American pilot makes prediction that airplane prices will "skyrocket" in USA. Same here?

Forums › Travel (planes, train, cruise) › American pilot makes prediction that airplane prices will "skyrocket" in USA. Same here?

kingdragonfly

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#315531 23-Jul-2024 16:47

This well-known USA pilot is making a claim that American airline ticket will skyrocket.

His reasoning is that the USA airlines make more money through side-deals with credit card companies than actually selling tickets.

And Americans are defaulting at record numbers on credit cards. Thereby threatening credit cards side deals.

He concludes without lucrative credit card side-deals American airlines would be unprofitable.

New Zealand prices for internal flights is absolutely ridiculous, but I don't know if anything this American pilot is talking about is relevant here.

Airline Ticket Prices About to Sky Rocket

heavenlywild

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#3263647 23-Jul-2024 17:01

He can claim what he wants.

Just because he's a pilot doesn't mean he can tell the future.

Too many of these people making predictions for clicks and attention.

Scott3

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#3263664 23-Jul-2024 17:55

Ticket prices seem to have be trending down since the post pandemic spike.

With relatively low demand (due to economic conditions), I don't see this reversing in the short term.

It's only if airlines start failing, or dialing back capacity, that we will see prices rise.

The video points out that the earnings from credit card deals are greater than the profit of the US airlines, and suggests that the credit card deals are going to go away due to the recession, leading to the airlines to crank up prices to cover this lost revenue.

I think it is a bit of a stretch to say that credit card deals are going to go away due to the recession. I having researched to back this up, but I suggest in hard times that the combination of people moving spending from other means to credit cards, combined with carrying more credit card debt (at 25% interest rates), will mean the industry does OK even if bankruptcy's rise.

In NZ context:

Air NZ has a bunch of credit card deals:

https://www.airnewzealand.co.nz/airpoints-direct-earn-credit-card-comparison-table

But this means they are not getting big bucks to exclusively promote one.

I assume the income from this comes in under "other", along with stuff like advertorials in their in flight magazines... so not as massive as in the US airlines:

I don't think Jetstar offer a credit card in NZ, but do in Aust:

Jetstar Credit Card reviews ...

On Credit Cards in New Zealand, should note that our local regulators has stepped in to manage the supernormal profits of the sector.

One of the big change was to no longer allow credit card companies to insist that retailers did not pass on interchange fees to customers (effectively forcing retailers to build this into their pricing for all payment methods, or not accept credit cards). With that rule gone, and credit card surcharges becoming common, I suspect credit cards are less profitable in NZ than other parts of the world.

eracode

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#3263668 23-Jul-2024 18:32

I saw ‘airplane prices’ in your thread title and assumed the thread was about how excess demand for aircraft will push up prices being asked by Boeing and Airbus.

Sometimes I just sit and think. Other times I just sit.