Question
Airlines Raise Ticket Prices as Fuel Costs Surge Link: https://www.wsj.com/articles/airlines-raise-ticket-prices-as-fuel-costs-surge-1528310136 Airlines have raised ticket prices due to rising fuel costs. In fact, fuel costs have
Airlines Raise Ticket Prices as Fuel Costs Surge
Link: https://www.wsj.com/articles/airlines-raise-ticket-prices-as-fuel-costs-surge-1528310136
Airlines have raised ticket prices due to rising fuel costs. In fact, fuel costs have increased over 50% in the past year. Delta claims that with the increased fares, it could take up to 12 months to recoup the money spent on fuel. The average airline ticket has fallen over the past four years due to a drop in fuel prices. An analyst at JP Morgan suggested that airlines should add surcharges instead of raising fare is it would make the recouping process faster. It should be noted that fuel surcharges are not allowed on domestic flights. The surcharges do pose an issue for corporate travelers as surcharges are more difficult to account for and would prefer the increased fare. Most of the airlines are confident that their businesses can survive the fuel cost surge as they expect it to be temporary.
can you please help ansewring the following:
1) If airlines are losing money on fuel costs, would it be easier on consumers for the airlines to raise prices in other areas (luggage, snacks, etc.)?
2) Would it be beneficial to temporarily suspend less popular routes in order to keep prices low?
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