The Associated Press this morning has an article about Americans opting for cheaper Thanksgiving trips this year. Since I can relate to the incredibly high prices the airlines are charging this year for holiday travel, I thought it was worth noting. While I'm not entirely convinced that the AP's inductive reasoning works, I certainly hope it's right.
First, here's a bit from the AP story:
The Miles family is changing it up this year in the annual American race to make it to the table for Thanksgiving dinner. Instead of booking plane tickets, they opted to take the 1,100-mile trip by train.
Airline tickets seemed too pricey, so they paid $800 for the five of them to travel roundtrip by train from their Syracuse, N.Y., home to Omaha, Neb. to see family. Airfare would have totaled more than $2,500, the family said.
"Economic considerations topped the list for us," Maureen Miles, 44, a doctor's office receptionist, said while sitting with her husband and three kids at a crowded Union Station in Chicago before their train departed Tuesday afternoon.
"If the price was right, we would have considered flying," she said.
And frankly, with the prices the airlines charge for holiday travel, they deserve to be shunned. My fiancé and I came very, very close to not traveling home for Thanksgiving this year, when we realized that the two of us would need to spend nearly four figures to get there. Unfortunately, we would have had to endure a 16-hour drive to get there, which would make the trip impossible without taking a day off work. A train wouldn't have been any better.
Luckily, our families decided to chip in a little and make the plane tickets a little less painful. Then, this week, we also booked flights for next month's holidays. They were even more expensive, but unlike Thanksgiving, returning home for the holidays is non-negotiable. My round trip ticket will likely eclipse the entire sum of what I will spend on gifts for my entire family combined. In other words, I will be giving more to U.S. Airways this Christmas than my entire family.
I just don't understand how many Americans can afford air travel during the holidays at these prices -- particularly in an economic climate like this. According to the AP story, Thanksgiving travel plummeted 25% last year and doesn't appear to be rebounding much this year. I would take that to imply that air travel has declined even more.
Meanwhile, airlines are increasing fees across the board. In fact, they're even increasing fees that apply specifically to holiday travel, to ensure that consumers don't accidentally get any good deals.
There's probably no escaping high airline holiday ticket prices. But believe me: if it wasn't so far to drive, I wouldn't hesitate. For the December/January holidays, we nearly considered doing the 16-hour drive. Renting a car for two weeks, 2000 miles worth of gas and a hotel night stay on either side of the trip altogether would have been slightly cheaper than our two roundtrip tickets. And at the very least, I would have felt some satisfaction for sticking it to the airlines. Unfortunately, we ultimately caved and chose the two hour flight instead of the 16-hour drive. At least airline executives this week will have reason to give thanks.
The airlines have reduced the number of domestic flights significantly, having 30-40% fewer seats this year than in 2008 to accommodate for the far lower demand for air travel during the rest of the year. Since they run the same schedule around the holidays as the rest of the year, where demand hasn't dropped as much, they can afford to price 30-40% of holiday travelers out of the market and still fill the available seats. That being said, high volume markets, like LAX-JFK or LAX-IAD are still quite cheap, because there is a lot of competition and high volume.
Most people can't not travel now so they have no choice but to pay.
From 1990 to 2003 I flew home from LAX to Buffalo every year. The amazing thing was the price barely changed during that whole period (in real dollars the price fell). This year it looks like it'd cost about 60% more than in those years, but I'd still do it.
Brian
Booking tickets early always helps, especially with the new charges being piled on over and over again. I booked mine in September, and while that might not be realistic for many people, it allowed me to travel cross country for under $500 round trip.
Given the huge multi-year losses that airlines have incurred — plus the severe pay cuts that their workers have suffered — it's hard to argue that today's airfares aren't closer to where they should be.
Since higher fares depress demand, the only solution has been to cut supply. The current environment is probably indicative of what we can expect for the foreseeable future.