If you consider yourself a weathered traveler with a long history of domestic and international flights you surely know how it has become hard to find really cheap air tickets. What we considered as "ok" options only ten years ago are now the cheapest fares we can get, and the ongoing trends aren't very optimistic in that sense. Air ticket prices have increased considerably and finding cheap air tickets has become very hard. There's a number of reasons for this situation and you have to understand them very well in order to be realistic about your cheap air ticket expectations these days. So, let's take a closer look at the current state of affairs in the airline industry and learn why cheap air tickets have become such a rare beast.
Falling competition
Some 15 years ago the airline market was a really crowded scene. There were dozens of major, average and small airlines offering a very broad range of flights and ticket prices. But what do we have now? Only three major airlines in the USA, two in Canada and several serving the entire Europe. The industry has changed a lot since 9/11 and especially since the 2008 crisis. Many companies went bankrupt, others merged with larger players, and as a result there are now fewer airlines servicing an ever increasing number of both business and leisure travelers. Needless to say, with less intense competition on the market it's much simpler for the large players to set their own prices - you just have no other choice.
Raising oil prices
It's actually surprising that cheap air tickets are still possible to get in general assuming the tremendous increase in fuel prices over the last two decades. In the late 1990's a gallon of fuel was only $0.50 whereas now it costs at least five times more! And the fuel prices don't show any signs of decline in the future. The airlines have tried taking much of the increased fuel cost upon themselves, but this was actually one of the reasons for the large number of bankruptcies in the industry over the last several years. Eventually, part of the increased fuel cost is now transferred over the customers, so finding cheap air tickets has become more problematic.
Numerous fees
The authorities aren't helping the travelers as well, introducing a wide range of fees that sometimes can make up half of the price you pay for the ticket. All those 9/11, immigration, airport and security fees can make a regular domestic flight really pricey. And the rest of the world seems to catch up with the trend, introducing new fees and taxes that make it harder and harder to get cheap air tickets every year.
Profit-oriented companies
The airline industry has suffered a major blow after the 2008 economic crisis. On the one hand, the collapse of the credit and banking system has shattered the financial stability for many companies. And on the other hand, the declining economy resulted in lower economic activity, fewer travelers and more demand for cheap air tickets. In order to survive in such harsh conditions the companies that have managed to live through the hardest period were forced to reduce the number of flights, thus making sure that all their flights are full, and prefer business travellers, who are traditionally very flexible in terms of ticket price, to leisure travelers, who are rather price-sensitive. And since the overall picture hasn't changed much over the last several years, it's very likely that such a state of affairs will persist for a very long time. Read More......
Falling competition
Some 15 years ago the airline market was a really crowded scene. There were dozens of major, average and small airlines offering a very broad range of flights and ticket prices. But what do we have now? Only three major airlines in the USA, two in Canada and several serving the entire Europe. The industry has changed a lot since 9/11 and especially since the 2008 crisis. Many companies went bankrupt, others merged with larger players, and as a result there are now fewer airlines servicing an ever increasing number of both business and leisure travelers. Needless to say, with less intense competition on the market it's much simpler for the large players to set their own prices - you just have no other choice.
Raising oil prices
It's actually surprising that cheap air tickets are still possible to get in general assuming the tremendous increase in fuel prices over the last two decades. In the late 1990's a gallon of fuel was only $0.50 whereas now it costs at least five times more! And the fuel prices don't show any signs of decline in the future. The airlines have tried taking much of the increased fuel cost upon themselves, but this was actually one of the reasons for the large number of bankruptcies in the industry over the last several years. Eventually, part of the increased fuel cost is now transferred over the customers, so finding cheap air tickets has become more problematic.
Numerous fees
The authorities aren't helping the travelers as well, introducing a wide range of fees that sometimes can make up half of the price you pay for the ticket. All those 9/11, immigration, airport and security fees can make a regular domestic flight really pricey. And the rest of the world seems to catch up with the trend, introducing new fees and taxes that make it harder and harder to get cheap air tickets every year.
Profit-oriented companies
The airline industry has suffered a major blow after the 2008 economic crisis. On the one hand, the collapse of the credit and banking system has shattered the financial stability for many companies. And on the other hand, the declining economy resulted in lower economic activity, fewer travelers and more demand for cheap air tickets. In order to survive in such harsh conditions the companies that have managed to live through the hardest period were forced to reduce the number of flights, thus making sure that all their flights are full, and prefer business travellers, who are traditionally very flexible in terms of ticket price, to leisure travelers, who are rather price-sensitive. And since the overall picture hasn't changed much over the last several years, it's very likely that such a state of affairs will persist for a very long time. Read More......