When adjusted for inflation, airline fares have gone way down over the past 15 years, while fuel costs have soared. Is it any wonder airlines are going bankrupt left and right?
Here’s an opinion I know many people will disagree with: Airline travel should be way more expensive than it is. And those checked baggage fees are totally justified – even for the first bag.
I know these beliefs put me in the minority, but it’s a fact that many airlines have struggled to stay in business (American was the latest to file for bankruptcy), and the bottom-line reason is that they’re simply not charging enough for their services.
In the past year, I’ve purchased round-trip flights from Chicago to Los Angeles for $150 and from Chicago to Miami for $144, all fees included. You’d pay at least triple those amounts to go by Greyhound or Amtrak, which are supposedly the cheapest means of travel!
I also saw round-trip flights to Iceland for $500. Those are insane prices! As a consumer, I’m thrilled to see these deals. But as a person with some reasonable level of concern for our economy, I can see why the airlines are struggling.
This is anecdotal evidence, of course, and you could locate expensive flights as well. But overall, flight costs are just too low.
Flight costs have not kept up with inflation
I’m not an expert on aviation, so I don’t necessarily know where to find the most reliable data on the subject. But I know that as the costs of gasoline and manpower have soared over the past two decades, flight costs have not kept up.
This site (broken link removed) has an interesting chart, for those who like seeing stats in visual form. Here’s the key bit of news from the piece: “When calculated in 1995 dollar value, the average fare price has decreased about 20 percent in the last 15 years.”
So fare prices are going down – way down – when adjusted for inflation, even while fuel costs have gone through the roof. It’s no wonder that many airlines are hemorrhaging money.
Pilot salaries and benefits are dropping
Another reason flight costs should go up is that pilots need to be paid more. Nobody really trains to be a pilot anymore. When most of the current pilots retire within the next 20 years, there’s going to be no one left to fly the planes. One way to avoid this problem is to raise pilots’ pay, which can only happen by charging substantially more for flights. It will suck for those of us who love to travel, but it must be done.
Hero pilot Chesley Sullenberger, who successfully landed his disabled plane in the Hudson River in 2009, appeared before Congress after that incident and gave heartbreaking testimony about how many commercial pilots are struggling to make ends meet.
He said that many are now forced to take second jobs because their pay has been slashed so dramatically they can’t support themselves on a pilot’s salary alone. That revelation is shocking and highly troubling.
Those interested in aviation issues should watch the video of his testimony to get some context on the pilots’ point of view. Check it out here. (Fast forward to 2:47 to get right to the good stuff.)
Why charging for checked bags is the best solution
The main reason people are upset about paying for checked baggage is that they didn’t have to pay for it in the past. It’s a psychological thing. It’s all in your head! I get it – when companies give consumers something (e.g., free bag checking) and then take it away, it can be upsetting. But consider the alternative.
Which would you rather have: A 20%, across-the-board price increase on all flights everywhere in the world. Or, an effort to keep base flight costs relatively stable, and instead start charging for checked bags, meals, and other amenities?
The latter option is certainly better, because it still gives budget travelers some options. You don’t have to buy a meal. And you don’t have to check a bag. If you really want to pinch your pennies, there are ways around these airline fees. There would not be any way around an all-out base fare increase.
Frankly, charging for checked baggage makes sense. If you check a bag, you’re requiring extra work on the part of the airline, which needs to inspect the bag, transport it to the plane, and transport it to the terminal after landing. That extra manpower costs money. So logically, checked bags should cost extra.
Some airlines have found a way to post profits, even in these difficult times for the industry. As ABC News points out, airlines that are already profitable and theoretically don’t “need” baggage fees are putting the revenue from such fees to good use by, for instance, buying new, more fuel-efficient planes – something that is long overdue in many cases!
Airlines are not making record profits like oil companies
If airlines were making multi-billion-dollar record profits like oil companies and were trying to gouge every last penny from consumers, I would absolutely feel differently. But that’s not the case. Most are just scraping by, trying to compete with low-cost competitors with lower operating costs.
These companies are fighting for their lives and they’re trying to avoid bankruptcy by instituting new fees. I’m pretty sure that’s how our economy is supposed to work. What’s wrong with that? What am I missing?
I haven’t studied the inner workings of the airline industry. This is just my take as a regular dude who travels. I welcome feedback from anyone who wants to present the other side of the story.
Am I out to lunch on this one, or do you agree that airline fees aren’t so bad?