Why airline tickets cost so much these days

boing
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There was an ABC special that talked about how there’s a trade off between making airlines 100% safe which would end up raising prices and that in raising prices more people would choose to drive causing more traffic accidents and actually killing more people than were saved by making planes foolproof .

It was not suggesting planes shouldn’t be safe. More like they could have 3 foot thick steal walls and every passenger could be encased in a egg capsule like “Escape from New York” but that the unintended consequences would end up killing more people overall

The point is your choosing to drive might not be penny wise…

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Actual data instead of BS! Refreshing. Anyway, the data indeed shows an inflation-adjusted decline which ended around 2004. Prices were then roughly constant until 2010 or so. Since then, (inflation-adjusted) prices have increased about 15% from their 2009 nadir. This would only be a concern if prices continue to rise though, but I suppose we will see after another year or so if the trend is persistent.

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Flying is safer because the level of training and the mandatory maintenance/safety requirements. You could enforce that on drivers, cars and roads, but that would probably cut the number of licensed drivers at least in half. Not that I wouldn’t love that. We give away driver’s licenses like they are worthless souvenirs rather than the potential risk to self and others they actually represent. But I would still rather take my chances with a car accident vs a plane accident. As someone who has been responding to car accidents over the last 20 years, I personally have sent less and less accident victims to the hospitals. Mostly due to the way cars are designed and built.

Also, those statistics that tell you that driving is less safe than flying don’t take into account the driving records of those people who caused the accident. Yes, some of those people are just wrong place/wrong time and they didn’t have a chance because of what someone else did. But many of them are because THAT person was going to have a car accident eventually because they are a terrible driver. They are distracted, they don’t look far enough down the road and forecast possible scenarios, they don’t leave themselves an “out”, and on and on. In talking to a commercial jet pilot he agreed. He said good pilots are always thinking “what’s my way out if something goes sideways?”, and are imagining things that COULD go wrong in an effort to avoid those things. Many years ago my driving instructor taught me that driving defensively meant “every other driver on the road is blind, drunk, or crazy” and to expect anything. I drive not only constantly taking into account what my vehicle is capable of, but what every other driver around me could potentially do to affect me. And through training (both accident prevention training through work and driving on closed autocross courses, and the occasional empty parking lot, to KNOW what driving to the limits of my vehicle feel like) I am a driver that responds to sudden changes in my driving situation both quickly and with a cool head. I see many people driving that just freeze up when something unexpected happens. “You don’t rise to the occasion, you fall back on your training” applies to driving. If you don’t train yourself to respond to unexpected events, you will do exactly what you’ve trained yourself to do - nothing. A TV show I saw years ago talked about how pilots, particularly military or former military pilots, will be dead calm on the cockpit voice recorder until the very last second, because they are too busy working out HOW they are getting out of this situation rather than throwing up their hands and going AAAAAHHH! and crashing. The REAL odds of you being killed driving for your vacation vs flying are more dependent on your own driving skills than anything else.

And even if the odds of being killed while driving are 100 times more than flying, what are the actual odds? Pretty small.

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So one thing I wonder, Mr @GarryWay, is if this survey includes the recent non-fare revenue generators in the index, such as fees for checked bags, in-flight snacks, legroom, more restrictive frequent flyer programs, etc. If the average flyer is paying an additional $50 in fees on top of the base fare, then prices have risen by around 30% since 2009.

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Yes, fees are included in the data presented (Change-D and Bag-D columns). While fees have increased, they still make up only about 5% of an average ticket.

As for the discussion regarding safety, cars are responsible for almost 250 times more fatalities per passenger mile compared to commercial airlines. If anything airlines are too safe, which does increase ticket prices. This leads people to choose not to fly, causing more fatalities on the road.

While airline accidents are frequently tragic and involve many fatalities, they are extremely rare events. Asiana 214 suffered the first commercial air fatalities in the US since Colgan Air 3407 in 2009, and there have been no fatalities on major US flag carriers (part 121 CFR) since American Air 587 in 2001.

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[quote=“1vw2go, post:23, topic:8104”]
And even if the odds of being killed while driving are 100 times more than flying, what are the actual odds? Pretty small. [/quote]

The odds are pretty small, eh?

Roughly 40,000 people die each year in traffic accidents in the United
States [ref]. That’s 1.7 deaths per 100 million vehicle miles.
Therefore, if you drive 10,000 miles per year, your chance of dying in
a car wreck in any given year is something like 1 in 6,000.
via HowStuffWorks

Assuming you take some long trips to visit the family and vacation a couple times a year, it would be safe to say about 2k of the 10k miles per year is substitutable by air travel. Thus the odds of of dying in a given year by taking a car instead of air travel (pardon my weak math) is roughly 1 in 30,000, which is small, yes, but over 30 years of travel, is now 1 in 1,000.

Now let’s consider the circumstances. Your are driving on a highway, at high speed, with repetitive scenery, long hours, surrounded by drivers in like circumstance and truckers in a worse state. Most everyone is in a hurry, and everyone thinks they have “above average” driving skills. Thus these 2k miles probably represent a disproportionate number of the fatal mileage. If, lets say, they were equivalent to 4k of non-highway miles, that bring the odds of death down to 1 in 500.

But you also need to ask yourself, am I really that good of a driver, or do I have a “self-serving bias”? Even assuming your assessment of yourself is unbiased, you are likely to squander the benefit of your enhanced skill by taking more risks, thus ending up in the same pool as everyone else.

But not you, you are just an exception… right?

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This is because most of those fees are non-auditable and non-comparable. Airlines can charge anything they want, invent a silly name for it (like “gravity-defying energy fee”), which they’re not even forced to show you, and put that under “taxes and fees”. It’s a ridiculous loophole that should be squashed, but alas, most governments want to keep airlines sweet while forcing them to accept the whole post-2011 security theatre, so they have to let them get away with something.

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They’re only expensive relative to the cheap prices that were available a few years ago. Relative to the value they offer, however, I’d argue they’re still fantastically cheap.

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I wonder if the ticket price is effected by the $3.6 million per year American Airlines pays the CEO or the $20 million severance package he will get for putting American Airlines in bankruptcy. Or perhaps Delta increasing CEO compensation by 42% from $8.9 to $12.6 million. Maybe the 44% pay increase US Airways CEO received this year has an effect. Even Southwest Airlines increased CEO compensation by %15.
Looking back at 2009 this chart show me exactly why air fare is so costly

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Two giant holes in your arguments:

  1. Less than 1% of accidents happen more than 50 miles from home. http://www.calculateme.com/car-insurance-articles/where-accidents-happen.htm

  2. As I mentioned, I go through emergency vehicle accident prevention classes yearly. I am trained to expect people to do completely stupid, counter-intuitive things, while I negotiate a large emergency vehicle around them, constantly scanning, forecasting, evaluating and reacting. This plus all of the accidents I’ve seen have made a more cautious driver rather than one who thinks they can bomb through traffic in my daily driving. So yes, statistically I AM the exception to the rule. How many of your 40,000 statistic had ANY driver training beyond the laughably pathetic amount needed to get a license?

Also, think about this: What influence do you have over the safety of your airline flight? None really, other than choosing to not fly carriers with poor safety records, maybe avoid the really busy airports or ones that are known for bad weather, etc. But the majority of your safety is already decided by the people who maintain and fly the plane you’re in, or help it on it’s journey in the form of air traffic controllers.

If you are going to just rely on statistics for your answers, what are the stats for how many of your 40,000 deaths were cause by a true accident. i.e. something that could not be foreseen and wasn’t caused by the driver’s bad choice (not being sober, not being rested, driving beyond vehicle limits or conditions, not securing the load in their pickup, not practicing simple driving skills)? Don’t have a stat for that? How many of those 40,000 were killed when something fell out of the sky on to their vehicle or someone hit them completely blindside with no chance to react? It’s pretty obvious that the number of people who did (or neglected to do ) something to get themselves in an accident far outnumber the people who were completely innocent bystanders that had no chance to react. In fact the latter group is small enough that they usually make the news when they die in an accident. Last year a tree fell onto a car on Highway 2 here in WA and killed the occupants. How many of your 40,000 fall into that category? Also, how many of those are trained long haul truckers (who you seem to think are more likely in a “worse state”) and how many total miles have they traveled in their career? The How Stuff Works article references a link that does not go through to the actual page on the Pipeline and Hazardous Materials Safety Administration article they are getting their numbers from, so I can’t check if they are really basing their claims on the 3 billion or so miles the US DOT says are traveled by road currently.

I guess if you take as much control over your own driving as you do over the piloting of the commercial aircraft you are sitting in the back of, then you will be a statistic.

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  1. Base Rate Neglect
    Accidents are not at issue but fatal accidents are. Most driver miles are within 50 miles and so obviously most fatalities will be also. The question is what is the rate of airline-substitutable fatalities? I couldn’t find any good data, but the best I could find indicates that 20% to 50% of fatalities are more than 25 miles from home (I couldn’t find a 50 mile cutoff).

  2. Risk Homeostasis
    I can accept you are a well trained driver. Good studies show, however, that individuals push themselves to the limits of safety, such that overall risk remains unchanged.

  3. Overconfidence Effect
    People (men especially) tend to think they are better at something then they actually are. This bias can be trained away, and perhaps your training does that.

  4. Illusion of Control
    This is a general issue some have with air travel. All other things being equal, people prefer something they have direct control over than something they don’t, regardless of the data. Ask yourself, what data would convince me that giving up control is better for me than otherwise?

  5. Practicality
    Cognitive biases aside, requiring every driver to have the same level of training as a professional is impractical (although I am not sure if you are proposing that). It would raise the cost of driving significantly and require a huge infrastructure to administer. If you think DMV lines are long now…

  6. True Accident
    This word, accident, I do not think it means what you think it means. Are there good things we can do to reduce our risk? No doubt. Can I arbitrarily define some subset of driving conditions that have an equivalent fatality rate to air travel? Probably. That doesn’t change the fact that the risk of a fatal automobile accident in general is significant enough to care about, and that air travel is multiple orders of magnitude safer.

When everyone is driving Google cars, maybe automobile safety will significantly improve en masse, but until then, I plan to stick to public transportation when I can.

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Divide CEO compensation by tickets sold per airline. What number do you come up with?

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On a long enough timeline the survival rate of everyone drops to zero.

Your comparison of the flight safety statistic with the driving statistic is a false equivalency and I think you know why so I’m not going to waste anymore time on it.

I’ll stick to what ever transportation mode suits my needs and wants. Everything you have argued depends on statistics. Problem is stats mostly work in one direction. An insurance company doesn’t care about the individual person’s skills or training, as they are just looking at the group and what their average outcome will be. But as an individual every experience will be unique and NOT homogenized. Stats are great for deciding what to charge 100,000 people for car insurance, but stats are terrible for individual daily decision making like “should I drive to visit grandma or fly”.

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I think you might be missing the larger point here gprimosh. These exorbitant salaries are examples of how these airlines treat executive compensation. For each of these CEOs there is an army of executives both senior and junior. A company that compensates a CEO in this manner will also be paying these other executives in the same manner. It’s a matter of culture and priorities.

A company that values executives so highly it will pay these obnoxious salaries is a dysfunctional one - especially when these CEOs take these airlines into bankruptcy. So, you see, this is less about the CEO compensation per ticket sold and more about the cost to the company of running its management like a pension plan for the elite.

By the way, I wonder how much of each ticket sold goes to paying for ground crews, flight crews, and pilots. I suspect it would be a smaller percentage than the CEOs share.

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