tag:blogger.com,1999:blog-746324505322049940.post7293182825521927650..comments2024-03-22T07:58:59.646-06:00Comments on Pewaukee Economics & Finance : Lower Airfare, or Not?Mrs. Straubhttp://www.blogger.com/profile/14927083996757427841noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-746324505322049940.post-22898672811767831022017-10-25T10:11:03.280-06:002017-10-25T10:11:03.280-06:00One of the big reasons that airlines are keeping t...One of the big reasons that airlines are keeping this saved money is to replace their current fleets. Airlines are flying planes that are at least 30 years old, some even older. Not to mention these aging planes are out of date and parts are hard to find. Tying into the fuel costs, these fuel savings are thanks to aircraft like the Boeing 787 and the Airbus A350. These are decently sized planes with huge ranges, and airlines are using these to replace the much larger jumbo jets like the 747 and A380. The insane fuel costs for the 4 engine jets just aren't worth it anymore, and the once Queen of the Sky is starting to be phased out and retired. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-746324505322049940.post-47425311328546197132017-10-25T10:00:14.275-06:002017-10-25T10:00:14.275-06:00It isn't a big surprise that airlines refuse t...It isn't a big surprise that airlines refuse to lower their prices. They under no requirements business-wise to change anything. This actually ties into what we just touched on in class which was oligopoly. The airline business made more than 70% of its profits from 5 major companies last year (American, Delta, Southwest, United, and US Airlines). Because of this, these 5 companies basically can set any price they like and add any regulations or fees they would like. They are the reason you have to pay for each individual bag that goes on a flight now. It doesn't perturb this huge companies as long as they are increasing their profit. It is a bit frustrating and some people even tried to boycott certain airlines like United after all of their incidents early in the year, but United also has the most routes of all airlines in the US, so it is almost impossible to 'boycott' it. Until these businesses step across a line, the government and people will have to put up with the prices they set.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-746324505322049940.post-17145806235141597962017-10-25T09:14:14.161-06:002017-10-25T09:14:14.161-06:00This post is accurate in the sense that plane tick...This post is accurate in the sense that plane tickets are rather inelastic. If people need to travel for business or leisure, they will buy a ticket, especially for the obvious reason if it’s overseas. In addition, many businesses will actually pay for their employees to fly, which takes an added expense off of an individual's’ income. However, it would be somewhat helpful if ticket prices were lowered because it will decrease the overall expenses for a business. I do think it might be a good idea to not actually decrease all prices because then planes will become more cramped, lines will be longer, and quality of the actual planes may diminish. The variable costs of those tickets will also change based on the quantity of tickets sold because people will be more willing to buy tickets, thus increasing the total revenue of the airline company. All in all, I do agree with your conclusion, stating that I highly doubt that airlines will decrease their tickets because people will continue to buy tickets regardless. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-746324505322049940.post-65574195016837824002017-10-25T09:04:21.691-06:002017-10-25T09:04:21.691-06:00Very interesting story but keeping the prices up i...Very interesting story but keeping the prices up is not a huge problem for airlines because tickets are an inelastic good. People will keep flying and paying for tickets even if prices raise because it is the most necessary way to travel most of the time. I had no idea Airline companies were saving this much money from gas and lower ticket prices are ideal, but they would not have to worry about prices unless there was a dramatic decrease in demand. Anonymousnoreply@blogger.com