Fallout: The Financial Crisis

Airfares dropping in time for holidays

Stacey Vanek Smith Nov 10, 2008
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Travelers try to beat the rush at the airport iStockPhoto.com
Fallout: The Financial Crisis

Airfares dropping in time for holidays

Stacey Vanek Smith Nov 10, 2008
Travelers try to beat the rush at the airport iStockPhoto.com
HTML EMBED:
COPY

TEXT OF STORY

Kai Ryssdal:
When oil prices started shooting up a year and a half or so ago, airlines got hurt worse than most. And they passed a lot of that hurt on to us.
With higher ticket prices and extra fees for everything from bags to blankets and pillows, going home for the holidays quickly became staying home for the holidays.
But now that crude’s dropped from its record high of $147 this past summer to plus or minus $60 today, you’d think travelers might get a break. And some of us are. Marketplace’s Stacey Vanek-Smith reports.


Stacey Vanek-Smith:
Last week, airlines rolled back many of those fuel surcharges they’d been tacking onto airfares. That means tickets will cost between $25 and $500 less. And travelers won’t have to look too far to find the deals. David Field, editor of Airline Business Magazine, says they’ll be in your inbox.

David Field: The Internet has made it possible for carriers to micro-target their promotions rather than just running a big ad.

But Field says don’t expect the fare wars of Christmases past.

Field: You’ll see ads saying 40 percent off, 60 percent off. But 60 percent of a fare that’s already 20 or 30 or 40 percent higher than it was a year ago, isn’t as good a deal. The days of the $99 fare from New York to California are gone.

Lower fuel prices are giving airlines a break, but the industry still faces turbulence says aviation analyst Richard Aboulafia. He says business and international travel are way down. And, he says, airline profits have been hammered over the past few years.

Richard Aboulafia: The good news is that the fuel cost reduction is like winning the lottery for the airlines. The bad news is that the lottery ticket winner was heavily in debt.

That means passengers will probably have to keep paying fees for checked bags and blankets says Airline Business Magazine’s David Field.

Field: Fees are very much like diamonds — they’re forever.

Field says the airlines have become addicted to fees because they let carriers keep fares low and still add to the bottom line.

I’m Stacey Vanek-Smith for Marketplace.

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