Last updated: 07:00 PM ET, Wed December 02 2015

Should Plane Tickets be Cheaper?

Airlines & Airports | Paul Thompson | December 02, 2015

Should Plane Tickets be Cheaper?

Photo courtesy of Thinkstock

A recent CNN Money article bemoaned the fact that airlines are currently saving billions in fuel costs while passenger savings is in the single digits.

Along with the TSA security hassles, the cost of plane tickets is one of the most common gripes from air travelers. Most people have heard about the record profits airlines have been making for the past couple of years, and argue that plane tickets should be cheaper. Let’s take a look at why that isn’t necessarily the case.

Airlines have three main expenses — employee salary, aircraft (purchase and maintenance), and fuel. For most airlines, fuel is the largest and most volatile expense, and it is the primary factor in determining an airline’s profitability. The price of jet fuel is directly tied into the price of oil, so when oil spikes, so does jet fuel. During these periods, airlines make less or even lose money, sometimes resulting in layoffs or furloughs for their employees. Nobody wants that.

“But what about all of that money they’re making” you may be asking? Many of us feel like airlines should be passing some of that savings on to us, and that’s a fair thing to consider. However, most of the profit is being reinvested in ways that are improving our flying experiences. All of the big airlines are retiring or refurbishing their oldest planes, and replacing them with new ones, which are more fuel efficient, quieter and pollute less.

Inside most of these planes, there is Wi-Fi and streaming video entertainment available, either on a personal TV at your seat or through your own portable electronic device. Sometimes it’s free, sometimes, it’s not. But it’s there and available should you need it. No longer are you are you forced to stare at a tiny TV screen hanging from the ceiling to watch the same in-flight movie that everybody else is watching. There are options. Even the beer many airlines serve have gotten better over the past few years.

In the late 1950s, over 80 percent of the country had never been on a plane, because the cost was too prohibitive for most. The government used to regulate the cost of plane tickets and told certain airlines to fly certain routes, which wasn’t good for us as passengers, because there was very little competition to keep fares low.

But in 1978, Uncle Sam stopped dictating ticket prices, and prices plummeted. American, Delta, Southwest and United were the only U.S. airlines around then that are still with us today, thanks to bankruptcies and waves of mergers and consolidation. It cost $33 to fly one way from Chicago to New York in 1955. Adjusted for inflation, that comes out to $280. Browsing, I can book a round-trip on JetBlue in January from Chicago to JFK for only $152.20. That is pretty incredible.

That’s right, flying cost more sixty years ago than it does today. It’s also faster and safer than ever before. The whole process of flying is like magic to me, and being in a window seat while watching the world pass by below is my happy place. I like to tell people that flying is a privilege, not a right. So the next time you’re hurtling through the air at almost 600 mph at seven miles over the earth while bemoaning the cost of your ticket, remember there are other ways to get around if you’re not in a hurry.


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