Saturday, September 26, 2009

Test your understanding of economics in the news: Is this a change in supply or a change in demand?

The September 25, 2009 article "Airlines Add $10 Surcharge On Busy Travel Days" discusses several changes in airfares.
Several big airlines this week have added $10 surcharges on most tickets for travel on days around Thanksgiving and New Year's.

American and United added the charge for most of their fares for travel on Nov. 29, the Sunday after Thanksgiving, and Jan. 2 and 3. On Friday, US Airways Group Inc. matched the surcharge, and said Delta Air Lines Inc. added it, too.

Spokespersons for Southwest Airlines Co. and Continental Airlines Inc. both said they had not added the surcharge.

Rick Seaney of noted that the Sunday after Thanksgiving is one of the busiest travel days of the year, and that the two dates in January are heavily traveled as well.

He said the airlines probably added the charge rather than raise base fares because it was a quick, targeted way to charge more on busy travel days.

"The bottom line this year for consumers is that it's pretty clear that if you procrastinate on your holiday travel, you're going to get stung," he said.

He said holiday fares are still running 15 percent to 20 percent lower than last year, with prices to bigger cities carrying the bigger discount from a year ago.

1 comment:

  1. The airlines are doing better than ever.Not the flyers.