How long do you think Airlines

[scarletlancer]

Can go on raising prices of flights to popular destinations like Orlando at the incredible rate that they have been in recent years before they start actively pricing their potential customers out of the market? I appreciate that we live in a free market economy and things are effectively worth whatever the consumer is willing to pay for them, but there has to be a line in the sand somewhere. It seems to me that we are constantly paying more for an often declining service. The example of the ageing entertainment system in the economy cabin of the Virgin planes to Orlando springs to mind. How long can a company tell its customers that it can't afford to invest in the improvement of such a facility while at the same time it raises its economy prices to something verging on premium levels. Our flights in August last year cost the three of us (me, my wife and 5 year old daughter) just under £2000, we have just priced a trip at the same time of year in 2011 and (admittedly with the addition of an as yet unborn infant) and it is now a few pounds short of £3000.

 

[UKDEB]

I think we've just got so used to rock bottom prices that it's difficult to stomach what, in all honesty, is more realistic. Airlines have been struggling for years and something has to give. Firstly it was the little extras, then service, but price hikes were inevitable in the end. When you bear in mind that a huge hunk of the increases is taxes and fees (which, of course, the airlines don't benefit from), it's pretty incredible that we can still fly 8,000 miles for less than £500. I don't like it any more than anyone else, but no-one benefits when an airline goes out of business. The industry's in crisis.

 

[OrlandoMagic]

I know, it's disgusting how much they are charging now.

In May 2008 we paid £280 each for economy flights with Thomas Cook, in Sep 2009 we paid £390 each for economy flights with BA.

I dread to think what the prices will be for when we go next Sep! We will even have to consider indirect!

 

[UKDEB]

In May 2008 we paid £280 each for economy flights with Thomas Cook, in Sep 2009 we paid £390 each for economy flights with BA.

Given that taxes, surcharges and fees probably amounted to more than half the cost, it never fails to amaze me that they can afford to get anyone there for so little. Looking at the stripped down price, it can cost about the same to get from Gloucester to London and back on the train at certain times of the day.

 

[scarletlancer]

I think we've just got so used to rock bottom prices that it's difficult to stomach what, in all honesty, is more realistic. Airlines have been struggling for years and something has to give. Firstly it was the little extras, then service, but price hikes were inevitable in the end. When you bear in mind that a huge hunk of the increases is taxes and fees (which, of course, the airlines don't benefit from), it's pretty incredible that we can still fly 8,000 miles for less than £500. I don't like it any more than anyone else, but no-one benefits when an airline goes out of business. The industry's in crisis.

I do take your point but if tax and fee increases have forced the cost of a flight to Florida up by a third in two years (which I doubt) why are indirect flights, which fly further and thus use more fuel and still incur similar taxes so much less expensive? I would imagine it is because they are less popular which therefore makes the passengers on them less exploitable. The industry may well be in crisis but a £68.4m 2009 pre tax profit (up from £34.8m the previous year) for Virgin Atlantic, the airline in question, doesn't exactly paint a picture of an airline that is struggling.

 

[wayneg]

Those were last years figures, Virgin are having a rough time(as are all airlines) £132 million loss from latest reports.

http://www.dailymail.co.uk/money/ar...tic-suffers-132million-loss-demand-falls.html

 

[scarletlancer]

Those were last years figures, Virgin are having a rough time(as are all airlines) £132 million loss from latest reports.

http://www.dailymail.co.uk/money/ar...tic-suffers-132million-loss-demand-falls.html

OK, fair enough, I hadn't seen that. However i do still return to my original point, there has to be a level at which sharply increasing price without offering anything visible to the customer to soften this blow can only take you so far towards recovery and doesn't seem to be much of a long term strategy. There must be a point at which the rise in price equals a loss of custom. What really interests me is where that point is. It reminds me a little bit of the music industry's response to the decline in CD sales, if a business is that much in crisis sooner or later somebody will need to develop some new thinking to revive or even better, redefine it. Air New Zealand's economy sky couch for instance, is the kind of innovative response that offers some tangible improvement rather than just lifting prices for the same tired product.

 

[wayneg]

There must be a point at which the rise in price equals a loss of custom.

Yes there has to be, Virgin have gone beyond that point for me. They used to be market leader, I remember my 1st flight with them, a proper glass, metal cutlery, great food, outstanding service and very modern planes. What happened? I now rate them near the bottom. Not been with them for 2 years now, no way am I paying £1,000pp they want for next August.
The prices must be losing custom for them all, I think we have decided no more trips until next August(recently going upto 4 times a year) partly down to prices and partly DS starting A levels. If I saw flights now for Xmas at £250 I would book, or May half term I would book so yes its the price, they are losing custom.
I have no idea how to run an airline but virgin were selling cheap and filling planes (more flights than they have now) and making $68m profit, charging silly money filling in school hols(but less planes) going half empty out of season making a $132m loss, have they made some wrong choices?

 

[2Tiggies]

Y I remember my 1st flight with them, a proper glass, metal cutlery, great food, outstanding service and very modern planes. What happened?

Ah, the fond memories. My first VA flight was in 2002. It was, at the time, the best airline I had flown with and they were the cheapest too. Fast forward 8 years and In 2008 I paid under £400 return to Orlando, direct from Manchester. This year, fair enough it's from Glasgow so there are additional supplements included in the price, but we are looking at a little less than double. And for the record, I booked before the prices went insane for this trip so effectively this was still a bit of a bargain .... which is somewhat scary!

 

[scarletlancer]

Yes there has to be, Virgin have gone beyond that point for me. They used to be market leader, I remember my 1st flight with them, a proper glass, metal cutlery, great food, outstanding service and very modern planes. What happened? I now rate them near the bottom. Not been with them for 2 years now, no way am I paying £1,000pp they want for next August.
The prices must be losing custom for them all, I think we have decided no more trips until next August(recently going upto 4 times a year) partly down to prices and partly DS starting A levels. If I saw flights now for Xmas at £250 I would book, or May half term I would book so yes its the price, they are losing custom.
I have no idea how to run an airline but virgin were selling cheap and filling planes (more flights than they have now) and making $68m profit, charging silly money filling in school hols(but less planes) going half empty out of season making a $132m loss, have they made some wrong choices?

I think it's the same old story Wayne, a company reaches the top by being lean and innovative but once they get there they think that they can squeeze that little bit more out of the people who have put them there. Unfortunately for us both my wife and I teach in a University so we are not even in a position to be able to take our daughter out of school to pick up bargains. However, we have decided that if we do go next year we are going to fly with BA (the idea of flying indirect with a 7 year old a ten month old baby is just too much hassle to make the most of the saving) because they seem to offer better accommodation for babies (as I said previously that little bit of innovation in bouncer style baby seats has won me over). Indeed, we are likely to book WT out and WT+ home for pretty much the same cost as Virgin Economy.