Air Fares

I always have attentions on the air fares. In the winter of 2002, the air fare from United States (Columbus) to China (Beijing) was around $ 850 for round trip. Then, the next year, in the summer of 2003, because of the SARS situation in China; less people would fly to China at that time. As a result, the demand declined; but the supply did not change; the price fell. The air fare to Beijing in that summer was about $ 600 to $ 700 for round trip without advanced perchance, which mean-- due to the SARS was proliferated from Hong Kong to Mainland in the spring time, nobody knew that the situation would be that worse, so the air fares were not declined until the summer break began, in about may. For people who advanced perchance the tickets, their expenditures might be above $800, but for people who just decided to go to China in May or later, they got the tickets with the lower price and got on an almost empty airplane the next day. Right after the SARS has been gone; the air fares went back to high prices. For the winter 2003 and summer 2004, the air fares to China were more or less about $800 to $900 for round trip.

Recently, the increasing oil price is threatens for the gradual revovering air travel and Airlines. As a result, Airlines including British Airways, and American Airlines, etc. has responded by increasing the air fares. The oil price increased, which means that the expenditures would increase, they have to raise the price or some of them scaled back their short term growth forecasts, reflecting expectations of more muted demand. In addition, for United Airline, it would be even worse. Since it is struggling to emerge from bankruptcy, it has to cut its expenditures. What I found out was that their air fares to Beijing were a little bit higher than the other airlines, it was not surprising because it usually it was (it has none-stop flights from Chicago, L.A, etc. to Beijing) but for this winter break, the air fares to Beijing will be about around $1000 for round trip. I think they've raised their prices too.

Also, the United Airline reduced its domestic flights but increased the international flights. This plan will make the supply decline; as a result, the price probably will increase. They have to do that to keep the Corp. in competition.