested in seeing what that looked like for price.

The premium comfort plus style cabin is nice, but it doesn’t get rid of that cursed middle seat, and that’s what we really hate about economy class seating or even premium economy class seating.

Refer to post 9 for further information. The type of seating I mentioned has been offered in Europe for years. Many aircraft are designed with features that allow you to raise the armrests, effectively expanding the seating width. This design utilizes what would typically be reserved for the middle seat, thus providing a more spacious and comfortable experience for passengers.

In terms of class selection, I have a favorable opinion of premium economy. Most PE have seat widths ranging from 18 to 19 inches, which I find to be ample space for added comfort during flights. Unfortunately, this is rarely offered on domestic flights.

 

[T_R_Oglodyte]

Perhaps airlines have learned a moderate premium similar to, but not quite the expanse of first class, is a better way to generate revenue per seat per flight.

If this is true, I contend that is a change in the market, not a change made by airlines. Back when discount carriers entered the market, many airlines tried a strategy of providing more service r quality for a bit more money. Almost every operator that tried that got creamed in the marketplace. The number of people who were willing to pay more money for a less than bare bones flight experience was not enough for profitable operations. Given a choice between paying a bit more money for a better experience vs. saving money and having a minimal service, the public clearly decided that they preferred to pay less, receive less service, and then complain about how the quality of airline service was declining.

After enough years of experiencing that minimal travel experience, enough people have decided to pay more to get a better experience so that providing tiered service is now viable.

 

[sponger76]

If this is true, I contend that is a change in the market, not a change made by airlines. Back when discount carriers entered the market, many airlines tried a strategy of providing more service r quality for a bit more money. Almost every operator that tried that got creamed in the marketplace. The number of people who were willing to pay more money for a less than bare bones flight experience was not enough for profitable operations. Given a choice between paying a bit more money for a better experience vs. saving money and having a minimal service, the public clearly decided that they preferred to pay less, receive less service, and then complain about how the quality of airline service was declining.

After enough years of experiencing that minimal travel experience, enough people have decided to pay more to get a better experience so that providing tiered service is now viable.

I think this is exactly what happened.

 

[Ken555]

If this is true, I contend that is a change in the market, not a change made by airlines.

In recent years, the landscape of international air travel has transformed significantly, particularly in terms of seating options available to passengers. Traditionally, travelers had a limited choice among three main classes: standard Economy, Business Class, and First Class. However, with many airlines phasing out First Class in response to changing market demands, a new player emerged—Premium Economy. This seating class has created a pivotal shift in the airline industry, offering a compelling alternative for flyers who desire enhanced comfort and additional amenities without the hefty price tag that accompanies Business Class.

Premium Economy not only enhances passenger comfort through features like increased seat width, extra legroom, and improved meal services but also introduces an overall elevated travel experience. Similarly, the domestic aviation sector saw the rise of “Economy Plus,” which provides travelers with added legroom and designated overhead space, catering to those who are willing to invest a bit more for a more pleasant journey.

This evolution towards more diverse seating options can be traced back to airlines' recognition of a lucrative opportunity to enhance the overall passenger experience. Detailed market research conducted by various airlines revealed a clear willingness among travelers to pay extra for upgraded amenities. Features such as more spacious seating, improved in-flight services, priority boarding, and enhanced personal entertainment systems became highly sought after. In response to these insights, airlines began implementing not only the introduction of these new service classes but also their expansion across a broader range of routes.

As competition among airlines became increasingly fierce, carriers understood that the addition of more Premium Economy and Economy Plus seats could significantly bolster their revenue streams while appealing to a wider demographic of travelers. This strategic approach has yielded positive results; it has led to a remarkable increase in the availability of these seating options and a reevaluation of what passengers now expect during their flights. The airline industry’s adaptability to consumer preferences reflects a distinct trend toward prioritizing comfort and value in air travel.

Interestingly, even low-cost carriers, often referred to as “discount airlines,” are beginning to embrace this trend by enhancing the services they offer. For instance, Frontier Airlines recently announced plans to introduce First Class seating in 2025, a clear indication that these carriers are striving to provide a more competitive and comfortable flying experience, mirroring some offerings traditionally seen in legacy carriers. As airlines continue to innovate and cater to the evolving desires of travelers, the future of air travel promises to be shaped by an increasing emphasis on comfort, choice, and value.

 

[WaikikiFirst]

Hello? Hello? In this entire thread, in that article, is there ever any use of the term "Market Segmentation"? Companies have been doing their best to segment markets for probably 1,000 yrs. I'll bet 1,000 yrs ago there was a French vintner of wine who sold its vins fins to royalty for a huge price and sold spillage to peasants for practically nothing, and had something in between.

This must be the 4th thread on highly similar topics that never mention "Market Segmentation", even though that is really the entire crux of the matter. To successfully segment the markets, they have to
a) define the segments properly
b) produce products or services that are different enough to segment and still acceptable to all segments
c) find prices that match

Trying to tweaze out some significant societal trend when companies try to re-segment ASSUMES they know what they are doing, which is very often not the case. Is this quote genius?

What we're doing isn't working so try something different

 

[WaikikiFirst]

If this is true, I contend that is a change in the market, not a change made by airlines.

You can contend what you want. You don't know. I don't know. The author of this article most definitely doesn't know. What is the background in economics and business of the author of this article? Probably very low.

Back when discount carriers entered the market, many airlines tried a strategy of providing more service r quality for a bit more money. Almost every operator that tried that got creamed in the marketplace.

Most likely explanation is that the extra "service" the defined was just not any good. Airlines are great at not being good. It is a terrible industry made much worse by the heavy hand of govt regulation. So much of the experience of air travel is putrified by govt regulations, govt interference, that they have a steep slope to climb to provide enjoyable service. If they don't crash, that is a huge win. Beyond that, mostly smoke & mirrors, more accurately CARROT & STICK or STICK, THEN CARROT.

Given a choice between paying a bit more money for a better experience vs. saving money and having a minimal service, the public clearly decided that they preferred to pay less, receive less service, and then complain about how the quality of airline service was declining.

because the "better" experience was still lousy

After enough years of experiencing that minimal travel experience, enough people have decided to pay more to get a better experience so that providing tiered service is now viable

Segmenting markets has always been viable. Heck, I bet the 3 Wise Men could have bought better camels. What makes it less viable is the overall lousy experience created by govt regulations, from the second you enter the airport's property til you exit the property of the airport at your destination. You could think of the heavy hand of the govt as a FRICTION that makes everything more difficult, other than crashing. Not crashing is a service I am happy to pay extra for, and to put up with a bunch of friction for.

Most likely thing causing this (other than the simple fact that companies are constantly TRYING SOMETHING NEW) is that people probably UNDERESTIMATED JUST HOW LOUSY A SERVICE AN AIRLINE WAS WILLING TO PROVIDE). Make the basic service LOUSY enough (the STICK) and people will trade up to something not so lousy (teh CARROT).