Recently I asked a U.S. airline executive whether these are the best economic times in history.
He laughed. Someday, he said, we may look back and think so. But now that we're in it, he said, it's difficult to have perspective. Because investors always demand higher profit and better margins, few executives can stop to enjoy the moment.
Passengers have a similar inability to embrace good times. For the past three years, many have complained about onerous fees and high fares. That's true in some smaller and less competitive markets, like Knoxville, Tennessee, or Salina, Kansas. But between big cities, fares have been cheap, often as low as $39 or $49 each way for short-haul travel. Passengers have even scored deals on last-minute fares.
We're seeing less discounting now, and I suspect passengers will soon realize how good they had it in 2016 and 2017, when fuel was cheap and established airlines fought to keep customers from defecting to ultra-low-cost competition.
As I wrote Tuesday, U.S. carriers are so spooked by higher oil prices they're moving to cut marginal flights. They're not shrinking — the economy is too strong — but they're seeking to improve pricing power. Airline pricing is complicated, so it's challenging to predict how much fares will rise, but they'll likely go up.
What do you think? As fares rise, will passengers fondly remember the recent past?
