www.CostaRicaTicas.com

I think the "powers that be" in the airline industry have finally decided that low fares simply do not work to their financial advantage.

They are switching to less capacity, more load factor at higher fares. NW is even testing charging extra for prime coach seats (bulkhead, emergency exits, etc.). Will this strategy work? That remains to be seen but I think for the foreseeable future unless there is some dramatic development fares are going to remain high.

I know there are constant references here to green season, demand, etc. will result in lower pricing soon. I do not think so and sincerely hope I am mistaken as Costa Rica can simply not afford the loss of tourist dollars.

_________________
Pura Vida
Only Irish coffee provides in a single glass all four
essential food groups:
alcohol, caffeine, sugar and fat.
Alex Levine

Only so many people will pay the high prices. Airlines cant solely rely on business travelers.

If they all follow the "high price" strategy, theyll go bankrupt one by one. Bye bye United!

Seriously, if an airline like Taca charged 600+ year round, theirs now way theyd survive. They service the poorest countries in the western hemisphere, how is someone going to put up 2 months salary just to fly?

and that differs from the low price strategy they have following exactly how??????

_________________
Pura Vida
Only Irish coffee provides in a single glass all four
essential food groups:
alcohol, caffeine, sugar and fat.
Alex Levine

But at least with low fares the customers are happy, and they have a clientelle.

Id much rather have a full plane and lose money then have no one on my plane and lose money if thats what it came to. At least youll have a chance to turn things around if you have people on your side.

If every airline put prices up 300$ to CR, I just wouldnt bother looking at airfare prices and would never travel VIA air.

I dont think radically changing prices from one spectrum to another is the solution to solving debt. People arent going to just "settle" for the new prices just because it happened.


Regardless, I would put good money on the issue that airfares will not increase by any real amount.

Reminiscent of the battle cry, "when cigarettes hit a dollar a pack, thats it" or "when gasoline is $1.50 a gallon I am going to start taking the bus"

Guess what neither of those things happen in a big enough way to impact the price and yes people were unhappy but Phillip Morris, Exxon-Mobile, etc. thought about that for one moment before they went back to counting their profits and reaping huge performance bonuses.



That is not the issue being discussed the question is are the fares going to be lowered. We all seem to agree that they basically are at there peak at this time.

_________________
Pura Vida
Only Irish coffee provides in a single glass all four
essential food groups:
alcohol, caffeine, sugar and fat.
Alex Levine

Jmac,
What you fail to grasp is supply and demand.

There are only so many seats on each flight. There are 1000s of people flying to Latin America every day.

It would take a protest of monumental proportions to effect the price.
Once the oil prices and bankruptcies are stabilized (possibly in 2007) things might soften up some but people are always going to travel.

With more babyboomers traveling and more young people reaching the economic levels that allow them to travel, there is no reason for the airlines to cut prices. Especially once people adjust to the higher prices (same as was noted above regarding cigarette and gasoline prices).

Also keep in mind Southwest, AirTran, Jet Blue, et al, don't fly to Central America, South America, Europe or Asia so the big airlines don't have to sweat the discounters all that much. Yes, TACA and Martinair get their share but I doubt either is a threat to American or Delta.

Airfares are NOT at an unreasonable price. When I first started flying in 1973 the prices were not that much less than they are now. If the price of an economy class seat was adjusted for inflation over the last 30 years a $500 fare to Costa Rica should probably be something like $2000.

If you can't afford to go then find something else to do with your money.
That's just the way it is.

What Im saying is if they keep upping prices to far, people wont be able to fly.

On all the flights I make to the caribbean, CR or wherever, the majority of the plane is filled with "locals".

If someone in CR's monthly wage is 500$, how are they going to afford a flight that costs 700$?

If you cut them out of the picture, planes will hardly sell every seat like they do now.

I agree with the comparison of airfares to cigarette and gas prices. Their demand is inelastic, meaning that a percentage increase in price will not decrease demand by the same percentage. The reason is that there are no viable substitutes for these products: can't smoke hay, can't drive on water, and can't take a bus to hawaii.

I will, however, disagree somewhat because unlike the cigarette and oil industries, the airline industry is much more individualistic. The airlines don't work together as well for the good of the whole. The airlines will stab each other in the back and steal each other's passengers the first chance they get. Often you'll see an airline step up and open up new routes into cities where the big boys charge higher fares to.

So if prices rise, they usually don't rise universally, as there will be an airline who will try to step in and grab some market share.

And you really can't compare flying now with flying in 1973, because the airlines' cost of flying is now much lower as technology has advanced, so it's like comparing apples and oranges ( ).

The best thing for us would be if the values would start flying to CR/Central America, that would throw a nice wrench into AA and Delta's plans to charge $600 a ticket.

Orange, mi amigo, I would expect something a little more logical from you.

Trust me, the price of airplanes, parts, advertising, wages, health care, fuel, etc. is exponentially higher now than in 1973.

Here are some examples:
1973 Economy/Prices
Consumer price index 44.4%
Cost of a new home:.......... $35,500.00
Median household income:.. $10,512.00
Minimum wage (1975).................$2.10
Cost of a 1st class stamp.............$0.08
Cost of a gallon of regular gas.....$0.39
Cost of a dozen eggs...................$0.78
Cost of a gallon of milk.................$1.31
http://www.1970sflashback.com/1973/Economy.asp

1999 Economy/Prices
Consumer price index 163 (1998)
Cost of a new home:.......... $195,800.00
Median household income:.....$39,973.00
Minimum wage (2000)...................$5.15
Cost of a 1st class stamp...............$0.33
Cost of a gallon of regular gas.......$1.17
Cost of a dozen eggs.....................$1.08
Cost of a gallon of milk...................$3.32
http://www.1990sflashback.com/1999/Economy.asp

An excellent slide show on Consumer Price Index from 1980 to 2005
http://www.people.carleton.edu/~rdobrow ... on/CPI.ppt

Here is a great article comparing the overall inflation situation of now to the '70. Sadly it's not that much different (namely BAD).
http://inflationdata.com/inflation/Arti ... _1970s.asp

In regards to Uncle Wit's comments....

FWIW, I remember as a K*D growing up (early 70's), I remember thinking that it seemed like the only people who flew on airplanes were the upper class, rich people. I know this may sound stupid, but this was my mindset as a youth.

I did not grow up in a rich family, but I remember (vividly) thinking like this, and hoping that, some day, I'd have enough money to fly on an airplane.
Sorry, but I just thought I'd throw that in here. Was I just a stupid K*D, or did anyone else think like this as a youngster ?
MG

_________________
You ALWAYS have an option ....... "NEXT" !!!

MG,
Yes, that was exactly how I thought of air travel when growing up. I compared it to taking a cruise or visiting Europe. Things I thought I might never be able to do.

My first airline experience was in 1973.

I flew from Tallahassee, FL to Omaha, Nebraska (via Atlanta) on Eastern Airlines (remember them?) on a "youth" fare (under 21) of $153.

I'm flying next month from Atlanta to Omaha on Delta for $203.

In 1973 I was making about $2.20 an hour. Now I make, well let's just say I make a helluva lot more than that. I still occupy the same seat but I have a lot more buying power.

(Truth be known I worked a lot harder back then than I do now, but don't tell my supervisor).

Ive personally always considered flying acceptable to the lower class. I definitly grew up in the lower class for the most part, and my family still managed to travel as much as they liked.

Mind you, flying to Europe is insanely cheap from Eastern Canada. Like 300$CDN roundtrip

Eastern Airlines ??? Now you're REALLY showing your age!

My first flight was for 'Spring Break' in 1980. I flew Continental Airlines from Hartford, CT (Bradley Airport) thru Newark, NJ, into Orlando, FL. That flight was $196 R/T......
26 years ago!!!

Now, fast-forward to present day....

My sister is flying down next month for Easter, on Southwest Airlines. Her R/T ticket from Hartford, CT to Orlando, FL cost $ 188.

My wingman, for my trip next week, is flying down from Hartford to Orlando in 6 days (this coming Tuesday -April 4). His R/T ticket cost $228.

Basically, the airlines are going to do whatever the airlines want to do. As stated here, airfares (relatively speaking) have not increased that much over the past 30 years. As with any industry, there is volatility, along with inflation and/or market trends. Prices rise, and prices drop. But, overall, in today's economy, we are very lucky to be in a position where most of us have the financial ability to jump on a plane and travel internationally.

Ok....I'm done rambling......
(Eastern Airlines....That was a good one) !!!!

Mucho Gusto

_________________
You ALWAYS have an option ....... "NEXT" !!!

Does she need someone to pick her up from the airport? Does sexy bitch-iness run in the family?

RHM
sick puppy

Mucho Gusto wrote:

_________________
Pura Vida
Only Irish coffee provides in a single glass all four
essential food groups:
alcohol, caffeine, sugar and fat.
Alex Levine