The Cost of Flying Just Went Up – Thank Government


Thanks to the United States Government, the cost of flying from here to there is about to go up.

Why?

Economics.

Just as sure as you can’t change the laws of physics, you are unable to change the laws of economics.

In a similar manner that we saw the cost of credit cards go up when companies could no longer charge the interest rates they wanted to the people they wanted, the cost of purchasing a ticket is going to go up.  All in the name of “public good”, “consumer protection” and “protecting the little guy”.

See, already airlines are being forced to schedule flights that are chuck full of people.  They’re doing this because they need to make sure every single seat is full in order to make the flight profitable.  Part of the strategy in doing this is to over sell the flight by juuuuust a bit in order to accommodate the occasional no show.  This works out pretty well.  Until the no-shows show.  Then we have an over booked flight and someone is out of luck.

In the past, the penalty for that was minimal.  A new booking and maybe airline “bucks” that could be used on future flights.

Now, with new rules and stiffer penalties airlines will be paying more.  A lot more:

The new fees, slated to take effect later this year, will see displaced passengers receiving double their ticket price, up to a maximum of $800 instead of the current $400, if the airline can get them to their destination within a reasonable amount of time (defined as within one to two hours of the schedule for domestic flights and within one to four hours for international flights). Passengers stalled for longer periods will receive four times the ticket price, up to a maximum of $1,300.

Guess what?  The price of tickets are going to go up by the amount of over booked tickets the airline DOESN’T sell AND the anticipated cost of the fine.  Divide that out among the number of seats on the plane and voila!  The added price of an airline ticket.

Thanks Uncle Sam.

Thanks for nothin’!

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5 comments
  1. Awesome!

    Also noticed the new look for your site. I cannot decide if I like or dislike…and I’m a decider…;-)

  2. My vote’s a “no”, but I can probably get used to it.

    At any rate, here’s yet another example of how government goes too far. The airlines were colluding to drop the value of their reparations for overbooking, delays, or cancels. What once was a $600 voucher quickly became a $400 voucher and most recently, a $125 voucher ONLY because I was status.

    So on the one hand I’m glad the airlines have to “smarten up”, but on the other I agree that this is probably the wrong way to do it. Same as when they punished airlines with fines for remaining on the tarmac too long. They ended up just cancelling flights altogether.

    To this issue, many of the feeder planes are now down 50 seat CRJ’s. Doesn’t take long for the remaining seats to hit premium prices in that situation, so watch travel go down even though airline revenues may not show it.

    Oh well. For 5 days of the week they have us by the short and curlies. Business travel is for the most part, necessary nowadays so unless there’s more competition emerging I think we’ll be screwed for a while.

  3. pino said:

    Also noticed the new look for your site. I cannot decide if I like or dislike…and I’m a decider…;-)

    And another take:

    My vote’s a “no”, but I can probably get used to it.

    I think I agree with you Vern; I don’t know that I like it. And Sean, given that you are a decider, I suspect you are waffling out of politeness….

    Look for a new look later ;-(

  4. Wasn’t trying to burst your bubble man, just keeping it real. 😉 Content is fabulous, though!

    • pino said:

      Content is fabulous, though!

      Thanks.

      Wasn’t trying to burst your bubble man, just keeping it real.

      I loves me some feedback. I’ve tried out 3-4 themes tonight.

      Am tired.

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