Question.. Who reported record profits for the second quarter of 2014, but continues to whine in public that they just don’t make profits and so badly need to keep nickle and diming us to “cover the costs of fuel” and to stay afloat? It is not a trick question, but I will give you the answer: American Airlines, United Airlines, and Delta Air Lines. JetBlue, Alaska Airlines, and Southwest Airlines also posted impressive earnings for the second quarter.
These airlines have gone on to spout about what they plan to do with the impressive profits, but when asked point blank about whether they would use their new cash cushion to reduce customer fares and fees, they suddenly went silent – literally – hiding behind regulatory laws as their reason for not speaking on that topic. But we all know what that means then, no?
This is an industry that cries to regulators & congress about raising fees and costs imposed on them, but has no compunction about turning right around and placing it on our shoulders. Hypocrisy at it’s finest.
According to the story, “Consumers paid an average of $88 more for a domestic round-trip in the first half of 2014 than they did in the first half of 2010, according to data from Airlines Reporting Corporation. Passengers also paid an average of $9 more in ancillary costs — baggage fees, on-board food and beverages, frequent flyer deals, and other costs — for each of their trips last year than they did in 2007, according to data from IdeaWorks Co.”
A pair of great quotes from the Washingtonpost.com sum it up, “Rather, airline industry analysts predicted, industry trends point toward sustained and even higher prices for consumers amid the reversal of the industry’s fortunes.” and that “Last week’s strong earnings reports represent “evidence that people are willing to pay these higher prices to generate those kind of profits,” said Bob Mann, an airline industry analyst and former airline executive. “Why would the carriers reduce price?” I disagree heavily with the claim that people are “willing” to pay, I would say we are “forced” to pay as the only choice is don’t fly and that is just not a reasonable option if you want to live life. But the ironic thing there is that many families are opting not to travel due to high costs. I know I have – I have literally not taken trips due solely to the costs of the flights. So what happens then? They squeeze more out of those that do to make up for those that they pushed out of the market. Essentially, they are killing off & shrinking their own base.Like what you just read? Subscribe!