It’s obviously an incredibly challenging time for the airline industry, given that the massive bump in jet fuel prices is massively increasing the operating costs of airlines. Airline pricing is typically pretty elastic, so simply raising fares isn’t that straightforward (if it were, so many airlines wouldn’t be running operating losses).
Continue reading: United Airlines Admits Higher Fares Are Here To Stay, Even If Oil Prices Drop
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This human trash really knows how to sell his product. Yes prices will stay up even if gas goes down which it will. Another reason not to fly United. Substandard product, human trash CEO.
It started with him indirectly telling his competitors to raise prices, now he’s telling them to keep prices high no matter what happens with oil.
What is that called...
"Price collusion, or price fixing, is an illegal agreement between competitors to raise, lower, maintain, or stabilize prices, stifling competition and harming consumers."
That.
Couldn’t it also be that be expects consumers to get used to the increased prices? They’ll cut them down a bit once oil goes back down, not enough to be where they were and flyers will be happy to see them go “down”
Have used or new car prices gone down in the past 6 years? Come on, surely you guys have seen this game before.
This is incorrect. What he is engaging in is "price leadership," which is not illegal. It might have the same effect but one is illegal and the other is not. This is settled law.
Used EV prices have gotten great over the past few years. There are some real values to be had, same with used electronics.
Its not the same
Good for Ben who gets free flights from the airlines to write reviews. Bad for everybody else.
I’m nit sure we can have the same standards for companies that have negative operating margins outside the mileage programs. There’s limited room to collude when labor collusion has put a floor on the ability to cut fares.
Yeah, I love it when corporations become successful enough to have this level of hubris. High fares are here to stay!! Yeah, says you. However, sooner or later the market will insist on bitch slapping these guys. It's called competition and I know it doesn't look good at the moment. However, there are a couple of contenders bubbling below the surface who could emerge if they play their cards right. Every time fares explode, there's someone around to take advantatage and scoop up customers. This time will be no different.
Wow that tells you that Kirby does not care about the consumer pocket.
The best message consumers can send to him its not fly with them.
On my two most traveled short hops, United has always been 30 to 50 percent higher cash and points relative to Delta. Combine that with the lower service level.
I guess CEOs and shareholders are facing difficult times so we all have to take one for the sake of their profits, right?
A bit shortsightedness from a CEO. If things stay the same the deep recession/depression will kill demand. They think post covid bubble is here to stay.
Time will teach them and they all will run to US Govt for bail out while complaining about foreign carriers receiving subsidy.
See Lucky - this is all connected. Kirby and Bastian are giddily out there saying they want to raise prices as much as possible. Politically, in this environment, no government is going to let airlines like Spirit just disappear, no matter how bad the the economics are of that by the books.
Given that airlines do not make money on actually flying people from Point A to Point B yes it makes sense that airlines want to increase fares. Not having the core business be profitable is a huge risk.
The question is what happens if demand falls. Do airlines park planes and keep fares up or reduce fares? My bet is that you will see capacity trimmed.
@Alonso - car prices have increased (exponentially) due to selling PCP contracts to 80% of all buyers which inflate the price. It's nothing to do with the price of fuel, steel or rubber on the market.
This is nonsense. The basic laws of supply and demand will always apply. Fares will not stay up. Never have, Never will. Nice try on Kirby's part
They won’t apply if its not possible for a ULCC to survive in the US
You need labor changes to make it possible and they’ll never come.
Alonzo: Used car prices have recently declined mostly as a lag due to poor new car sales. US consumers, esp in poorer states, are struggling by median standards. Post tax season refund checks, deals can be had.
Now that HA is fully integrated, AS needs to buy B6. This augments their existing AA relationship, provides the network for a new 5th national, and adds value to Mileage Plan. While B6 has debt, AS can tolerate the hit with refinance, synergy, and HA level integration effectiveness.
Why do we allow this kind of behavior to constantly happen? Why is this corporate greed allowing the costs to be passed onto the consumers who, over time, won't even be able to afford airline tickets? The airline is making more than enough money, to have them do this is a betrayal to the customer.
We need to petition the government to intervene and artificially deflate prices. With prices this high, there should be a period of deflation where we return to pre-pandemic pricing levels and everyone will be happy.
That is false. Google "used car prices CNBC" and read the first article. Idk where you get your information from but it is blatantly false.
The fact that you can't spell someone's name correctly when it's right on your screen just shows your low level of intelligence.
Caring about the consumer, as in wanting to let everyone fly for as little as possible.
From 2019-2025, airfares have dropped 2% while, due to inflation, the cost of everything else has gone up 25%, and that was before the cost of fuel skyrocketed.
You’re saying that’s because, during the time, airlines did that out of the goodness of their hearts and out of care for the consumers?
Kirby is talking about it, but the industry has raised fares.
Do you know how much fixed overhead airlines have and how barely profitable the industry is, especially compared to profit margins of 40% in other industries?
These fare increases are way overdue, even before the run up in fuel.
Even with fares “exploding”, they are still way behind inflation, down 2% while everything else is up 25%, from 2019-2025.
These figures fall on deaf ears, happy to see the industry struggle or, at best, make single digit profit margins, as long fares remain cheap.
We want new and updated planes, and we want airlines to pay more airport costs that come from all the construction, but increased fares to help pay for all this are out of the question.
They drop prices when planes start flying half empty. they can say all they want but they don't control demand. we do. And when demand drops to other competitors, they will be forced to either drop prices again or go bust. It's a win-win for passengers.
What are your thoughts on fares decreasing 2% from 2019-2025 while everything else went up 25%, with all of that being before fuel prices skyrocketed.
20% fare increases don’t even catch up to where inflation through last year would be.
What are your thoughts on the struggling industry, with even the strongest ones making single digit profit margins, compared to other industries that make profits in the 40% range?
Honestly curious to hear. Does a cheap plane ticket make all of that ok? Remember, these are industry increases, not just at United. The other CEOs are thinking it, but just sticking to their corporate talking points.
It is wild how many people, especially airline employees don’t realize they don’t make money flying.
One ruling capping interchange fees or more restrictions on credit card APRs and they’ll all be bankrupt.
I mean look at their flying economics. Fares should be much higher given their labor costs - theyre just subsidized by extorting interchange fees from small business.
Its easy to see them lose money this year due to the new labor contracts and fuel prices.
For all those that went to the Bernie Sanders School of Economics tell me the number of industries in which 90% of the goods and services do not make the business a profit. Your fare is subsidized by co-branded credit cards, despite the annoying hawking of them inflight.
Ahh, oh, ok, one of those 'not explicitly illegal, but clearly against the intention of the law' shades of grey... got it... cool. Cool, cool, cool, cool, cool. Let's do nothing about this. Cool.
Yes, credit-cards-with-wings. We know.
Now, for those that went to the trickle-down-school-of-economics... it's not rain. It's piss.
People need to revolt on prices against businesses. Stop using them. Let the cars sit on dealership lots like they are now. No more giving in to greed.
Remember when Howard Lutnick shorted airline stocks right before 9/11? Remember how he was also "sick" on 9/11 and did not go into work at the towers.
Kirby is such a POS and I loathe United even more. He thinks he’s so smart. What’s he going to do in an economic downturn? Sit there with empty planes? What an idiot.
"What’s he going to do in an economic downturn?"
Get a Brazilian waxing and visit Trump in the White House.
I'm curious. If you were CEO of United or another US corporation, you're saying you wouldn't strive to maximize your profits if your general counsel advised you the steps you planned to take were legal.
Feels like all the airlines are riding a high at the moment. Things will change. And when they do, they hurt airlines fast. Amazing how quickly people forget how this industry works during downturns
Downturn? Meh, I give it... 3.6 (months) '...not great, not terrible.'
(No, for real, we got a freaking meltdown on our hands.)
BAHAHA. David gets it. Skip the wax, though. Purchase knee pads and mouth wash.
Riding high? Wait until you see all the 2nd quarter earning announcements (coming in July/August). Also, for those whining every business should sell their products for whatever price people are willing to pay. Disney just announced in 2027 tickets for Disney World will be as high as $219 a day. That won't stop the masses from going so Disney can (and should) keep raising costs. Airlines are supply/demand (provided they generate enough cash flow to fund their operations). As long as there is an 80+%yield factor prices will remain the same or go up. That is the way it should be - these aren't charities and don't "owe" the public low prices. On the other hand all it will take is one airline to cut fares and the others will follow.
I've got all my major trips booked through February 2027 (including booking as many Hyatt stays as possible before the price reset next month). Glad I did as I'm looking at adding a weekend trip from Charlotte to Halifax in July. Lowest fare (for coach) I can find is around $700 r/t and award tickets aren't much better. I'll likely add 3-4 more trips to my plans but already see it will be much more expensive so glad I've gotten all the ones that really matter reserved.
Sure, David, profits whatever the cost. Burn the world down, if you must. Great plan, sir. Your shareholders, if they survive, will applaud your efforts! Huzzah!
Goheelz, labor collusion? No. Capital and corporate greed still has outsized power here and elsewhere. I wish labor had the power you suggest. Time to rebalance the scales.
Got it. So now it’s cool to refer to homosexual acts as degrading, as long as it’s someone you don’t like.
Showing your true colors.
Quite interesting coming from United who has looming labor cost increases that are going to cut into their profits and his quest to make them number 1.
Remember when Howard Lutnick did not go into the office on 9/11 to accompany his son to kindergarten? Remember his brother Gary died in the World Trade Center? I offer no opinion of the man (though being in the Trump cabinet generally isn't a positive), but I like my facts straight.
Let me get this straight. You think when a firm's costs go up, they should just eat that, lest they'd be greedy? An industry that makes no profit from actually flying should charge lower fares? You are aware that airfares prior to this year were lower, adjusted for inflation, than 20 years ago. I don't think you should be making policy decisions.
Yeah, that's these people modus operandi. Use any slurs they can to achieve their goal. I find 1990's comment should be removed epically on this site.