What do you think about the airlines charging for meals which once were given “free” to passengers?
When crude oil was $75 a barrel last year, fuel was about 30% of the ticket price, and airlines were losing money. Now that crude’s up to $135 a barrel, ticket prices are up $100 a seat or more — and yet, fuel is between 50% (for the most expensive airline) and 75% (for the cheap guys) of the ticket cost. The problem that the airlines face is that the number of planes in service only makes sense at much lower fuel costs, or much higher ticket prices. But they can only raise prices so fast. The law prohibits them from getting together in a meeting to agree that they’ll all raise prices in step, which means that every price increase carries the risk that all their customers will run off to the competition. So they’re pulling planes out of service — but in a gradual way, lest the competition not pull planes out of service, and thereby grab all the business. Thanks to price-comparison web sites, the customers have near-perfect knowledge of ticket prices. It costs so much per seat to fly
