Scott McCartney

speaker

3,086 appearances 43 recordings 1 series first heard Jul 2017 last heard Dec 2021

Scott McCartney’s voice in public audio — every appearance, attributed to the second.

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WSJ Your Money Briefing · Why Airfares Haven't Changed Much in 25 Years · 11 Aug 2021 podcast

Sure.

You definitely pay more fees than you used to.

And airlines have, you know, they started with baggage fees, and that went really well for airlines.

In 2019, airlines collected $5.8 billion in baggage fees.

It's kind of an astounding number.

And that doesn't include the fees people pay for seat assignments or early boarding or travel.

all kinds of other, there's still some change fees and things like that out there.

So we pay a lot in fees, but even the baggage fees in 2019, they amounted to 3% of airline revenue.

So we definitely pay more in fees, but it doesn't really change the basic economics of the business that prices, if you adjust for inflation, prices have continually gone down for the past 25 years.

Well, you get less.

And this has been a significant issue for travelers.

You know, there are lots of reasons why airlines, why airfare has come down.

And what we're looking at is the average for domestic trips.

So the Department of Transportation has a statistics bureau, and they pull a sample of 10% of tickets, and they've tracked this for 26 years.

ticket prices adjusted for inflation have continually come down.

A lot of that's because of technology, more efficient airplanes, airlines burn less fuel per passenger, all of that.

A lot of it is just the fact that the internet has given us all perfect price information, and airlines feel compelled to match competitors' prices.

So,

You know, it may be that Spirit Airlines comes into a market and they're setting the pricing for American or Delta or United or whoever's competing there because the big guys feel compelled to match the little guys.

And so all of those factors have driven prices down over the years.

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