Why airlines are hiking fares and squeezing out passengers

Unless you've been living under a rock or in a cave, you would have noticed air fares across the world have been going up, up, and away. This is particularly true in the US market where tickets on some domestic routes cost more than flying halfway across the world. Gone are the days where one could fly coast-to-coast for less than the cab fare from home to airport, as happened once to your columnist, who paid $69 for a one-way Washington DC to Seattle ticket (cab fare home was $70). Although the airlines that offered the low fare sank without a trace, it was instructive for others to wise up. Airlines are now making up for lost time and revenue with a slightly more rational approach, although fuel cost and "revenge travel" spurred by receding Covid fears are among immediate reasons being cited for the high prices.

For the longest time though, it was an enduring mystery how airlines managed to keep fares low, or at the same level, across decades. For instance, it cost approximately $1,000 for a US-India economy round ticket back in the 1990s. Fast forward 30 years and it's not very different. In fact, you can get an off-season round ticket for as low as $800 although peak holiday fares can go up to $2,500.

Outside of the mysterious algorithms that drive pricing that only airline insiders know, greater efficiencies are often attributed to explain low costs. Airplanes are lighter and more efficient, and some airlines are even more disciplined. Have you noticed by the way that often the person who checks you in at the front counter also circles around to board you at the aerobridge? Apparently, it is taking fewer and fewer people to get an airplane off the ground today than it did say 25-30 years ago because airline personnel are called to do more -- for less. Much of the glamor has dissipated for pilots and flight crew and the lolly does not match the allure.

The big elephant in the room that few airlines talk about is the shrinking of seat sizes and leg space to accommodate more in an airplane. Go back half a century or so and you will find seats in airplanes were as wide as 22-24 inches with legroom or “pitch” – the distance between the back of one seat and the back of the next – of up to 35 inches. Today, there is barely any wiggle room. The pitch in many budget airlines has dropped to below 30 inches (as low as 28 on some) and the seat width to below 18 inches – 17 inches in some cases. The squeeze is on.