This seems surprising to me. I was under the impression that airlines are pretty low profit margin industries, pulling in only around 3-4% in a decent year, and that of that the airline tickets themselves are the lowest margin items percentage wise, with other things like baggage fees being much more load bearing.
You are correct. As much as we like to bash airlines and their decisions, and liking low fares and quality service myself, it's objectively one of the worst businesses imaginable. Extremely high risk, low margin. Every year about a dozen airlines go bankrupt, get merged or bailed out. A small increase in the price of oil is a major risk for most of them.
Most of the more profitable markets have high competition not only by other airlines but also other forms of transportation. Very few airlines are swimming in cash and even those are only a couple bad years away from bankrupcy.
Airfare is the cheapest it has been in the entire history of commercial aviation except for immediately after 9/11 and the initial weeks of the global covid lockdown-- but both you and I know those periods don't count.
Most people are ok with terrible service because they save money.
Doesn't stop them from complaining, though.
And yes, "cheapest" includes taxes and all fees.
You can fly from New York to Paris non-stop for $150 if you are patient and flexible. (Please please please call me a liar.)
What's your patient/flexible technique? Let me know.
And you are not a liar - but your claim isn't true at all in Europe - see increased per-flight legislated fees and the loss of budget airlines. Price of flights between 2 destinations has increased by 25-40% in the last 5 years in most of Europe.
You can still get the madly cheap hop flights, but they are often pricing in income from our flights (or accepting even negative returns by pricing above the per-flight fees) because the planes need to be where you are going to fly a profitable flight later.
So the old status quo where genuinely cheap flights could be booked on a 7 day basis (e.g. cheap thursday-thursday flights) has been replaced by convoluted patterns to get the cheap flights (you usually need to leave on Monday, return on Saturday (if your source airport has lower demand than the destination) or vice versa. I suggest based on flights in the US becoming cheaper, that this is due to government intervention.
I get saving the environment and all that. But let me pay more taxes monthly, don't charge the airline £15 minimum making a bunch of flights unviable. Don't make booking a holiday or conference flight so unpleasant and annoying. I always have to tradeoff wasting a day or two with paying 50-150 euros extra.
It's not the worlds biggest problem, but making that decision is a regular additional dilemma I didn't want in my life. I wish for the days when you could get just normal timetabled flights at good costs if the month (e.g. February) was unpopular for travel. Now those months really aren't cheaper.
All I did was go to Expedia and put in JFK and CDG and $149 on Tuesday, July 15th on Norse Atlantic Airways popped up. Return flights the next week were $200-300. Round trip with a one-week stay were ~$500.
Round trips in September are $386-500 depending on the day and duration of the stay. The $386 fare was for a tuesday-to-tuesday week stay and I might just take it, I will be bumping up against use-or-lose limits for PTO by then. There are fewer crowds in September and the weather is really nice.
They are a low profit business, and that kind of liberty is stuff that pushes their profits even lower. They also always fail to differentiate from one another and are always competing on only price and how much fees they can keep hidden.
Personally, I do argue that it's worth it having tickets 10% more expensive and forcing the companies to always allocate all passengers, treat people humanely and etc. It's even worth it the 25% increase to make them let people carry luggage and avoid all the troubles that come with the optionality. But most governments seem to disagree.
Sure, you would subside people flying with luggage. It also reduces the time planes stay on the ground, stops the fighting between passengers for the always full luggage bins, clears the seats in case of emergency, and eliminates the largest hidden fee companies manage to put on their prices.
Anyway, the fact that you just assumed I personally fly with luggage is weird.
Depending on which party you're talking about (airport, airline, etc), a no-bag economy ticket is often below cost, which is made up in volume and extras.
This is correct, the single passenger 'economy' ticket is usually a loss leader.
You can make the argument that airlines are companies that sell in flight beverages and also happen to fly a passenger airplane. The actual profit comes from an unusual sources, like deals with credit card issues for a "rewards" program that gives you frequent flyer miles
