It’s Time to Stop Bitching about Airfares

This miraculous view is far cheaper than most anyone imagines.

There’s a lot not to like about flying these days. Airport security screening is a colossal waste of time that doesn’t make anyone any safer. Airplane seats are smaller and planes are fuller, which brings us all that much closer to the inevitable squalling, temper-tamper-throwing crybaby in the next row. And here I’m just talking about the adults on board.

Adults like Matt Foley whose complaints were deemed serious enough for the Washington Post to highlight in their article Gripes about air travel have some people swearing off certain carriers.    

Matt Foley’s breaking point was the coffee. He wanted a cup of joe on a recent Frontier Airlines flight from Washington to Denver, and a flight attendant asked him for a credit card. ‘A buck-ninety-nine for coffee?’ he says. ‘Really? To charge for nonalcoholic drinks almost made me scream.'”

The truly remarkable thing about Matt’s complaint is how familiar it feels to anyone who’s ever taken a commercial flight. But to someone who never has, surely the criticism sounds ridiculous. That’s because it is. Matt wants a cup of coffee and doesn’t think he should have to pay for it. None of us would ever walk into a Starbucks expecting a free cup of coffee. Why do we expect them on our flights?

The answer is simple. We expect them because we’ve been conditioned to expect them. Over many decades airlines have plied their passengers with all kinds of extras. And it’s not just coffee we’ve come to expect on our flights, but pillows, blankets, entertainment, snacks, and even entire meals.

And while we’ve gotten used to having those things included in the price of our ticket, it’s a mistake to think that they were ever free. Every single thing a business does for us is factored into its price. Bundling the services together under one fare doesn’t make any of them free, even if it wrongly gives that impression.

The worst part of flying

The worst part of flying

And there’s a real downside to all the faux freebies. When businesses bundle a bunch of services together consumers have no choice but to pay for the whole package regardless of whether they want all those products or not. It’s like when we pay for basic cable and get the Lifetime Channel for “free.” Score!

Now it may be true that the small percentage of people who use all of the services in a given bundle really do get a good deal. But most of us end up paying extra for a bunch of stuff we won’t use and don’t value.

In that sense Matt Foley’s outrage is justified. He’d grown accustomed to getting his airline beverage subsidized by the non-coffee drinkers on his flight. Now he’s being asked to pay for what he consumes so everyone else can fly more cheaply.

And that pretty much explains every complaint raised by the Washington Post article. People are pissed because airlines are charging for all kinds of optional services they used to just bundle into their flat fare.

Take, for example, the strange case of Crystal Strange who grouses to the Washington Post that she was “first charged for her checked stroller and then dinged her for overweight baggage as well. ‘We had to take all our bags apart and re-pack’ for being a couple of pounds beyond the limit, she remembers. ‘We were still charged an overweight baggage fee.’”

Leaving aside the trivially simple solution to Crystal’s problem of just packing less crap, why does she think an airline should ship her overweight bags and stroller to her destination free of charge? FedEx wouldn’t do that. More likely they’d quote her a price of several hundred dollars for same-day delivery of the same exact stuff.

And they’d charge that much because it’s expensive to fly heavy things across the country. In addition to the cost of fuel and the cargo space needed to haul it all, there is also an extensive infrastructure required to physically move bags from the check-in counter to the destination carousel.

Rollercoaster rides for your roller bag don’t come cheap

Someone needs to pay for all of that. Crystal apparently thinks that her fellow passengers who didn’t check a bag should chip in so she can check one of unlimited size and weight at no extra cost.

And she thinks that way because that’s exactly how airlines have operated for as long as any of us can remember. By including “free checked bags” in the price of every ticket, airlines essentially overcharge light travelers for the benefit of pack rats.

That’s finally starting to change, and I’m delighted. Instead of being forced to pay for every single thing the airline offers, now I get to choose which services I want and only pay for the ones I value. The result is some truly amazing airline deals.

Of course exploiting the new system takes more work than simply buying the cheapest fare. If you ignore the various rules and restrictions you can easily experience some nasty surprises. And that seems to be where at least some of the complaints arise. You really do need to read the fine print.

But when you do, it’s hard to look at actual airfare pricing and see anything other than great value.

Over the last twelve months we’ve taken a total of 14 flights and flown nearly 24,000 miles. One of the main reasons we’ve flown so much is because it was often less expensive than traveling to the same city by bus or train. One international flight, for example, cost us a mere $34 per ticket.

Our flights were so cheap, in fact, that they were far less expensive than driving the same distance. Assuming we had an average American car (24 MPG) and paid an average price for gasoline ($2.69) the cost for just the fuel is a little over 11 cents per mile. AAA estimates that the total cost of operating an automobile including depreciation, maintenance, insurance, and every other expense is 58 cents per mile. Meanwhile, our flights cost us each just 9 cents per mile, or about one-sixth the price of driving.

So what’s there to complain about?

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16 Comments on “It’s Time to Stop Bitching about Airfares”

  1. Brad August 26, 2015 at 9:25 am #

    Here, here, Brother. I think you’re totally correct. Although, I have to confess not liking the shrinking carry on bag size rules.

    Like

  2. sweetsound August 26, 2015 at 12:50 pm #

    I agree nothing comes for free and it makes sense. However, before we get our pants in a bunch because “People are pissed because airlines are charging for all kinds of optional services they used to just bundle into their flat fare,” we should ask ourselves if the airlines have lowered their prices in order to “un-bundle” those services. If so, then it makes sense that we should pay for them separately. It is perfectly understandable for someone to get upset if they are paying the same *or higher* fare AND being asked to pay extra for things that used to be bundled into the price. Perhaps you haven’t heard of the investigation into possible collusion by the major US airlines for purposely decreasing the amount of seats available in order to charge more for tickets. Or that the airlines are posting record profits. Especially where fuel prices have been so cheap in the past six months or so and they’ve been saving on costs without passing it on to the customer. Of course people feel ripped off! Also please try to remember that while low fares can sometimes be found in America on select flights for specific days, most don’t have the kind of flexibility that you full time travelers do. Nor do we have the European discount airlines like Ryanair or Easyjet on which we can find $34 fares. I’ve been following and enjoying your blog for a long while now, but sometimes you come across as condescending and arrogant and this post takes the cake. Good luck and keep enjoying your travels. I’m out.

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    • Brian August 26, 2015 at 1:58 pm #

      My, someone is feisty about ticket prices. Let me take your multi-part objections in turn:

      1) “We should ask ourselves if the airlines have lowered their prices in order to “un-bundle” those services.”

      According to the Wall Street Journal “inflation-adjusted fares are down 16.3% from their peak in 2000.” So the answer to your question is “Yes” they’ve lowered their prices.

      2) “Perhaps you haven’t heard of the investigation into possible collusion”

      I have, and I’m also inclined to wait until investigations lead to evidence and evidence leads to proof of guilt. But until then, we can look to the fact that air fares are down 16% as evidence that either the airlines are not colluding or, perhaps more likely, that they just really suck at it.

      Also, see #5 below for more evidence.

      3) “Especially where fuel prices have been so cheap in the past six months and they’ve been saving on costs without passing it on to the customer”

      Perhaps you haven’t noticed that all the “fuel surcharges” that airlines used to impose not that long ago are history. That sounds like a price cut to me.

      4) “Airlines are posting record profits.”

      Sorry, this one makes me chuckle.

      Airlines have a long history of losing money so while “record profits” sounds impressive, it’s really not. To see how not impressive airline profits are consider that the GLOBAL airline industry is expected to earn about $29 Billion in profits for all of 2015. Meanwhile Apple, a single company, reported $42 billion in profits in just the last nine months.

      In other words, Apple earns more profits than every company in the global airline industry put together but for some reason I hardly ever hear anyone bitching about the price of their iWhatevers.

      5) “Nor do we have the European discount airlines like Ryanair or Easyjet on which we can find $34 fares.”

      Really? On a whim I pulled up flights from New York City to Chicago for a randomly selected date and found round trip tickets for $81. It’s not $34 (more like $40.50 one-way) but you’d still probably pay more in tolls if you tried to drive that route.

      Here’s Philadelphia to Dallas round trip for $117

      6) “sometimes you come across as condescending and arrogant”

      Well, I can’t argue with you there. 😉

      Like

      • sweetsound August 26, 2015 at 2:23 pm #

        My, someone is good a cherry-picking information to support their argument. Two can play that game. Let me take your responses in turn:

        1) According to the Wall Street Journal, “The U.S. air industry is enjoying some of its strongest profits ever, after years of consolidation and the past year’s plunge in the price of fuel, which had been the industry’s biggest cost. U.S. carriers have earned nearly $25 billion since the start of 2013.” Additionally, WSJ also states, “Government data shows that from 2007 to 2014, the average U.S. domestic fare increased 5% to $391, adjusted for inflation.”
        2) I did not accuse the airlines outright of collusion as you seem to imply, but do try to consider that there might, just might, be a reason for the investigation in the first place? Regardless of the outcome, this news is likely to cause airline customers to feel some indignation.
        3) See #1 for more evidence.
        4) Again, see #1 for more evidence. Additionally, comparing airline profits to Apple profits is comparing oranges, and well, apples. Two different products, two different industries. I’ll consider your point on this moot.
        5) Again, if you had read what I wrote in the first place, I agreed that cheaper flights can be found on selected fares on specific dates. However most of us do not always, or often, or ever, have the luxury of choosing a “randomly selected date” on which to fly.
        6) I’m glad we agree on something.

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        • Brian August 26, 2015 at 4:07 pm #

          For someone who’s trying to cherry-pick data, you sure didn’t add a lot of new data to the discussion. The only thing I see that wasn’t already addressed earlier is the WSJ quote about a real price increase from 2007 to 2014. That compares with my comment that they’ve declined since 2000 (both of which can be true). So to clear the air, here’s what The Saint Louis Federal Reserve Board’s data actually shows. This graph includes all of the data available at the FED, so there’s no cherry picking of dates.

          What I see from this chart are two main trends in ticket prices. A generally increasing price from 1990 to 2000 and a generally decreasing price from 2000 to 2015. What I don’t see is any indication that airlines have been raising prices which is essentially your entire gripe . . .

          “It is perfectly understandable for someone to get upset if they are paying the same *or higher* fare AND being asked to pay extra for things that used to be bundled into the price.”

          There’s nothing in the data that supports this assertion.

          As for the $25 billion in profits, you haven’t explained why you think this is too much for a global industry to earn and why it’s OK for Apple to earn more (just saying they’re different industries / companies isn’t good enough.)

          If we said airlines earned a profit margin of about 3-4% does that sound like too much? How about $7 per passenger? Is that too much? Because both of those numbers also lead to $25 BILLLION (said with my best Dr. Evil voice) in profits.

          Okay.

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          • sweetsound August 26, 2015 at 5:08 pm #

            Thank you for the illuminating graph. I suppose you could look at it as “A generally increasing price from 1990 to 2000 and a generally decreasing price from 2000 to 2015,” or as a generally increasing price from 1990 to 2015. There are many ups and downs from 1990 to 2015, some bigger than others at different times, but overall that looks like a general increase in prices to me. So apparently it is going to have to depend on how you choose to look at the graph.

            I don’t think $25 billion is too much to make in profit necessarily. I do think it is understandable for people to gripe that they’re being nickeled and dimed for things they didn’t have to pay for previously, given the trend of increasing prices and the billions of dollars in profit made by the airlines.

            I also never said that I thought it wasn’t okay for the airlines to earn what they do but that it’s okay for Apple to earn more. And actually the differences in industry and product do matter. It’s impossible to draw accurate comparisons on differing industries and products by dollar amount alone. The best you could do is try to compare ratios i.e. return on assets or profit margin (which you kind of halfway did, and I’m sure Apple’s is much higher than 3%). Even at that, companies in different industries are going to have differing benchmarks, capital structures, even differing customer profiles which are directly related to their product or service and which will affect their profit. For either industry, it’s really not for me to say how much profit is too much, only that myself and millions of other people generally know when we are being ripped off, and of course we don’t like it. But I don’t think most of us are a bunch of crybabies when we don’t get everything we want for free, which seemed to be the general feeling I got from this post and which prompted my original reply.

            Personally, I don’t buy Apple products (at least not new ones) because I don’t think the high cost is worth it and because there are other options available to me. Unfortunately with airlines, sometimes you have no choice but to pay the offered fare, which I think increases the dissatisfaction when being further charged for the small things. (And increases the possibility for collusion, but as you said, whether that has actually happened remains to be seen.)

            I get that the airlines are probably trying to stay competitive with one another so their shareholders will be happy (if not for executive bonuses, which I actually have no idea about and may or may not be an issue with the airlines). At some point that comes at the cost of customer satisfaction though, and hopefully customers will vote with their feet. If there’s much choice in the matter at all.

            Of course, if I had $25 Billlion dollars (also my best Dr. Evil voice, which is pretty terrible to be honest) to spend then I would just take a private jet and the whole thing would be solved.

            Like

            • Brian August 27, 2015 at 4:25 am #

              I’d quibble with the view that the graph shows “generally increasing prices” because almost all that increase occurs before 1994. Over the past twenty years, the trend is pretty much sideways. So if we had to categorize the chart, the best description might be “a lot of volatility but not much else.”

              And stable prices is 100% consistent with this article. What we’re seeing with unbundling is great fares for people who don’t need a lot of extras and who are mindful of the small print. Those great fares are offset against the higher rates paid by people who need or want extra services or who don’t take the time to understand the terms of what they’re buying. So overall, average ticket prices haven’t changed that much even though I doubt highly that Jason would ever have been able to fly LA to Vegas for $44 a decade or even two ago. That, to me, is a huge improvement.

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            • Brian August 27, 2015 at 5:01 am #

              Just for fun, here’s that same chart of real airline ticket prices but with jet fuel prices added for comparison. I was wondering what impact fuel prices have had on airline prices and prior to 2005 it looks like “not much.” Since then, though, fuel prices seem to explain almost all of ticket price moves. Interesting stuff.

              Like

  3. mytimetotravel August 26, 2015 at 1:12 pm #

    Good thing Matt Foley wasn’t flying Norwegian, which charges for water. Since you have to dump water before security, and European airports don’t have water fountains I do think that’s a bit much. Plus, I will be happier paying for my checked bag when airlines actually enforce the carry on limits. Just think, boarding would go much faster, too.

    Like

    • Brian August 26, 2015 at 2:07 pm #

      Heh, yeah. We ran into the no airport water thing for the first time this year. Is that all throughout Europe because we somehow hadn’t encountered it before?

      Like

      • mytimetotravel August 26, 2015 at 3:52 pm #

        Water fountains are much more an American thing than a European one. I believe I may have seen them in a European airport, but I don’t remember which and I certainly don’t count on it. If it had been a longer flight I would have bought water before boarding…. Although the tap water in the bathrooms would probably have been fine, I drink tap water in most of Europe.

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  4. Jason August 26, 2015 at 9:05 pm #

    We were stoked to secure airfares from LA to Vegas on SouthWest for $44, one way. Meant a couple of hours extra layover, considering the peak time price was $187, divided by the 2 extra hours, that’s not a bad cost saving per hour. The price included 2 checked bags, and included in flight non alcoholic drinks and peanuts 😊
    In Australia a similar domestic flight, on a no frills airline, will cost you twice that, no baggage or inflight service included. The secret is to do your research and read the fine print. Work out where you are comfortable in the supply and demand spectrum, in relation to preferred travel times, make your choice and then suck jt up, or enjoy, whichever you decide.
    Now where I don’t agree with Brian is how security screening does not make a difference to how safe we are? Sure it’s far from fool proof, but it must at least deter the opportunistic attacks?

    Like

    • Brian August 27, 2015 at 4:10 am #

      Yup, great deals are out there to be had. Our $34 fares also included checked bags. 🙂

      One thing to consider about airport security is the unintended consequences of making air travel more of a pain in the ass. The more of a hassle it is to get through security the more people will choose alternative means of transportation, all of which are more dangerous than flying. Driving is estimated to be 70 times more dangerous than flying so pushing people away from planes and into cars will result in more highway fatalities even if none of those deaths show up on the evening news.

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  5. Keith August 27, 2015 at 1:30 am #

    I personally have a problem with one of the fees that some budget airlines in Europe have and that is the airport check in fee. It is not the check in fee that bugs me but the fact that you have to have a hard copy of the boarding pass if you want to avoid this fee with online check in. Wizz airlines changes 10 Euros for a printout which to me seems a bit excessive and having to find a place on the road to print a boarding pass is a bit inconvenient.

    Like

    • Brian August 27, 2015 at 4:00 am #

      Hi Keith, I agree that some of the fees and airline practices are deceptive. High fees for not checking in on-line and / or not printing your boarding pass ahead of time are, I think, designed to catch people off guard. While I’m a fan of the new a la carte pricing, I’m not a fan of “gotcha” type practices. Clear disclosure would probably go a long way to solving most people’s gripes.

      Like

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