Saturday, May 10, 2008

Airline Flight Prices Returning to Pre Deregulation Numbers

For those that remember flying back before the U.S. Government deregulated the airline industry, you may remember that there seemed to be less people flying and that for the most part it was a business thing more than a vacation mode of transportation. You may also remember that the average cross country ticket was way higher than what has been costing to travel in recent years. Now, after years of low airfare, the costs are going up. With inflation (lets not talk about the U.S. dollar being where it is right now) it is still cheaper to fly now than it was 20 plus years ago. Just like the cruising industry, where prices dropped or maintained the same level for the last two to three decades, it has become more affordable for the average Joe to fly. The question remains as to how high prices will go before planes start to fly without passengers. Supply and demand is a fragile system that works both ways and we the consumer are going to see a lot more tweaking of how airlines operate as the prices rise. There is a balance out there, its just a matter of finding it, how long it will take, and how many airlines will get hurt in the process.

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