Is $1,000 the new $500 for airfare?
Friends and family trying to visit us here in the Florida Free State are finding that airfares are usually over $1,000 if the luxury of lugging a bag on board and picking a seat is desired. Before coronapanic, the standard price was around $500. Is $1,000 the new $500? Or is Florida a special case of high airfares? (Unclear why it should be; there are a tremendous number of airports capable of handling commercial flights and it is reasonably easy to drive to an alternate airport.)
A discount airline on final approach in Juno Beach:
Related:
- “Are EU Markets More Competitive than Those in the US?” (NBER): Industries that experienced significant increases in concentration in the United States, such as telecom and airlines, did not experience parallel changes in the EU.
- “Why Airfares in Europe Are Lower Than in the U.S.” (The Globalist; 2010): The total average fare per mile in the United States for the above five flights was 23 cents per mile, while in Europe it was 11 cents. Remove the taxes and fees and Europe’s cut-rate airfare advantage is even clearer: The base fare per mile in the United States for the five return flights is 19 cents, while in Europe it is just six cents per mile — one-third of the U.S. cost.
- “Europe Shows Us Real Airline Competition” (2015): The largest European carrier has only 13% of the market, and the top four airlines have 39% of the market. But in the US, the largest carrier – newly merged AA/US – has a 25% market share, and the top four airlines have taken 83% of the market. Another clue to the vibrancy of the two regions is that in the EU, after the top nine airlines share 64% of the market, that still leaves a huge 36% chunk for all the many other carriers. But in the US, the top nine airlines leave only 3.4% for the few remaining US airlines. Indeed, the very idea of ‘top nine’ airlines in the US is sadly a rather ridiculous concept. As you can see in the chart, by the time you start to get past the top six, the remaining airlines are struggling to get as much as 2% market shares.