The cost of traveling by airplane has reached new heights over the past few years and many attribute this increase to the cost of jet fuel. While the cost of fuel is an important factor in the cost of airline tickets, it is not the only one.
Fuel Costs Fluctuate
The cost of fuel has fluctuated a lot during recent years. This seemingly endless up-and-down cycle has a lot to do with the overall cost of flying. The airlines must put much of their expenditures into the cost of fuel, which is of course passed on to the customers. However, the price of tickets during the times when fuel costs are lower remain the same, even going up in some cases.
There is Less Competition Than Before
A major factor in ticket prices is simply the principle of supply and demand. There are fewer airlines for customers to choose from than before due to several major mergers. The remaining airlines can determine what they want their prices to be because there are very few alternatives available to the public.
Airlines Must Pay Airport Fees and Other Taxes
An airline rents the space they have at each airport and different airports will charge different fees. The airlines pass this fee onto their customers. An airline also pays taxes on seats they sell and of course that is also passed onto the passengers. This tax is in addition to the sales tax passengers pay to the government on anything they purchase.
Airlines Try to Keep Their Costs Low
It might seem counterproductive for an airline to keep their seat prices high when they are trying to make a profit. However, it is another way to control the airline's capacity limits on how many passengers their aircraft can take per year. If an airline lowers their prices, it is possible the demand for flying will increase with more passengers opting to fly instead of driving or taking the train. This means an increased output cost for the airline resulting in lower profits.
In order to keep the cost of aircraft maintenance low, as well as the need to hire more pilots and ground staff down, an airline will keep their prices higher to discourage an abundance of travelers. The more aircraft they need to maintain or have in the air at any given time, the more cost to the airline. For more information about jet fuel, contact McClelland Aviation Company, Inc..