Flying on
commercial airline will never be a luxury. Common sense and logic should tell
us that the cost of flying on commercial airlines will continue to rise. This
assertion is due mainly to two critical issues: (1) high price of fuel oil and
(2) airport security. The high cost of fuel has become a major expense for the
airline industry. Fuel remains our largest and most volatile costs, says John
Heimlich, chief economists for Airline for America. A Deutsche Bank analysis
estimated that every penny increase in jet fuel prices on an annualized basis
equals additional fuel expense of $170 million for the U.S. airlines industry.
In turn, these costs are passed on to consumers.
Another major area of concern is
airport security. Since the 9/11 terrorist attacks, security at airports around
the world has become a nightmare for commercial airline passengers. Besides the
long lines, waits at airports, removal of articles of clothing, loss of
personal privacy, pat downs, airports have been forced to purchase advanced
imaging technology and other safety equipment and hire security personnel.
These costs have also been passed down to passengers in terms of ticket price
increase.
I am not sure about the assertion
that one can now fly on a route for cheaper or equivalent to the cost of
driving that route. At one point, it was possible for passengers to travel
cheap on start-up airlines. With the availability of capital and lax rules and
regulations, many start-up airlines suddenly became available to passengers.
These airlines cut into the price of major airlines, but most of them soon went
out of business because they did not have sound and well-though out business
plans. Finally, raising prices on commercial airlines will change this industry
forever. More and more passengers will begin searching for new means of travel.
Cubbin, K. (2009). Airline economics: Is there a formula for success? Cubbin Consulting
Cubbin, K. (2009). Airline economics: Is there a formula for success? Cubbin Consulting