How is this going to affect ticket prices?

[yoopermom]

Sorry if this has already been discussed, but I noticed that the "talking heads" seem to think that ticket prices in the future will probably go *up* since the price of increased security will trickle down to the consumer and because fewer flights will be scheduled on a daily basis, supposedly creating higher demand. DH wonders, though, if prices will go *down* because some people will be afraid to fly and because airlines will want to encourage people to have confidence and continue to fly. Just curious! Any educated guesses?
Terri the Yoopermom

 

[Beverly Lynn]

there will still be sales that will be nice and it might raise the prices and then again it may not. before I jump the gun and start yelling about how much it costs I will look at it this way if it increases the safety of flying then I will gladly spend an extra 20 bucks to fly somewhere.

 

[yoopermom]

And I definately did not mean to imply that an extra charge would be unseemly. I just worry about how this is going to affect the stability of the airline industry in general. One report went into great detail about how the number of flights would have to be cut down drastically (hopefully my 5:30 a.m. one!). Thanks for keeping us informed throughout this crisis, I for one, really appreciate it.
Terri the Yoopermom

 

[CarolA]

I don't think anyone knows yet. The airlines will not want to have large price increases if they can avoid it. Their finanical statements for the last few quarters have not looked good and if they raise rates a lot it will cut down on travel even more. While my company has not cut back on business travel I have friends who work for places that have. However, I agree that a small increase for safety would be good. Maybe they could set up some type of fare supplement so that we would know that is where it is going!

I agree with Beverly that there will be some sales arising out of this. I just checked SW and I can fly round trip to Orlando for $102. This is about $80 cheaper than what I had last week so... who knows?

 

[travelcoupons]

In the short term, we will see some incredible sales. Long term, increased operating costs will eventually drive ticket prices up...some airlines will go bankrupt and shut down (such as Midway already has and like Eastern and Pan Am did as a result of the downturn in travel during the Gulf War in 1990) and others will merge.

Many in the industry are braced for a rerun of market conditions seen after the 1991 Gulf War when many people shunned air travel, and tough security is expected to worsen congestion in terminals, probably forcing the most over-stretched airports to cut peak-hour flights. Joseph Schwieterman, director of the Chadick Institute at DePaul University in Chicago, which follows airline marketing, estimated that it could take another week for travel to get back to normal. At that point, airlines will be scrambling to attract customers back, he said.

"This will exert strong downward pressure on pricing," he said. "This makes additional discounting almost inevitable as the industry tries to get on its feet."