Why airfares are not going down?

[ezzra]

A barrel of crude oil on the open market is at the lowest in memory, yet, airfares here in Thailand at least

are not budging and not going down.. why?

TG is charging the same fares they use to charge when the oil was at $ 125 a barrel...

is the a cartel of price fixing going on that we will hear about

it in years to come when they will be panelized for many millions of dollars?

They can't claim that they have already fixed the oil buying price long a go as this is not the case anymore....

[Mitkof Island]

Greed ? Greed ! and more Greed! Why is gas in Thailand not at 14 baht but as high as 26 ? No reason pure greed.

[4evermaat]

Yes. The 1% are at it again to restrict the 99% movements.

[Ricardo]

IME the fares back to the UK on direct-flights which I've booked for 2016 are cheaper, than I paid for this year, for indirect flights.

And the domestic-flights I've booked are certainly no-more-expensive. For example I've got CNX-UTP-CNX next November on Air Asia, for less than I paid this November for CNX-DMG-CNX, and both are less-than B1,000 return, which is cheaper than the bus & competitive with 3rd-class by rail !

I'd also point out that fuel is generally only 30%-40% of the cost of the flight, flight/cabin-crew & maintenance & catering & overflying-charges & airport-costs & financing-costs remain unchanged.

[steve187]

i think a return airfare from Thailand to heathrow at 25,000 baht ish is a fare price, a little higher than the same journey in return, but all in all not a bad price.

[chrisinth]

i think a return airfare from Thailand to heathrow at 25,000 baht ish is a fare price, a little higher than the same journey in return, but all in all not a bad price.

That is about what I was paying for a return flight in the early 90's for a one year open ticket. About 500 GBP. Considering a 42 baht to the pound exchange rate at the time and inflation, if you can get a direct return flight for that today, then it is a great price.

[NeverSure]

Airlines don't set prices based on fuel. Like any other business they set them based on supply and demand. Some years they lose money because demand isn't sufficient to meet costs.

When they have planes half empty you may see fare wars. When they are running a suitable percentage of full seats you won't see the bargains.

They are businesses, not charities and without them we wouldn't be able to fly.

[KhunBENQ]

i think a return airfare from Thailand to heathrow at 25,000 baht ish is a fare price, a little higher than the same journey in return, but all in all not a bad price.

Agree: I can't remember that return flights from Thailand to Europe being that low in the past years.

I am not up-to-date on prices the other direction.

Thai Airways and others:

all airlines do "hetching" (?) on oil prices to save from extreme fluctuations in fuel prices.

Thai Airways seems to have been one of the least smart.

They have assured quite high prices over some period.

What fares are you comparing for flights to Thailand?

Hopefully not prices from May/June, September with prices in December?

I think I don't have to explain that.

[tartempion]

They may make some profit at last?

[thrilled]

Travel is up.So if they can fill the seats why would they lower the cost?Just to help the consumer out,I don't think so.If you don't

Like the prices then don't fly.If many of us did that then they would think about lowering the price to get the planes full again.

So now with fuel prices down the airlines are making bigger profits.

[beano2274]

my wife saw some prices of around 13000baht return with Norwegian although it is a budget airline is still a great price

[Lobber]

because the airlines are greedy <deleted>#$RS

[mihalis]

Depends, bought ticks, with singapore air, 999........... High season prices will always be high..

[F4UCorsair]

It's called commercial reality. Airlines will charge what the market is prepared to pay, and it's not dependent on fuel prices. If the demand for seats drops, so does the price. Most, if not all, airlines run a 'flexi fare' program, which sets fares on demand alone, with a lower limit so they don't go out of business.

Airfares are the lowest they've ever been....relatively. 50 years ago it cost 2 years income for an average wage earner to fly Sydney to London (return) in a Constellation, and an unwanted bonus was that you were deaf for a few days due to the engine noise.

Now an average wage earner can do the same for a month's income, in half the time, and arrive with functioning hearing!!

Edited December 21, 2015 by F4UCorsair

[rodroy]

Consider this! The oil which is being sold as gasoline today was no doubt purchased 6-10 months ago at either a fixed contract price or on the spot market!

The oil was purchased at the wellhead and the required transport by tanker to say Singapore or Thai refineries!

You are purchasing 'old' inventory in most sense of the word! You certainly dont by gasoline based on spot prices!

Also ask the Gov't if they have dropped the excise taxes on each litre of gas which makes up 55-60 % of the cost at minimum!

All is not as it seems superficially!

Edited December 21, 2015 by rodroy

[NoshowJones]

i think a return airfare from Thailand to heathrow at 25,000 baht ish is a fare price, a little higher than the same journey in return, but all in all not a bad price.

I paid about 41.000 Bt return to Scotland two years ago, that BA flight now for about the same time of the year is exactly 33.000 Baht.

So, in that case the price has come down.

[shaggy851]

Are they not high because of high demand and holiday high season. They are typically extraordinarily high at this time of year, last year i decided to stay from nov through jan in bkk because i knew the prices go nuts. This year booking late after i knew my work schedule, had to be quite strategic and go via different countries and dates also airlines via indonesia to get anything under 1000 aus return. If id let anyone else do the bookings it woukd have been 1500-2000 straight up. Thats coming from australia in a peak travel period.

[laislica]

We bought two return tickets Spain BKK, Bkk Spain. more than 6 months before the first flight.

Iberia for the leg in Spain and Emirates Madrid - Dubai - BKK.

We paid 1,600Euros.

Then my wife wanted her son to return to Spain with us for a two week holiday starting at the end of April, so we could fly together.

His flight cost over 1,100Euros.

The extra expense is because we did not pay at the point of origin.

What's that all about?

[phitsanulokjohn]

Pure greed.When oil goes up it's almost immediately noticable at the pumps,but when the price goes south,how long do we wait to see a decrease?

[connda]

Because it's a rigged system. You didn't know that?

[connda]

It's called commercial reality. Airlines will charge what the market is prepared to pay, and it's not dependent on fuel prices. If the demand for seats drops, so does the price. Most, if not all, airlines run a 'flexi fare' program, which sets fares on demand alone, with a lower limit so they don't go out of business.

Airfares are the lowest they've ever been....relatively. 50 years ago it cost 2 years income for an average wage earner to fly Sydney to London (return) in a Constellation, and an unwanted bonus was that you were deaf for a few days due to the engine noise.

Now an average wage earner can do the same for a month's income, in half the time, and arrive with functioning hearing!!

However, when the fuel price increases, they'd more then happy to levy a surcharge on fuel. Lol

[samsensam]

not sure if thai is a good example as they never seem to have a competitive pricing strategy.

my return flight was £420, i paid over £700 last year so i'd say that was quite a reduction.

i also got a return flight bkk/hk for £120. a bargain i reckon.

[ThaiWai]

Not going down??
Roundtrip flight to NY from Phuket through China is under $800 US. I might just go for the peanuts and comeback at these prices!

[TheCruncher]

i think a return airfare from Thailand to heathrow at 25,000 baht ish is a fare price, a little higher than the same journey in return, but all in all not a bad price.

I paid about 41.000 Bt return to Scotland two years ago, that BA flight now for about the same time of the year is exactly 33.000 Baht.

So, in that case the price has come down.

Correect, 2 years ago China airlines to Amsterdam was close to 40.000 Baht, while now it is below 30K.

[Gonsalviz]

Greed ? Greed ! and more Greed! Why is gas in Thailand not at 14 baht but as high as 26 ? No reason pure greed.

It is due to taxes, Same as Europe.

Americans are bad enough. The rest charge more.

[Suradit69]

i think a return airfare from Thailand to heathrow at 25,000 baht ish is a fare price, a little higher than the same journey in return, but all in all not a bad price.

"... is a fare price,..."

Pun intended ?

[eastendanto]

similar to the energy companies when the price of oil goes up so does the price of electricity and very quickly....when the price of oil goes down it takes some time before that filters through to electricity costs for Joe public.....There was a time when it was normal practice for airlines to forward buy their fuel so that they knew exactly what their costs would be for a set period of time, however I'm not sure whether this is still the case. The budget airlines by their very nature pay on the day at the current price as their financial model is based on least cost (however given the current oil price it maybe a good time for airlines to forward buy their fuel for 6-12 months at current market price). For sure whatever goes up, certainly goes up quicker then it comes down where energy and fuel prices are concerned. As some of the other posters have remarked it's also about supply and demand, basically whatever price the market will take at a given time for a seat on a particular route.

[F4UCorsair]

It's called commercial reality. Airlines will charge what the market is prepared to pay, and it's not dependent on fuel prices. If the demand for seats drops, so does the price. Most, if not all, airlines run a 'flexi fare' program, which sets fares on demand alone, with a lower limit so they don't go out of business.

Airfares are the lowest they've ever been....relatively. 50 years ago it cost 2 years income for an average wage earner to fly Sydney to London (return) in a Constellation, and an unwanted bonus was that you were deaf for a few days due to the engine noise.

Now an average wage earner can do the same for a month's income, in half the time, and arrive with functioning hearing!!

However, when the fuel price increases, they'd more then happy to levy a surcharge on fuel. Lol

Read para 1 again. It's called commercial reality. An airline can charge whatever it chooses, justify price rises however it chooses, but if people stop flying because of their policies, they will then adjust those policies to attract travelers. They frequently justify not taking the fuel levy off when fuel prices drop by saying that they intended raising prices, so they'll just leave the levy on.

Airlines setting fares is a little like politicians setting their own salaries.....if you don't like it, what are you going to do? Slit your wrists?

Edited December 21, 2015 by F4UCorsair

[jacko45k]

It is a fallacy to believe anything should cost something like the sum total of all the involved components.

That may well provide a bottom line, no more.

If something is selling well, hike the price, if in oversupply, prices will fall.

Anyhow, there are some cheap coach flights around, premium seems to be going up,

[chicowoodduck]

When folks stop buying tickets, the prices will drop like a rock.....????