Air Transportation Prices Derailed

Air Transportation Prices Derailed

Air Transportation Prices Derailed

Air travel is increasingly becoming more and more expensive with less and less perks. Have you ever noticed that the taxes and fees cost twice as much as the actual cost of air transportation? Look at your travel receipt and you would know what I am talking about. It seems very unfair, right? What about the decline of the all-inclusive seat, that is, a free meal and 2 pieces of checked luggage included? Not long ago, you would be given an allowance for 2 pieces of 70 pounds each, luggage allowance. Present day, you are limited to 50 pounds, if flying economy class, and you may even have to pay for each checked luggage. Granted, 70 pounds may be too heavy to lift for the average person, but packing a suitcase with only 50 pounds can be hurtful when you take that long awaited vacation only to realize you can’t return home with the entire souvenir store in tow.

Fuel prices, competition, demand and supply are the four major factors that influenced these changes, with the first two factors accounting for the most damage theoretically. Every time a price fluctuates higher, airlines pass on the bill to consumers. Many articles will tell you that airline companies barely make any profit and some airlines use this fact to cram in more seats, destroying what little elbow room you once enjoyed before. The truth of the matter is, some airlines have indeed gone bankrupt while others have been merged, causing a lack of competition and incentive to gain sales. With two, sometimes three major airlines in a developed country and millions of consumers flying every day, airlines can charge as much as they please because options are limited to us, as customers.

Let’s put the fees into perspective. To fly a plane, you need to have fuel so you have the cost of fuel, you also need at least 2 to 3 pilots depending on the size of the plane and the length of your journey. Air stewards are also a must and for long haul travel and international flights, you would have food, drinks and snacks onboard. You would also have personnel working in varying positions, such as administration, IT, accounting, baggage handlers, mechanics and customer service representatives. Then you have the fees and taxes that are mandatory such as security, transportation tax, customs fees, immigration fees, international tax, facility fee or basically parking fee for using the airport, to name a few. Each fee may seem minimal when looked at it individually, but if you really sit and add them up together, they amount to a lot more than you would have bargained for.

Prices for air transportation would no longer be as low as before, only fluctuating based on the load factor, that is, amount of person needed to fill the plane. Airlines would lower prices to fill planes but this only happens when both demand and load factor are low. Knowing when to get cheap airfare is rather difficult but you may strike luck if you are flexible when you travel. In reality, business travellers and leisure travellers are the two types of customers that cause prices to fluctuate.