Excuses Of Airlines For Disproportionate Increase In Fare Of Cheap Air Tickets

It is not possible to find cheap air tickets all the time

. In fact, the lowest air fare on flights cannot be found most of the time, making you search more extensively as well as intensively. It is only when the demand is very low that the prices of the air tickets can be expected to come down. The airlines look for slightest hints to raise the prices of the tickets which are sometimes so disproportionate that no amount of reasoning would be able to justify the same. So, what the most common conditions which make the airlines to give excuses for price rise of the cheap air tickets?

1.Inflation: If there is an inflationary tendency in the economy, the airlines would cite the increase in the cost of inputs and increase the prices. These inputs could be direct or indirect. For example, if the airline has increased the salaries of its staff due to the inflation, the same would make the cost of air tickets expensive.

2.Currency deterioration: If the airlines is importing aviation fuel and/ or is using the services of the expat pilots, two major cost components of tickets, whom they have to pay in foreign currency and there is a deterioration of the exchange rate of the domestic currency, it will make the cost of the tickets to go up. So, even if there is a marginal deterioration of the rate, the airlines would have the excuse to increase prices of lowest air fare disproportionately even though it had done the hedging of the currency risk.

3.Fuel price rise: Fuel input is a major contributor to the price rise of once lowest air fare. Any upward revision of the fuel cost increases the prices of tickets. Again, the rise is disproportionate.

4.Reduced competition: When the airlines are not facing tough competition from the other airlines or there is a reduction in the inventory available due to exit of airlines or termination of flights on some sectors, the existing airlines have a tendency to hike the prices.

The main reasons for the rise of the tickets are mentioned above. The airlines also defend the disproportionate increases due to the element of uncertainty of tickets price hike. But, even after these reasons have ceased to exist, the airlines continue to charge the same high prices for the lowest air fare tickets.

by: Shawn Parker

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