Airline Ticket Prices About to Sky Rocket
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- Опубліковано 30 вер 2024
- Airlines have been reporting record profits but in reality they are losing money and it's in the billions of dollars.
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kelsey’s lack of intellectual arrogance and being strictly concerned with making sure the facts are right is so refreshing given how the internet is these days
The only correction is Americans don't pay bailouts with taxes. The government runs a deficit so we pay this with inlfation.
One of the many great qualities of most pilots from what I’ve noticed.
Imagine being his FO and he hits you with this rant.
OK, but the verb is "skyrocket", Merriam-Webster strictly concerned.
"sky rocket" is the _noun_ .
I really wish people would stop equating tone with substance.
Kelsey might put on a humble tone, but, for example, IIRC, when Kelsey made his video on the Royal Air Maroc 737 that "failed to take off", his video had a distinctively judgey tone, whereas Mentour, for example, actually calmly analyzed the situation and concluded it just ran into wake turbulence from a plane that had landed earlier, and the pilots handled the situation calmly and professionally.
Whenever someone comes at you with a "I'm not an expert but...." the first thing you should be thinking isn't "oh, how humble", it should be "so why are you commenting on this? Find an expert".
reminds me of the old joke, "we lose a dollar on every sale, but we make up for it in volume."
And sometimes an empty warehouse is worth more than the product in that warehouse and sometimes you gotta lose that dollar to get the warehouse cleaned out
@leafboye33 well, if you have inventory that isn't selling, then yes, losing 10% on it is better than losing 100% on it. But restocking it would be stupid.
"A quick nickel beats a slow dime" was a better retail slogan!
Right . ? WTF ? 😢😮😅
@@LeafBoyehuh ? Get some rest -
Holy crap, I'm listening to an airline pilot - who _repeatedly_ claims to be "not very smart" - provide me with a very logical, cogent, and understandable explanation of the macroeconomics of the passenger airline and credit card industries.
Sorry to be the internet pedant but this is microeconomics as it's related to individual entities or markets. 👍though on the rest :).
@@Jernaumgyou just couldn't stop yourself huh
Amazing feedback ya’ll. How’d you do that tiny text?
@@Jernaumg I can be a pedant at times, too. Economics was never my strongest subject. No worries.
@@151balance By "tiny" do you mean like _this_ ?
You know the economy is broken when Airlines make money from giving out loans instead of you know... flying.
Anyone can make money by giving out loans
They aren't giving out loans though, they make a flat rate per travel mile from the banks. Some get points on annual fees, but none of them make money on interest. It's a bank product that the airlines partner with for a free revenue stream. It's banks competing for market control with rewards, not airlines becoming banks.
You clearly don’t realize how many normal corporate companies do all sorts of side investments and biz deals. Even a company buying and selling its own stock has nothing to do with movie seats and popcorn and video games.
If a company buys and sells its own stock that’s the same as the company trading baseball cards. That’s not the companies biz model. Stock trading is not the consumer good. Hello?!?
The Banks Own Everything and everyone
It’s more than flying in general is hard to make profitable
Kelsey, you are by far one of the most straightforward, knowledgeable content providers here on utube. Your videos are always entertaining and educational. Thank you, keep the Blue side up.
30 seconds in and Kelsey's already roasting people. Love it.
why?
yuh
I see he roasted the top of your head years ago.
Clearly he didn't get any snacks today, lol
(but it's honestly a quality video from him)
Wired
Airlines are basically banks these days with their frequent flyer mile programs.
Yeah, there is a video on this from 2 or 3 years ago. It's very interesting
@@Willbrse Yes, Wendover Productions, "How Airlines Quietly Became Banks". They're really more like a central bank than what you normally consider a consumer bank, since miles programs are a lot like printing your own currency. Airlines are banks with a side business in air transportation.
I'd probably pay an $80 premium to not fly Spirit Airlines.
GM used this model. Basically sold the cars at cost and made all the profit on the loan interest. Also, the biggest airlines are considered critical defense infrastructure so they'll always find magic money from "somewhere, somehow". A few of the biggest banks are also critical infrastructure and will be bailed out. Hmm....
I'm not sure Kelsey has this quite right. I recall an analysis a few years ago that showed how it isn't really the credit cards. It is the loyalty points themselves. Those points have economic value, are traded, and generate revenue. This analysis concluded that the loyalty points are really a shadow currency that is difficult or impossible to value, which (as a result?) ducks tax liabilities, and which is the main source of airline revenue. I cannot remember if it was suggested that fares are kept low to minimize tax burdens.
@@ef2bnot exactly buy for a dollar sell for two
I’m looking forward to the day we get blessed with “Kelsey Airlines”
nice to find you on here since you’re one of the best remaining creators on youtube too but i’m just planning for a transatlantic trip and was shocked seeing prices on a ticket go up by $600. Calling the agency today to haggle because that’s bullshit.
In this economic climate, I wouldn't want to wish that on him; I'd rather be a janitor! XD Or do you mean after the inevitable collapse of civilisation, when Kelsey gets together with Peter Sripol to build and run the first post-apocalyptic airplanes? Oh wait, maybe not Peter Sripol, he does crazy stuff like making a cardboard electric boat, though he can make just-about anything fly! lol
Well said
😂😂
It would hopefully be full of 747s, A380s, and (my favorite) A320s.
And also do nonstop from BOS(ton) to LA(x) for $68 each way during summer season, and equal or less year-round.
He should brand it KELJet. "We take the heavy loads, like your ex-wife, so you don't have to." 😉
I was an airline pilot until recently, completely agree with everything you said. It was one of the reasons I left my career of 20+ yrs.
how hard is it for aspiring new pilots to get a good job? Do you see a good future?
@lancaster5808 I understand why you would ask that, but it's almost impossible to answer as everything in life is personal opinion on what is "good". I can tell you that pilot terms and conditions are deteriorating, I have worked for 2 different UK long haul airlines and work/life balance has disintegrated. The pay is good but taxes are so high you see very little of it. You have to sacrifice your family life and the career as a whole is incredibly bad for your health (mainly due to sleep depravation and constantly being out of your circadian rhythm). In terms of a future in aviation it's hard to say. They are actively working on pilotless aircraft so.... in reality, that is probably 20 yrs away from being common but I would expect them to reduce the crew required on flights. Long haul will go from 3/4 to 2 and eventually 1. It's a tough call but go with your gut and commit fully, if it turns out to be wrong just have the courage to change. All the best.
@@lancaster5808as the effects of DEI hires in the airline industry really start to show, we’re going to see a massive loss of confidence in air travel, especially after an incident that causes loss of life. It’s only a matter of time.
IM guessing your networth is about 30m.
@@colinmacdonald1939 I would never fly an airline with only 1 person on the flight deck and zero flight attendants. That would be the crappiest flight ever. No service...here's a vending machine...
Congrats on your four stripes, Kelsey! Haven’t been on your channel for awhile so that was a pleasant surprise!
I think it's been almost a year now since he got his fourth stripe.
3:03 The dreadfull media offline screen is my worst fear when I edit video for youtube
Someone was on a deadline.
[comment redacted]
Premiere tried really hard to warn you when that happens though
Yeah, that's rough. Though most users won't notice what it is, only a select few.
Gave me anxiety. Lol
I look forward to Kelsey Sundays. Thank you, Captain.
thats not what the unemployment rate measures...
Yep. And we surely miss you on your"off" Sundays !😄
“I jumped in the old Google machine “🤣🤣🤣🤣🤣🤣🤣
Ol’ Dr. Google
Think what he could do if he would ditch Google and turn to AI.
@@davidcole333nothing?
@davidcole333 the AI that incorrectly claimed that there is a new road tunnel near where I live when I was asking about a nearby railway tunnel that was decommissioned in 1900? There is a fairly new road bypass but it doesn't go through a tunnel.
I think he means the interweb.
Thank you for your time and posting. In the early '90s, in Australia, a plane ticket across the country (Perth to Brisbane let's say), was about $2,000; economy.
😢😢 shit bro
In the US flying was certainly more expensive back before deregulation in the 80's, but it was ALSO a hell of a lot more pleasant re regulations, etc.
Please remember that ticket prices vary widely especially if you are NOT near a large airport or Hub. I can fly from Atlanta or Tampa to the Cayman Islands 6 times round trip for what it cost to go from my local airport, into Atlanta or Tampa and then to the Cayman Islands round trip. They are crazy expensive from small airports.
Agreed. Tickets from Atlanta or Orlando are so much lower I take a bus to those airports from Jacksonville then fly out rather than pay the extra hundreds of dollars to fly from JAX.
I wish you ran the news department of any of the major tv networks
I bought a car a couple of months ago when I learned that the dealership wasn't selling cars, they were selling financing. My paying cash for a vehicle made me persona non-grata. as they could sell the same car to someone who would also buy financing. Yup - we live in that world. Kelsey - check out "equity funds" next. Another horror story for all of us.
you are 100 percent correct well put
Very true, you can always finance (Make sure no penalty for early payoff) then pay it off the next day or even later the same day at the finance desk, they love that HAHA!
That’s not a thing. Must have been the dealership you went to because I’ve never had an issue doing that.
Its been that way for a long time, I always pay cash for a car, I worked for GM many years ago and even there they were more worried about the financing options the the car options.
I was in a garage last week in the UK and a guy was trying to pay cash for a car. The salesman said he could offer a better price if he would pay even a little if it on finance. It seemed all backwards to me, as I come from an era where ‘Cash was King’. Now it seems everyone wants yo7 to get into some sort if debt as they can make money from it.
How can economics really work in favour if the average person if that continues. The only people that benefit are the executives and major shareholders if corporations that profit from other people’s misery. Having said that, we are guilty of living beyond our means, and who encourages that? Big corporations and governments!
Your expertise goes way beyond flying an airplane. Great tutorial on the economics of commercial aviation. Thanks.
Maybe its not "expertise" beyond flying, but kind of interest for where my salary comes from and is it stable in future? On those points of thoughts I would dig little bit deeper, is my workplace secure or not, And what to do, to secure my position. (and if not, what else I can do for my living).
@@jormalonnberg1578 The airline industry is notoriously unstable. Lots of booms and busts. Especially so in the US since price deregulation 45 years ago.
It behooves anyone with a job to look into the business (and wider industry) they work for and get a look at their overall health.
@@jormalonnberg1578 And the ability to think clearly, then put those clear thoughts into words. I don't think Kelsey has any expertise about the facts of airline balance sheets, but rather a common-sense way of looking at "okay, they made $3 billion total. They made $5 billion from credit cards. Therefore all their profit is from cards."
It's an ability to think things through, rather than expertise on a particular topic. People have told me it seems like I know about just about every discipline, every topic. Economics, chemistry, whatever. I don't, of course! I just realize that 5 - 3 = 2 in every context. $5 billion - $3 billion = $2 billion; 5 molecules - 3 molecules = 2 molecules; 5 meters of pipe - 3 meters = 2 meters of pipe. It's not that I know plumbing and chemistry and airline economists, I just know that 5 - 3 = 2, all the time. :)
@@senseisecurityschool9337 That was thing I tryed to say, but my inability in english language is on my way, to do it clearly easy undersandable as you did. But I still try to do my best.
no economic downturn in over a decade he says, comments full of praise for his financial sense. wtf?
Thanks for all the great information...
I have been pricing flights to Europe for fun for a few years now.
United Air Lines just started charging EXTRA for the cheap seats... approximately 20 usd for cheapest seats, so you buy your ticket and THEN you get to buy your seat.
Drop dead airlines.
Im from europe, i dont know how it is there but here in low cost airlines if you dont buy a seat you still get on the plane, its just that you cant choose where. So you pay the ticket and when it asks you to buy a seat you just decline and thats it
@3:45 “just had to pay for that trip to that exotic destination for that girl you met on Onlyfans…” yep, Kelsey definitely speaking from experience here. 😂
doesn't he have non-rev privileges he can share? 🤣
He "had a friend" this happened to.
That’s what I’m thinking also. Some girl scammed him
Nah he ain’t a simp
Yep. Anyone bagging on onlyfans is 1000000% a customer.
People, people, never take out a loan for a trip. You don't have the green, your ass should stay home.
Gee I did that at 8 years old !!!!!!!!!!!!!!!!!!!!
Exactly, which is why we haven’t flown for a vacation for years. I’m not putting anything long term on my credit card.
I always say that if you can't afford it you shouldn't buy it. I've never taken a loan in my life but I don't need a fancy house or a brand new car.
Correct
Rich people ask, "How much is this?" Poor people ask, "How much is this per month?"
What's funny is that people who pay their full balance every month are called 'dead beats' by the credit agencies.
But, I get a higher credit score. So I'm a happy deadbeat...
830 FICO a DB
@@hogger51 And I sleep well at night so I'm an even happier deadbeat
I remember that. Because late payments they can charge fees and higher defaulted interest rates. So, someone who pays on time is 'the bad guy'. lol
@@hogger51 not necessarily. Paying off your card in full actually makes you less attractive to lend to, as the banks won't make any money from you. Backwards though right!
Did you mean to say the airplane ticket prices already rose?
The info isnt up to date.
5:00
That graph is from 2023 q1 not 2024 q1
7:00
Those earning reports are of 2022 and 2023
I really appreciate your knowledge and willingness to share it, Kelsey. And your sense of humor. Thank you.
The credit cards carry obscenely high interest rates. Unless you pay your balance every month, you are screwed.
And that’s what they count on… if it were anyone besides the banks, it would be called loan sharking ..
Every month ? Make sure to check that your billing cycle isn't like 29.3 days.
@@gwag8410 And that's thanks to lobbying. The credit card companies are generally exempt from usury laws, which means in theory they can charge triple-digit interest rates if they feel like it. I'm just waiting for them to decide we have a critical mass of credit card debt (currently $1.115 trillion and counting) and double the interest rates for a very easy payday.
@@karlkoehler341 You mean banks will play games with you and change the rules? I'm so shocked.
Hopefully higher prices will put the riffraff back on Greyhound.
My most recent trip on Alaska Airlines, the flight attendants were pushing the card and said even if you had the card already, it’s ok to apply for a second one. 😂
Home Depot did this to me. They were okay if I had a second Home Depot Credit card!!
European airlines don't do this. Even on discounters, there is no creditcardissue.
That's absolutely insane! I get left alone once I tell them I have it.
The staff want to keep their jobs.
😮🙈🙈
Good point. But CEOs especially in USA don't care about long term. They give record payout to their investors, and move on to the next better paying job, leaving the company and its loyal staff to swivel.
They do stock buybacks to juice the stock price without adding any real value to the company.
@@dannydaw59 We're entering the post-innovation and post-value era of the economy where companies just become parasitic rent seekers.
That's what caused the global financial crisis. Approving loans for people who couldn't afford them. Of course the lender got his fee and commission they they move on to a new bank.
The bank had a term for these desperate borrowers. NINJA.
it stands for no income ,no job no assets!
But the home lender wanted his commission it didn't bother him what would happen to the desperate families when they defaulted 😢
@@dannydaw59 It used to be illegal until corporations lobbied and changed the laws for stock buy-backs. In the end, it's the taxpayers and customers that get the bill and lose. The CEO's skate away with $ Millions, plus bonuses.
No more bailouts, ever!
What's stopping the loyal staff from investing in the company? Then they will get part of these record payouts to investors.
The US economy COULD actually boom. After coming out of Covid there were many companies that couldn't get the employees they needed. There are businesses that simply couldn't take on work because the lack of people. Most are manual labor which could be filled by anyone who crosses the southern border.
You could say that's taking jobs from Americans, but then you didn't read the last para. 90 some odd % of Americans won't work those jobs, and for the less than 10% who will that's not enough to fill all the positions needed, and once again there are many companies that didn't take on jobs that they COULD be working. Most of this is with the power grid, but there's also infrastructure money not being spent.
If the US WOULD allow work VISAs to border crossers the economy would be on FIRE because it would be a BIG boost to manufacturing.
And in case people don't understand what this is, it's from the Inflation Reduction Act and it's installing solar and wind farms along with improving the grid, all of which needs to be done to move to BEV. Yes, this is a few million jobs
So, we'll agree to disagree about work in the US when there's work that can't even be done. And this is also affecting infrastructure jobs. Seems global warming causing it to be hotter and wetter means the heat index is such that once again 90 some odd % of Americans won't do this work, road work, building construction, etc............................................................
If there's a bust it will be because of the jobs that weren't undertaken that should have been. And last I checked consumer prices for goods, so excluding vehicles, rent or mortgages, the inflation that came about in 2020 - 2021 has mostly gone away, with some exceptions. In fact I'm buying a LOT of stuff that is cheaper now than in 2020. When it comes to food, same thing, a lot of prices are back down to 2020 levels, UNLESS grain is involved and if you want things that involve grain which includes beef and chicken to come down in price then you want Russia to stop attacking Ukraine. A good chunk of EXPORTED grain comes from Russia and Ukraine, and there's other main staples that come from there.
The worst thing that's happened in the US, in bigger markets is a large increase in rents/mortgages, and the only way THAT'S coming down is for govts. to incentivize a lot more housing construction since in many markets the problem is a LACK of housing, but there we go again, not having the workers to do construction in the middle of summer heat.
So, can I tell you how STUPID it is that we aren't working border crossers? Oh wait there's too much vile and politicization on that issue so people don't listen to common sense. Yes, it's a few million jobs that aren't getting worked right now in the US in multiple markets, because manual labor has typically been done by illegals since most Americans won't work those jobs.
People are just dumb is the problem. Don’t spend more than you have. Live well within your means. It isn’t difficult.
If I don't get that credit card and use it, it's my fault the airline goes bust. What a quandary. Some people invest in mutual funds; I invest in firewood for my house in the middle of nowhere.
Smart man. Hope you also try to grow your own food?
@@kerrryschultz2904 it's middle of nowhere cause can freeze any night of the year. So it's challenging to garden. There are ways around. We have grow tower in basement. And plans for underground greenhouse.
Nice!!! Most of my investments go into my homestead, too. I’ve produced and maintain at least 3 years worth of firewood. It’s such a great feeling if the power is out knowing that I can still heat my home with no worries, and if we need water while the power is out, I just fire up the generator while we’re running the well pump, and all is good. Cheers!
@@stephenmahlstedt7276 good man!
This has been the norm for airlines for 60 years. Operating on a shoestring, accepting unsustainable wage and benefit proposals. A dozen bankrupted. Another dozen forced to merge.
3:07 ah yes the infamous “media offline” page, every editor’s worst nightmare.
Why?? I don't understand
@@vedanlkektokekto6872 basically means that the footage you have either got corrupted or needs to be reuploaded into the editing software you’re using. It’s a bitch and a half to deal with.
Yup, but it making it into the final cut for the client is a huge fuck up that’s easily avoided if you proof your work. I’ve certainly exported plenty of videos that it slipped in, but I always caught it. But the military has some pretty high standards for making sure you don’t do stuff like this, at least from my experience.
@@AdamKeelewhat do military standards have to do with anything?
Do you not think the rising population will just bring in more people who will apply for these cards to keep the cycle going regardless of how many people default?
Didn’t airline tickets just recently go up by 2-3x from pandemic? They’re crazy expensive right now
My neighbor that's a United pilot, always says that airlines loose money on passengers but make it up by flying cargo.
Yup. My thought was that the planes passenger compartment might shrink and they capitalize on more cargo per flight than passengers.
I unfortunately flew to Tokyo business class (round trip), and they denied me air mileage. AND, told me to prove it. 🤔 OK, here's my 'certified ' passport copy as well as my flight ticket 😛 United wasn't counting on me to contest their request with proof.😳
Lose!
I think Kelsey (or maybe Mentour Pilot?) mentioned this in an older video. But, it depends on the airline and other economic factors.
@@empireoflizards We should all keep in mind Kelsey didnt tell the whole story with those numbers he highlighted. Of the 52 billion something American made, 90% was direct operating expenses, and there are more liabilities further down the document. Compared just to their 14 billion and some change salary and benefits liabilities (ya know, payroll), their net income (remember more is still coming out further down the document), $822M, with an m, is 17% of what they pay out in payroll, wages, and benefits alone. That number at the very bottom, 822 million....that is just 1.55% of that 52 billion gross income.
Yes, its a lot of money to us plebeians. But they are a multinational airline company. They are shoveling stupid amounts of money thought the economy, and make 1.55% of what they bring in. Compare that to your salary. Now imagine someone came up to you and said "well you made [whatever] thousand dollars last year, you can afford to give a bunch of it away! Greedy fat cat!!!" I personally would not blame you for bopping them in the nose then throwing your starbucks cup at them. In fact, I saw the whole thing officer, that person fell onto that other persons cup and hit their nose on the curb. Business finance is a whole other game of numbers, yo. And thats not any one person's money. Its a publicly traded company. The cash on hand line (the actual money in the account they have that belongs to the corporation), and all its assets (anything it doesnt rent including uniforms, desks, chairs, computer monitors, the door on the executive conference room) are divided up between and belong to the investors. Often CEOs only have a token salary of $1, the rest is in preference stocks (which are as legally binding to pay out as the power bill or mortgage). ie, if the company does good, so do they. If not....they take it personally because its literally their take home that is impacted.
Now, all of that is not to say credit card schemes arent scummy. IMHO, they're all scummy. I stay away from all credit card usage personally. If i dont have the money, I dont get it, because I dont have the money. plane and simple.
Im just saying take a business accounting course some time. Its really easy, the spread sheets do the work for you, and trust me, they are freaking awesome. Seriously. Its not hard. Let go of the trauma left over from high school homework. And if you're an actually nerdy type...its kinda fun!
And more to the point, the big numbers on financial statements only tell a tiny sliver of the whole story. Dont fall victim to the tunnel vision Kelsey expressed here......The bits he highlighted are mainly what they put through the economy spread out through everywhere they serviced.....imagine 52 billion dollars stopped moving through the economy.....if that doesnt tighten your balloon knot, Im afraid you might not understand how national economies work......
For clarity: any use of the word "you" is a colloquial third party removed from of "you" aimed more at the reader and not necessarily aimed at the commenter this post is in reply to.
Once again Kelsey keeps me "grounded" no pun intended, in aviation facts! Thank you, Captain!
Howdy Kelsey. You have an uncany knack for "jesting" and entertainment with your vids. Thank you!😊
Uncanny is an underused term.
Airline Pilot here and someone who has also worked in corporate America. Corporations can EASiLy move money around and not show profit. They can spend money on new equipment. Donate it. Give it to their employees. Pay off large Assets. Go into more debt. Don’t believe for one second it’s the credit cards that make Delta Air Lines profitable. It’s moving metal. Yes they do make money on the cards but people buy the cards to get into the lounges etc. Credit cards are how the Western World pays for everything.
Well, this video is informative. I would like to add some things like if airlines raise their prices to cover cost lost because of credit cards, then that would be a doubled edged sword as it wouldnt work well for them in the long run. Now it probably wont come to that since the govt will bail them out again. Also when booking flights followed by the break down of the price you can see that the airfare is usually cheaper than the tax associated with it. Some trips are about 300 give or take depending where you are going but the tax may be around 800. Maybe one video could be about the enormous amount of tax and what its "FOR" even though it says 911 tax and so on. Is it really that much for the taxes. Some places abroad charge municipality tax and airport tax and other tax.
The tiny fares are reflected in the number of unsavory butts in the seats. There will be much less of the current antics when the fares are sufficiently increased.
Abso-freakin-lutely.....I refuse to fly Spirit or Forntier. I'd rather pay more and be somewhat more likely to fly with a more civil group of people
I call them “bus people”.
You might as well fly Grehound these days..
Yeah but then I can't fly either 😢
It's terrible to say, but you're absolutely right. Over the years I've chosen to do less things, but do more expensive things just to price out the problematic people. Hotels, flights, adjustment parks- anything.
As a video editor using Adobe Premiere, that screen at 3:02 has to be your worst nightmare especially when you're doing a delivery for a client
i saw that and got immediate palpitations lmao
Why though I don't understand
@@vedanlkektokekto6872 This means, the original attached media on the video e.g picture here, was moved to a new drive or location. So if you don't link it back to the video before exporting, it will show offline media.
@@rishipopat6708 I am busy editing a video and I thought it was mine that was showing offline.
I just booked a European business ticket on a 4 hour flight and was told, no meal supplied (threshold is now 4.5 hours). It's double the cost of the economy seat, but that curtain they draw across the cabin will make ALL the difference to my flight comfort! Yea airlines, cry me a river.
What airline? So I can avoid ever accidentally booking them.
It's not the curtain or the meal, it's the bigger seat that actually reclines and ample legroom that make the difference. I'm 5'10" 175lbs and barely fit in economy. Sometimes it's worth it to pay extra, especially on a long flight.
@@toddsmith8608In European Business class, you get the exact same seat as in economy, just with the middle seat blocked
Bangkok Airways from BKK to CNX about 1 hour flight and in economy you get a meal and drink. You schmucks in the US let the airlines treat you like cargo.
Ok, i didn't know that.
Doesn’t the net operating oncoming include the credit card earnings in the “other” section? Im not sure I fully understand the math happening at 7:23 . The number isn’t the same on their income statement so it doesn’t fully make sense, but the net income should be purely after their operating costs as you’ve mentioned so it’s positive right? Like they earned $12 billion when factoring in the credit card payments as well if they aren’t captured in the income statement for some reason?
Maybe I’m just confused but any explanation would be helpful thanks!
It's unlikely the airlines will be requesting and receiving a government bailout because of these stated parameters. I do agree that airfares will need to rise at least a bit, salaries of employees will need to be readjusted downward, and for those with profit sharing - reducing or eliminating those respective amounts. (Increased airfares and reduction of profit sharing should be actions probably occurring first if necessary. As a shareholder in Delta Airlines, I have long asserted that the profit sharing payout should be based on "actual" profits from only the airline division operations, deleting out the income from the AMEX credit cards and oil refinery in the computation. And Delta management would be wise to stop "throwing" money away by investing in other companies; their track record on this is abysmal.)
But I also need to point out that the airlines are not the only companies that obtain revenue from co-branded credit cards. Retail merchants, auto companies, nonprofit charities also use the association for income.
Woah! How did you know my girlfriend's mom was sick?
She's MY girlfriend.
"If you think like me"; they don't. That's why humanity is screwed.
""if you think..." they dont. Thats why humanity is screwed"
Fixed that for you 😁
@@TankR Haha! But the arguments they come up with for not thinking are themselves some pretty incredible pieces of reasoning. ("Incredible" is working really hard in that sentence; there's so many ways it can apply, including its original "in-credible", meaning a perfectly literal "unbelievable".)
Very interesting analysis Kelsey.
I'm in Europe and we don't have this craze on credit card, it something that's just not that much in our habits. And no private company other than banks or specialized business offert credits. It's highly regulated.
And indeed even cheap airlines (totally not looking at this irish one???) are pricing more and more, and tends to cut cost as best as they can.
I live in Orlando and my son and I were swimming in the pool and he goes daddy what it that plane what up in the sky, I told him hold on and pulled up the flight tracker and it was a cargo 747 flying from Miami to Anchorage and I immediately wondered if Kelsey was flying 😂😂
Airline tickets have gone up dramatically! First class ORD-Las was $800 pre covid. Now it is $1500+
😮😮
hush
First Class? Well, la de frickin' da, Mr. Rockefeller.
Flight from Tampa to Japan is up from 800 to $1400 over 6 years
Yes, this is depressing. I am forced to downgrad to business when travelling for leisure. But once Trump is re-elected, prices will drop 90 percent.
The cost for a regular seat may be low when booking 2 months early, but the cost to fly in a few days is very high. I often see $900 to fly nonstop roundtrip between 2 bigger cities, while the cost for others is around $300. Like credit cards, the late bookings increased fare is used to offset the low cost for early bookings to average the income from the flight much higher.
Yep and let's not forget that at least in my airline for Delta one on an international flight can be In the tens of thousands of dollars for a one-way trip. So they definitely make money off of the premium seats and the customers that pay for them on Long haul routes
Wow, Kelsey, really great information. Thank you. I’m going to pass this along for sure.
first of all Delta pays their staff more than Spirit Airlines that is #1, #2 Delta is probably the best airline out there and so you get what you pay for..
how ever your right, more and more people are going to default on their credit cards and so, these banks are going to put a halt on giving these cards out, this will mean, All these airlines are not going to be taking in 4 and 5 billion dollars and probably find them self losing 800 million to 1 billion dollars, this will cause the airlines to say hey we need these people to pay more for the tickets and change 2 to 3 times the amount of money, so your use to be airline fare of $140.00 will go up to probably around $300.00 for the se same tickets..
You have to do the math if the airlines are not taking in these bonuses from the banks they will have to get it somewhere else, and where would that be? Yes the Passengers..
This will also cause a drop in people taking airline flights and then be come a catch 22 and cause the ticket prices go to up to even $500.00 or $600.00 because, yes less people flying because they can't afford it..
But as the economy gets better if it does this will all go back to normal, but it will takes years maybe 5 or 10 years..
3:02 media offline and 5:12 multiple takes. Kelsey love your content, need someone to check the edit! Or maybe it’s just Editing nerds like me that see these things
Agree 100%. NEVER carry a balance on a credit card.
If you mean balance... as in remaining room on card, I'm 100% with you
This is the best time to carry a balance on 0% apr cards, which a lot of that data is coming from. Making 5% from money, I was going to spend anyway. A lot of this talk is fear porn. Aka clickbait.
These days I'm inclined to avoid credit cards, using a debit card instead that won't build up a massive debt if I don't have money in my account.
I only keep a tiny balance so it shows I'm using credit. Got my first card at 18, already got limit increases and got a good score at 20.
@@chefmastermikecmm8465 Absolutely, it's silly to pay off a 0 percent apr card. I applied for a United Gateway card last year, and it's 0 percent apr for the first year. The card has no annual fees, and I'm making interest off of United's and Chase's money. On top of that, I'm earning miles. I should note that I'm someone with good impulse control. I only spend within my means. When the "big bill" comes due at the end of this year, I'll have no problem paying it off in full.
Try buying an airline ticket in Canada, we are getting royally gouged. Our two airlines, air canada and westjet have to keep buying new calculators to total their massive profits.
It's going to stay like that until you force your government to liberalise the aviation market.
Thank you, I’m looking forward to this week’s video. Thanks for the great work
What about airlines like Allegiant? They seem to make money even without credit card loyalty.
Actually, the bottom line, which this video also supports the data, is that the entire financial situation of the entire world is about to crash in a death spiral 😳😳😳
I think you're right and I agree that the government shouldn't be bailing out businesses. Businesses should fly or flop on their own accord. If they employed 100,000 people and die, so be it, it's not the government's job to step in and 'save' everybody. As always, thanks for sharing.
$4500/month for a small apartment. Holy geez. Me, sitting in my modest 1200sqft suburban home at $800/month.
Where??
@@jasonvoyles1113 Just outside of Kansas City, MO.
Corrected title: "Former Airline Passengers About to See America First Through the Windshields of Their Cars."
Not at a 300 mile range of your new Electric Car.
@@charlesyork680 Given that, out of 280 million cars on the road in the USA, only THREE PERCENT are electric, I don't see that as a serious problem. My current pickup truck has a 400- to 500-mile range per fill-up, depending on terrain and my skill at hypermiling on any given day (22mpg factory-fresh but I've had it up as high as 26mpg). My next truck will be a plug-in gas-electric hybrid with far more spectacular range and mileage numbers. I'll get my kicks on Route 66!
@@colormedubious4747 Hybrid is not what I called out. But when California has a plan to be rid of ICE in 10years, you wont be seeing Route66 in a car. By the way in my truck 3/4ton Ram. Im happy to get 12mpg, but I pull a decent size trailer when I travel.
@@charlesyork680 I know it wasn't. I was making a broader point. Why should I give a hot, steamy fart how California chooses to shoot itself in the crank? I don't live there and never will.
I really wish he would stick to what he knows. When he strays away from his area of expertise, it's sad.
If there is one thing I tried to stress with my children, it's NOT to get into credit card debt. I got caught in the trap when I was young but learned my lesson and for the last 30+ years I have not had any credit card debt. I use them sure, but I pay the balance every month and I am retired. It's just a matter of discipline and learning to save money every month so you can pay cash for things you want or need. Not airline related...well not really, but a very important and good video. Well done !!
This is very relevant to the video, since Kelsea argues that people defaulting on their credit cards will decrease the number of people who will be accepted to these credit card programs. To me it just sounds like Kelsea doesn't think credit cards as a concept are sustainable.
@@wearytrader535 I think as a concept they are not a bad thing, but the entire purpose of credit cards is to increase debt past the point where it can be easily paid off without incurring interest. Credit card companies do nothing unless it somehow, directly or indirectly, achieves that goal. Period. Cash back programs included.
I knew the ticket prices were artificially low, but I had no idea where/how they were making it up. WOW! Thanks for the heads up. Yikes! I say that as a tax payer...too big to fail....been there, done that :-(
Good morning fave 😊 Just saying hi while the ad plays. Always look forward to every other Sunday. See you in Osh ❤️
The corporate world --> lobbyists --> career politicians --> taxpayers getting screwed!! They'll keep doing what they're doing until they're held accountable!!
They got to come up with something that is more sustainable. All these business models have to change
I love how you say that costs have risen a lot. I recently moved and have been going through some boxes that I had in a storage unit. I found a few pay stubs from 2011. I actuallly made MORE then than I'm making now. I'm still in the same field for which I have a college degree to be able to work in so it's not because I changed jobs to do something else.
Thanks, Captain! Very nicely explained. Personally, I think it may be a good thing though. Flying has become a horrible experience, it’s uncomfortable, unreliable and the employees treat passengers with contempt. Upon witnessing a lot of passengers behavior, it’s hard to blame the employees but the cycle seems to feed itself. Flying used to be fun and enjoyable but those days seem to be gone. Maybe increased prices will bring some respect back to the industry. Even if it takes me longer to save up enough for a flight, at least it will seem worth it in the end because right now, even if I only spent $137 I still feel ripped off.
Those loses have actually become part of the business model - airlines have found there's MASSIVELY more profit in the banking industry and so are running the flights at a loss to lure as many people as possible into their loyalty credit cards which they make an absolute fortune on
I wish the video was more accurate. The rate of unemployment is probably the most watched economic indicator in a developed economy, is not really something that can be influenced by whom forgot or not to apply for unemployment. So fostering this concept in a video with the goal of making easier to sell the larger concept doesn help the greater credibility of it . While I don’t disagree with the disdain that generates a broken business model where great profit and bonuses alternate with government bail outs , the role of the credit card business and well as the likelihood that default rates and a ‘greater’ unemployment rate will generate the castle to crumble and foster the next bailout is speculative at best. Both delinquency rates and debts are highly watched and the video ignores a significant fact . Delinquency rates going higher does indicate a weakening of the spending power but is many occasions drives also profit margins of the credit card companies as the non delinquent debt also racks up higher interest rates. Credit cards are a growing business for them but not necessary the culprit of all issues . Airlines have been historically more reckless by not hedging their fuel cost, doing mergers that reduce competition etc. They certainly do a lot to be hated and I do agree that prices ( adjusted for inflation ) remain low especially for anyone planning ahead . Still there no “secret” losing money and the credit card roles is one of many additional revenue streams they have had over the years .
Spirit and the regionals have trouble selling credit cards. The usability of points to travel is limited on a small airline and these days, where we all struggle with poor service , additional fees for everything, cancellations and reboookings, while still wanting to travel a lot . Big airlines credit card give points and status that helps alleviate the struggles of modern travelling .
Love the channel BTW. Not trying to be a smart*as just think the issue is very complex and the video ended up with an oversimplification that makes it shallow
The fastest way to become a millionaire:
1) Be a billionaire
2) Buy an airline
How do you keep the front wheel on the line all the time specially during takeoff
Kelsey's straight savage on the simps today. 😂
Question is, besides food, does Kelsey have another addiction?
edit: grammar
@@CheezeCracker free breakfast and sunscreen
Spreadsheets and Edgar
$137 from BOS-LAX is 100% possible - I'm based in Boston, and professionally managing travel is one of my responsibilities. I book flights for the CEO, his direct reports, my team and myself and it's low key the best transferable skill from my current job. I can get to Chicago for less than a grocery run at the Medford Wegmans, I could get to Europe for less than a steak dinner at a mom & pop restaurant. It is easily cheaper to fly somewhere than it is to buy groceries, and I've been wondering how on Earth that's been possible for years.
Can you share some advice?
Tell me how!
So why is it so expensive to fly to Japan?. So Boston to LA is 150 bucks and thats 3000 miles. So shouldn't Japan (6700 miles) be somewhere around 4-500 dollars? Because it's 1600-2200 on Google flights.
@@Foxxnioxx most of my advice, considering before this was my job I was a somewhat broke college student & recent grad that had to convince even broker college or recent grad friends, the first thing I would say is the Tue/Wed/Thu travel dates are by far the easiest way to save money, everything else is a myth it does not matter which day you book the flight, it’s all about the date and day of the flight.
For domestic flights book one way, the prices do not change, it won’t save you money to book round trip. For International flights round trip is the best way to save costs.
For all flights If you can’t book 6-weeks out, wait until it’s 2 or 3 days before you want to go somewhere, at that point the traditional airlines sell seats at the lowest possible cost, often hundreds lower than budget carriers, because they do not want to send an empty plane anywhere - unless you’ve got an incredible trust fund this doesn’t work for international trips, but boy oh boy does it work for weekend getaways, I’ve booked getaways on a Friday morning on my way into work for a 7am flight on Saturday morning at least 9 or 10 times, and it cost less than groceries. So I made a hot pocket for dinner and had myself a mini vacation instead of a normal weekend.
If possible book last minute flights with points, it’s like a turbocharged version of the cash rate mentioned above, and most airlines will let you buy points. I helped a close friend of mine who had to go home last minute due to a family emergency, her grandma was on her last day on earth, I booked my friend a direct flight to Cleveland at 9pm for a 6am next day departure for about 4,700 miles on American, it would have cost $350 cash, and AA gave me 8,000 miles because a flight I was on was delayed for a few hours. My friend made it back in time to say goodbye to her grandma and spend the last few hours with her & her family.
@@dandunn5760 because 1 fuel, 2, the Pacific Ocean is HUGE, 3. International taxes and tariffs. Flying to Hawaii from the east coast isn’t that expensive ($750 or so in economy) but Japan? That’s easily $1900
The problem with secretly being a bank is that you’re subject to two different but linked sources of risk.
The only issue I have with this, is we forget in the US, that we are the only country in the world who operates airlines like we do. Look around the world, most countries have one national airline, sometimes a second low cost airline. How many airlines do we have? That means we need to allow them to fail, allow supply and demand, and capitalism do exactly what it is designed to do. If you operate in a way that is unsustainable, you fail. If you charge too much and lose customers, you fail. We let it happen with other sectors of the economy, why should the airlines get some free pass or exemption?
Business class tickets to Europe and South America are up an average of 30%~70% on the legacy carriers!!
Specifically, business class tickets between Miami to Buenos Aires used to cost between $2200~$2500, today they’re between $3500~$4200 on AA!
Its always a good day when this guy uploads
Facts! 🤗
@@valleyjayeAnd I definitely press the like button when he posts!!
Airlines are just very elaborate credit card companies.
In the end, you either go bankrupt or live long enough to become a consumer creditor.
So- low airfares are being subsidized by profits from credit-card interest payments paid by those who have been lured -or have the poor judgment to- live beyond their means, and a reduction of this subsidy would mean that airfares would rise to a level closer to the airline's actual cost.
The fact is, the economy and business is mostly a house of cards these days.
Brilliant analysis. Perfect trade idea here for anyone who does trading.
74 Gear... Making aviation even better...#1
Good grief. Why would anyone not pay off their entire CC balance every billing cycle? Makes no financial sense at all, unless you had some kind of medical emergency or car breakdown. Live within your means folks!
Most smart people who have self-control dont put more on their CC than they can pay off in a billing period. Consistently carrying a balance is stupid, why would you give these shitty CC companies free money?
Some pay minimum, makes my brain sizzle
Right. Your furnace may break or your car may need unexpected extensive repairs. Most people can't pay that out of pocket, even if they're savvy enough to pay all their normal bills fully and on time every month. You may be able to get a low- or no-interest loan, but not always. In that case, I'd take the hit on the high yearly interest for a few months--pay as much as I can each month. Hasn't happened to me yet, though. I've managed to avoid CC interest for a long time.
Nobody does
@@joesterling4299 Get a home equity loan if your furnace breaks. CC interest is north of 25%. Even a bad HELOC comes in under 10%
Unemployment is low because people need 2 jobs just to get by
🤣
That's Bidenomics for ya!
Obamanomics was the same.
He was the Food Stamp president.
need to look at the job participation rate (people who no longer qualify to be counted as "unemployed" and gave up looking) which is near an all time low
That makes no sense. The unemployment rate does not care if you have 1 or 2 jobs
The monthly jobs report does, though, which has been used as a measure of economic strength
The US is so weird. I've never even heard of an 'airline credit card' and I don't understand why anyone would want one
For frequent flyers, it makes sense. Especially for long haul flights. They have these cards with European and Gulf airlines as well.
It's just the U.S. is hyper capitalistic and will try to push and make money with everything. You get nowhere near the level of rewards and benefits outside the U.S. Due to the regulations for these credit card providers being more stringent and less predatory for customers.
SO they've based their entire business model on credit cards???? That seems like a bad choice
I fly a lot for work and I’m
a) constantly annoyed that the flight attendants spend so much time trying to get passengers to take and sign up for their credit cards
b) blown away at how many people actually take those applications on the plane
Insane
I'm one of those naughty people who signed up for a United credit card after a flight. I'll explain. Until I read the "literature" in my seat's back pocket, I didn't know that United had a credit card tier with no annual fee. I only use my new United card at places where you get double points (like when paying for gas), and during promotions where you can earn bonus miles. Otherwise, I use my regular cash back credit card from my bank. I fly with United at least a couple times a year. Airline credit cards are useful if you are somewhat loyal to a particular airline. I also fly frequently on Southwest, but I haven't signed up for any of their credit cards, because all theirs have an annual fee.
I just took an application on a Hawaiian flight. I'm in for the bonus miles. I never carry a balance.
@@unhandled12345 I do the same. Paid off each month and rack up the miles. You and I are not who the airlines are truly targeting. Haha.
I would take a no-fee card ... but there are very, very few with good perks. The card companies lose money on me; I pay the card off every month.
Honestly Kelsey, as an economics enthusiast, I was surprised at the quality of this video. You know the empire is crumbling when the President's chief financial advisor admits in an interview that he doesn't know what bonds are or how central banks work, the country's preeminent Nobel economist is an arm's length state propagandist whose salary depends on his ability to pretend that he doesn't know he's lying, and we're getting solid, sober, concise industry-targetted financial analysis from a freight transport pilot on UA-cam.
May your Hayek let you see the _hordes_ of working poors, a dire problem created by the top capital and their cronies at the right places, not by any Keynesian looney
Hayek price signals, worthy of that Oslo award
I love your videos because they are just basically roast compilations hidden in funny and useful content 😂😂😂
Whoa! How do you know about my onlyfans spending? 😮
If the quality of flyers is going down, the prices are probably going down
I woke up before 9:00 a.m. today, so I just sit refreshing, waiting for Kelsey's video. Have a great day, everyone. Thank you!
Guilty as well!
Really cool to see you branch out into a different theme on the channel and still keep it aviation related!
Hanging out with the chickens in Little Havana
74, what do you think about the mother that was kicked off the United flight for "misgendering" one of the stewards?
That's bullshit
No bailouts for corporations that have been doing stock buybacks in the last 2 years. They should be building up a rainy day fund.
What happened at 3:02 👀
Premier is missing a file