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Airlines Finally Passing Higher Costs on to Passengers

April 30, 2008 at 2:30 PM | by | ()

If you've been shopping for plane tickets lately, you probably don't need us to tell you they're getting more expensive. The average airfare in the US is 10 percent more expensive this year than last. And that's before you get nickel-and-dimed by excess baggage fees, exit-row seating fees and fee fees.

Not that we are blaming the airlines. As American Airlines CEO Gerard Arpey rightly says:

There is no business that can go on forever selling its product for less than the cost to produce it.

That's the plain-and-simple reason fares are inching up across the board. And on high-demand routes, the increases over last year's prices are even bigger than that average of 10 percent.

Mergers would allow airlines to trim routes and, by reducing capacity, further raise prices, though carriers say that's not the plan. (Riiiiight.) This is all good news to one company, though. Virgin America is keeping fares low by burning through investor cash, and the airline hopes that after one flight it'll have its new customers hooked.

Related Stories:
· Strapped Airlines Seen Pushing Fares Higher [WSJ]
· American Airlines Loses $3.3 Million a Day [Fortune, via CNN Money]
· Airlines coverage [Jaunted]

[Photo: Fetchy]

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