Every holiday season people travel and the media celebrate the yearly tradition of complaining about how much airfare costs have increased.
CBS’s “The Early Show” got an early start on the grumbling Oct. 30. [1]CBSNews.com and “Early Show” co-host Julie Chen warned viewers about flying the “pricey skies” this “hardly festive” holiday season because airfares have gone “way up.” Chen said fares were “absolutely going through the roof.”
“I want to put up two graphics that show how much prices have increased in the last year. To fly from
Ziff qualified Chen’s numbers by saying those figure only tracked Thanksgiving specific airfare and opposed Chen’s assumption that airfares were unusually high.
“What we are starting to see, finally, finally for the first time as long as I can remember for the holidays, we are starting to see some holiday fares soften,” Ziff said. “Now when I say soften, I’m not saying you are gonna get a steal of a deal if you haven’t bought your Thanksgiving ticket. I’m talking about in the past three weeks they’ve come down by about $11. They started on average domestic fares $404, $393. But that’s a big deal because we’ve been riding such high, high, high fares.”
Ziff pointed out that "Airlines have been very candid about the fact that they need to raise their prices.”
The International Air Transport Association (IATA), a trade association representing the airline industry, [2]announced Sept. 3 that the global airline industry will post losses of $5.2 billion in 2008 based on an average crude oil price back then of US$113 per barrel (US$140 for jet fuel).
“The situation remains bleak. The toxic combination of high oil prices and falling demand continues to poison the industry’s profitability. We expect losses of US$5.2 billion this year,” Giovanni Bisignani, IATA’s Director General and CEO said in a press release.
The price of crude has come down significantly, but the airline industry is dealing with an overall drop in traffic (2.9 percent year over year in September) and the financial crisis.
"The deterioration in traffic is alarmingly fast paced and and widespread … Even the good news that the oil price has fallen to half its July peak is not enough to offset the impact of the drop in demand," Bisignani [3]said to the ‘Autopia’ blog at Wired.com Oct. 28.
“There are several elements of the current slowdown that have the IATA really freaked out. One is the timing of the numbers. They show that demand began weakening a full month before the brunt of the credit and stock market fiascos, and IATA anticipates that traffic will tumble further as the full impact of these events is felt,” ‘Autopia’ blogger Dave Demerjian wrote.