Also in this playlist...
This transcript is automatically generated
Yeah thank you very much.
Some frequent flyers are now -- -- be paying more of the flight of the freight to keep the airlines airborne on the phone is Kerry Erskine.
He is a former airline executive and now an airline industry -- -- -- Frequent flyers.
It's not a free program anymore you -- to pay a fee for each one of those explain how works.
Well these ala -- Charges that are that are coming on line now the co payments -- talking about for frequent flyer mile redemption I think there.
Things that are.
Here to stay there -- small manifestation of a bigger problem which you destructive about recently ticket prices are.
Too low airline costs are too high and the airlines are all operating today in -- survival mode.
Now Terry we -- we we may have a perfect.
I don't want to say storm because a perfect positive chain of events that could happen -- -- I don't wanna be pollyannish here but you have the price of oil coming down.
You have definite fare increases you have increased payments on specific items.
Could it be that in fact.
The airline industry while not flush with funds might be entering into a very positive face.
Well I think we're going to do we -- continuing phase of his survival of the fittest -- -- -- economic report today David it's that.
Airline fares would have to increase by about 20% just to cover the cost of fuel so -- -- price of fuel comes down.
Hopefully it it will continue due to come down that's that's good news but the airlines are way behind the power curve now -- -- -- The costs are still way too and ticket prices -- -- But -- you say 20% I.
You know I've been look at a lot affairs they -- have gone up even more than that.
Well on average I think you'll see that the bears have not increased.
By that amount if you look at particular segments of the industry news and -- fare increases but.
-- all -- are flat to down.
Fair is fair -- -- are down as of when I mean certainly not within the past month or two.
Well you look you're over here you'll see that the average price of the ticket does not.
-- -- currently at all.
But won't the pressure be tough for the airlines we've already had some demand destruction.
Just in the past couple months won't there be even more so if the public says -- look.
They're now that the oil prices coming down and our -- are going up it should be the other way around.
This is this is the classic balancing act but what the passengers value most what are they willing to pay for you'll see in this.
Airline business which has become a commodity business that the was transparent pricing the laws of supply and demand -- will rule.
Terry we saw sky bus go down the tubes in some other low cost.
Carriers it is the day of low cost piers gone.
No I think there you can -- Nickels together you -- certain -- of barriers to entry are very low barriers to -- various steps that are higher.
I think you'll contrary -- what so.
What -- your your former guest said about their -- airline analysts saying that there won't be any airline failures in the near future.
Think that was built in the question.
Carriers like midwest temperatures already in the tank even some larger carriers.
Have to find a way to change their business model accommodate this culprit that's really the -- But you know it's it's great to hear Terry that there -- -- some pioneers who just love the airline industry so much they'd be willing even in this environment to start another one.
And -- always be there.
That's what deregulation is all about barrier to entry is very -- Well let's hope it stays that way terriers can thank you very much -- appreciate it.
Filter by section