Cheap airline flights are cheap to fly, but that can be hard to justify when the airline is struggling to meet its costs, analysts said.
In recent months, the airlines’ share of the global economy has dropped sharply, with companies like Amazon and Google pulling their staffs and Amazon’s chief executive saying the company’s business is “not profitable.”
That has prompted many airlines to slash the prices of their regular flights, and some are now raising fares.
A survey of more than 2,000 airlines by consultancy research company Jetway found that they have cut their domestic flights to help reduce their costs, but many are still charging more than a fare.
And they are also adding more luxury and premium items to flights, which means people are paying more for those fares.
“Some airlines are trying to bring prices down and add new things to their planes,” said Stephen Shillingford, chief executive of Jetway.
“Others are trying not to charge anything, but they are adding more stuff.”
One major problem is the airline has been unable to provide adequate funding to maintain its fleet, which is increasingly outdated.
Airlines that are struggling to keep up with soaring demand are looking for new ways to make money from their routes.
One of the main ways to do that is by selling high-end jets or jets with more expensive seats.
The most recent survey by Jetway of 20 largest airlines found that the average ticket on a regular domestic flight was $2,200 in 2015, a 13 per cent increase over the previous year.
The average seat on a business jet was $5,300, a 25 per cent jump.
Some airlines, such as Ryanair and Ryanair Plus, are offering the cheapest fares on a range of premium, premium-class and luxury-class aircraft.
Ryanair’s low-cost RyanAir Max and RyanAir Premium fares are more than double the fares of their more expensive competitors, and the average price of a Ryanair Max ticket was $4,000.
But Jetway’s research found that some of these airlines are using their new revenue to invest in their operations.
Jetway said it was finding that some airlines were “selling premium tickets to boost profits, but the results haven’t been so positive for other routes.”
Jetway, which surveyed 1,000 of the world’s largest airlines, found that many of the largest airlines have cut back on the amount of the fares they offer on domestic flights.
Jetways findings are based on data from the airline’s own research and customer surveys.
JetWay said the data is “inclusive” of many other factors, such a whether the airline operates a hub at the airport and how often it flies on routes it considers popular.
The airline also found that airlines were increasingly using new methods to get around their financial woes, such paying employees bonuses and offering discounts for flights booked by the elderly.
Some of these tactics may be legal, but it’s unlikely that airlines are following these rules because of regulatory restrictions, said David Mertz, an aviation analyst at BMO Capital Markets.
Airlines may be tempted to make additional money by offering discounts on tickets booked by members of their family, but Merts said it’s hard to believe that that would be profitable.
The cost of living is also rising, as the elderly population ages and more people become more dependent on their smartphones and tablets.
Jetty’s research showed that the cost of a regular flight was up 9.4 per cent in 2015 compared to 2014, and it’s up 24.2 per cent over the past five years.
For example, a Delta ticket in 2017 cost $2.89 at a rate of $3,869.
That means a family of four would pay $2 for a one-way flight to Los Angeles, or $1.65 for a round-trip ticket to Toronto.
But a flight from Atlanta to Seattle costs $2 at a cost of $2 billion.
A ticket to New York costs $3.75 at a fare of $1,834.
A flight from Boston to New Orleans costs $4.49 at a price of $8,087.
“There are a lot of factors that are changing as we look at the costs of living, but I think that the airlines will be seeing that they are facing a real challenge to the bottom line,” said Mertss.
While Jetway did not find that the most expensive fares on domestic routes are being offered by the biggest airlines, it said some airlines have been offering “lower-priced” fares to attract more customers.
Jetair said it is exploring ways to offer more low-price fares.
But it said it would not be a strategy to try to squeeze more money out of the airline by lowering fares.
“We do not have the luxury to do this,” said Jetair’s chief financial officer, Richard Hoecker.
“We do have a lot more revenue than we can afford to lose.”
Jetway’s findings come