It continues. The debate about air fares and viability of airline because of the increasing fuel prices.
On the one hand, there is much criticism of airline management. And the other, the rising cost of airfares. Well people, get a grip!
My big gripe is that airlines charge a Fuel Levy on flights. This tends to be a flat amount. Hardly fair to charge $65 for a flight LAX (Los Angeles) to SFO (San Francisco) and the same $65 for a flight LAX to JFK (New York). But they do! Also, $15 for your checked in bag. Crazy!
John Griffiths says to airline managers:
- Charge enough IN the FARE to recoup your fuel costs
- Charge a proportionate amount for extras based on flight distance
- Take a long term view, forget about this year’s annual bonus
- Start to really MANAGE you airlines finances
If the business were a single owner/driver Cab, then I am sure that the manager would either up the fares, or park the cab. The other alternative is to go bust.
And, John Griffiths says to airline managers:
- When/If the price of fuel drops, then you can drop your fares and look great.
- OR… Just maintain a management position if fuel prices continue to rise.
If your aircraft leasing rates went to 20% p.a. and state taxes rose, would you not raise fares?
If passenger loads drop because of fare increase, then curtail a few flights.
If too many segments are dropped, and the service is desirable/critical, then hold your hand out for some government funding. – Just like all those old rice farmers and tobacco farmers who are PAID not to produce. Crazy situation!
If bookings fall, and you order less new planes, will not Mr Boeing drop his price?
John Griffiths, trying to solve the world’s problems
