Air Finance Journal Copying and distributing are prohibited without permission of the publisher


01 August 2005

Everyone knows the flying public never had it so good. Or do they? Adam Pilarski of Avitas looks at the real price that the airline passengers are paying.

Read more: airline Airlines TSA Aviation

US airlines have lost more than $30 billion since 2001. There are many factors for such colossal losses. The one universally blamed is the changed revenue environment.

While costs are generally coming down, except for out-of-control fuel prices, ticket prices have remained stubbornly low. Having dropped precipitously just before September 11, 2001 as a temporary cyclical response to the economic recession, yields have continued to fall.

Various explanations are offered for this price behaviour. They range from the structural change type (business travellers will never again splurge on expensive tickets) to the dominance of computer technology in buying tickets, from too much competition to the fear factor (many people are afraid to travel), from the spread of low-cost carriers to video conferencing making travel obsolete.

No matter the explanation, lower yields are universally accepted as the main culprit for the disastrous situation among US airlines. The percentage of GDP devoted...

Latest Deals Database Updates

Xiamen / 04-14 / Airc Sec Loan / 2x737 23/04/2014
Latest Deal Status Finance mandated
Overall Arrangers CMB Leasing
Assets 737-800
Qantas / 04-14 / JOLCO / 1x787 23/04/2014
Latest Deal Status Financial close
Overall Arrangers DBS, Credit Agricole CIB
Assets 787-8
Air China / 04-14 / ExIm Guarant bond / 2x737 23/04/2014
Latest Deal Status Financial close
Amount $m124
Assets 737-900ER

Contact us

Upcoming Events