Tag Archives for airfare.
United CEO Scott Kirby keeps insisting airfares should rise, and that airlines are too timid to charge what passengers will pay. But after years of predictions that have not panned out, the flaw in his theory is simple: airlines hate empty seats, and supply and demand still set fares no matter how badly CEOs want prices higher.
European low cost airline Volotea has crossed a line I’ve never seen from a commercial carrier before. They’re trying to charge customers extra for fuel that already bought their tickets. They say they’ll deny boarding to anyone that doesn’t pay an extra €7 to fly because the cost of jet fuel has gone up so much.
Airlines keep pointing to higher fuel costs when they raise bag fees, and that is rhetorically powerful because passengers understandably expect lower costs to mean lower prices. But that is not how airline pricing really works: fees are one tool carriers use to manage total revenue, and they have no reason to promise those fees will fall just because one input cost does.
Etihad is selling seats for half price not because Gulf fuel is cheap, but because demand to and through the UAE has weakened enough that the airline is cutting fares to fill planes. It has slashed some fares by up to 50% through June even as Emirates and Qatar have not matched those discounts.
Former American Airlines CEO Doug Parker uses an Airlines Confidential “101 class” on revenue management to explain how airlines really make money — and, in the process, shows why American’s own cost-and-density strategy, Spirit/Frontier obsession, and mishandled Basic Economy put it on the wrong side of the industry’s premium pivot.
CNBC host Andrew Ross Sorkin casually admitted on Squawk Box that he just skiplagged a ticket and saved about $1,500, blaming the trick on a travel agent and openly wondering whether he was supposed to cancel the extra legs. Throwaway ticketing is a commercial dispute over pricing, not a moral failing by consumers, even if it is something most people probably should not do often.
A 239-mile Arctic hop in coach costs nearly $4,000 roundtrip—which can be more than a lie-flat seat from New York to London. Here’s why.
American Airlines, United and Delta all now charge more on some routes when a traveling is flying on their own than when they’re booking for two or more passengers – at least on some routes. But there may be a simple way around it.
The goal of any pricing strategy is to grow net revenue. That could mean charging a customer more. But it’s too easy to avoid higher AI fares. The real win is that AI can help airlines offer more low fares to more people without cannibalizing high fare revenue.
Twenty percent of Delta Air Lines airfares will be priced by AI by the end of the year, working to figure out how much each individual customer is willing to pay them.
Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel -- a topic he has covered since 2002.
Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »
