I don't buy that argument Sean. For one thing, your airline might not be around two months from now, or that flight segment may get dropped and you're stuck with no options. Why risk that just to maybe save 3 to 5 percent?

Second, some airlines (like Continental) typically start their prices high and then bring them down as the dates get closer and the seats aren't full. I just bought tickets to and from the Northwest for about a third less than what they were going for in March--for early June travel. Judging by the seat selection, the planes are only half full at this point. Yes, fuel keeps rising, but supply and demand still drive prices more than anything and a lot of people are saying "screw flying" this summer.

Posted By traveler on May 2, 2008, 11:13 AM

Hi, Tim,
Well, I'm glad you got a great deal. But FareCompare.com, which has been tracking fare data from the airlines broadly, has seen the opposite trend. Fares have jumped 20 percent.

As for seats becoming available, I'm skeptical of that, too. The airlines will simply swap in smaller planes. True, supply and demand applies to aviation, so if the prices get too out of line with what ordinary people are willing to pay, then airlines will lose business. But I think they can't lower their costs. United had a $1 billion loss on the books in the last three months. While that was partly a one-time write-down, all the airlines--save for Southwest--are losing a lot of money on fixed costs of jet fuel, etc. They can't actually lower their fares beyond a certain point. It's not an ordinary business--like hotels, rental cars, etc.

But--perhaps I'm wrong. I leave it up to readers to chime in with their views...
Thanks,
Sean
blog editor

Posted By Sean on May 2, 2008, 11:29 AM

Sean,

Yeah, I don't think either of us knows for sure how things are going to end up panning out this summer. No real precedent for this in the past. But I've bought two sets of tickets and had one set bought for me by a tourism bureau in the past week and a half and none of the three were higher than they would have been earlier this year because demand is down. Depends on the route I'm sure--none were super-popular ones, like summer flights to Europe for example.

But as the airlines' costs have risen, they've simply started charging for more things to make up for it. A family friend of mine called up Continental last week and was going to book SIX family members' flights over the phone. They wouldn't drop the $15 "book by phone" fee and she got so annoyed she took all six tickets to Southwest. The airline lost over $2,000 in business because of a stupid $15 charge to call up and buy something. Unreal. It's not just fuel costs that have led these guys to a loss...

Posted By Tim on May 2, 2008, 12:06 PM