Are Airlines Price Gouging Ahead Of Hurricane Irma?

Hurricane Irma is bearing down on Florida, having already laid waste to parts of the Caribbean including St. Maarten and Barbuda, among other islands. The projected track can be somewhat uncertain as models are having a hard time converging on a solution. But it now seems that some part of Florida — either the east side or the west side — will be impacted as it roars up the coast.

And that’s the trouble with evacuating from south Florida. It can be tricky to get out of the path of a hurricane when you are on a peninsula that is hundreds of miles long. My friend Susan who lives near Homestead, recently posted that the projected track of Irma “includes her house, her primary evacuation route, and her backup route.” This is markedly different than evacuating from the Texas coast where you have roughly 180 degrees of freedom to choose from when selecting your escape vector. In Florida, everyone wants to go north.

Lots of folks will drive, of course, but flying out is also an option. That is, if you can find a flight that both has seats available, and which you can afford.

The affordability issue is problematic. Airlines prefer to use ticket prices to balance supply and demand. I mean, we live in a capitalistic society after all, and the US airlines are private for-profit enterprises. So the question becomes, is it reasonable for them to jack up prices ahead of an emergency so as to maximize their profits?

Are airlines price gouging ahead of Hurricane Irma?

I decided to explore the topic after seeing this on Twitter.

Supposedly United was charging around $7,000 for a round-trip from Miami to Denver ahead of the storm. Now to be fair, I tried to replicate this and can’t, as did a few others. Most of the flights are sold out now, so I don’t think it can proven one way or the other. United barely serves Miami, after all, so they just don’t have that much capacity. There’s also the fact that United has been mucking with their pricing algorithms lately. All that said, I don’t doubt her finding, I just can’t replicate it.

So I decided to take a quick look around at airfares for those wanting to evacuate from central and south Florida.

United has a significant presence in Orlando. And they are making the most of it. I found tickets to Denver starting at $1,300.  But hey, at least they aren’t in basic economy.

Or if you want to trade Irma for Harvey, you can go to Houston for $1,250 on United. That big front seat on Spirit at $175 + $40 might look pretty good.

Here’s a head-to-head comparison between United and American on their Orlando to Chicago route.

American certainly seems to be taking advantage of the opportunity.

On the other hand, Delta has some fares that look normal-ish for last minute tickets.

Look for award tickets to use your miles

I know this won’t be helpful to everyone, but my suggestion would be to look for award tickets out of Florida. One of the better aspects of American — which Ben failed to mention yesterday — is that they still have AAnytime Awards at 20,000 miles, which is generally lower than United and Delta. I found flights from Miami to Charlotte available, as well as Fort Lauderdale to Dallas.

Bottom line

It certainly appears that the airlines are charging more than usual for their flights out of Florida, even allowing for the fact that we are looking at last-minute tickets. They may or may not be charging $3,500 for a one-way flight, but fares are certainly approaching half of that. I don’t think that’s typical.

I have mixed feelings about this. Obviously there are a limited number of seats available out of south and central Florida, an almost insignificant number compared to the number of people trying to leave the area. But is it really right for airlines to take advantage of the situation to make a buck and sell their seats to the highest bidder? Should only those who can afford a king’s ransom be allowed to fly out of the state while everyone else clogs the highways? Or worse, is forced to shelter in place?

I don’t have the answers. But as I get older, I start to ask more and more questions…

How do you feel about airlines jacking up the prices as people are trying to flee natural disasters?

Comments

  1. Maybe the intention isn’t really to sell those seats, but to leave the inventory open for IRROPS (since I doubt there is a way to zero them out to new sales but leave them open for people to switch current bookings to.)

  2. jesus F’-ing christ. These people really don’t know jack about fares and inventory buckets work.

    The reps (of all airlines) and probably re-booking so many passengers that most flights only have full Y inventory left. And that’s unfortunately how the pricing engines will match against the published fares.

    Cindi should consider using her brain instead of being an online bully.

  3. @Chris – That actually makes a lot of sense.

    Also, unless United deleted that fare, I don’t see how a ticket could be pricing that high. ExpertFlyer is listing Y and F fares for those dates at around $3k round trip.

  4. Going with Chris here. We’ve all seen “random” $5000 economy tickets on flights we know the airline isn’t actually trying to sell, but has posted for other reasons. Finding a $6K r/t when the flight back owuld mean flying into a hurricane doesn’t seem like it absolutely *must* be price gouging.

  5. Meanwhile Air Transat ferried out 5 planes out of YUL this morning and more from YYZ to pick up passengers (at no extra cost) who were vacationing in the Dominican Republic. Mind you, they do lose the rest of their vacation. Can’t imagine it would be nice to lay on the beach with debris all around.

  6. I am presently in Palm Beach Florida. Although we live in Manhattan we also have a place here and go back and forth with frequency. We had two first class tickets booked to return to NYC on Delta for Saturday. The Storm is starting on Saturday so we thought it best to leave early and wound up having to purchase NEW tickets – on Jet Blue for tomorrow since Delta would not allow changes or cancelations due to the storm until this morning. MEANWHILE the prices of the tickets are skyrocketing.
    Jet Blue was extremely dishonest in its $99 cap press release. Of course now that there are no flights out – the $99 applies to any seats on Saturday or Sunday. Of course you are taking a very high risk that the flights won’t get canceled since the storm is coming in on Saturday. I think this is a shame that both political parties allow these airlines to do what they want while they worry about people price gouging on a bottle of water. It’s absurd.

    We did have Delta credit us with our original flights this morning.

  7. @Chris and @Henry certainly could be on to something, but I would also note that a lot of economists think the moral norm against “price gouging” is actually harmful — and discourages companies from undertaking additional costs to try to help people during a disaster. A post on this from a well-known economist blogger is copied below.

    The basic issue is this: If you criticize companies for “price gouging” during a natural disaster, then national brands will avoid criticism by simply opering their normal service at the normal price–even though necessary services of course immediately sell out. Wal-Mart runs out of bottled water and gas, as some people hoard these things by buying more than they need; airlines sell out of seats. And then people are just stuck and can’t get what they need. If you let them price gouge — indeed, encouraged it — then Wal-Mart and United would be willing to incur additional costs to divert supplies to the affected region, so people could get bottled water and airline seats and whatever else they need to deal with the crisis — albeit at a somewhat higher price. If United were told that they could charge double or triple what they normally would, suddenly it might be worth their while to cancel mostly empty flights in other regions of the country and send a bunch of 777s to Florida to get as many people out as they could before the storm hits.

    Of course, as it is, in disaster-prone areas, no business with a national reputation to protect like United or Wal-Mart will intentionally price gouge. They know they’ll get criticized so they don’t even try. Instead, things are just sold out, and they really have no incentive to do anything but sell what limited inventories they have at the normal price, to avoid criticism.

    So, people who are complaining about price gouging are making the disaster worse, not better.

    Source: http://marginalrevolution.com/marginalrevolution/2017/09/social-media-making-price-gouging-difficult-days.html

  8. exactly …. the jetblue “cap” is close to useless …. what’s the point of ultra-low evac fares RIGHT on the day the hurricane is scheduled to arrive ?

  9. I’ve seen a couple “news” stories on this. I haven’t been able to replicate some of these and when I have come close it’s because it’s a walk-up type fare to an odd location or route like Miami-Hartford. I don’t think the airlines are organized enough to pull this off it seems like it would be more just a factor of IT issues and demand causing the price to spike.

  10. The closer to the arrival date the less seats will be fir Sale ,

    Today I see no gouging,

    Southwest out of Lauderdale will give you a decent price,

    Be flexible.,

  11. We actually want markets free to set prices here. What these people need is transportation – you can’t ride good intentions. High market prices will induce more people to flood in to help. The high prices will harness their self interest to help people move. If prices were regulated, people would stay home and watch the opening of the football season.

  12. The thing is, if the airlines want to price gouge, that’s fine. However, I better not see any emails or press releases from them after the hurricane hits asking for customers to donate cash or miles to help the victims.

  13. I live in Jacksonville, Fl and our roads are fully packed (Jacksonville is in the north of FL). We too are evacuating and the prices here are huge ( We fly out of Orlando as my Father lives there). Hope we can find a (cheap) flight.

  14. @ Travis — We flew our nephew out of S. Florida yesterday on a few hours notice using AA miles. We paid 20,000 miles one-way FLL-CLT nonstop. It took lots of work to get that seat, but excluding labor cost, we got a great price! For comparison, Delta wanted 45,000 miles one way MIA-ATL-CLT. No surprise since Delta is run by greedy executives who have stolen the mileage balances of their long-term loyaly customers through massive serial no-notice devaluations. Shame on Delta.

  15. From above, United MCO-ORD one-way Economy – $660. I went to ORD last September about the same time, my cost? MCO-ORD round-trip First Class – $450.

  16. Not surprised by those airlines doing that, cmon people, they charge all kinds of fees whichever and whenever they can. So you expect them to not act to it when they are given the opportunities to make more money?

  17. This discussion reminds me of comments in May 2015 after the fatal Amtrak derailment in Philadelphia that shut down the North East Corridor. Folks started to notice absurdly high fares (1-2K) for a one-way shuttle flight to/from DC.

    Someone posited that the flights were already sold out but the fare computation software was built to offer someone a horrendously overpriced ticket which if accepted the proceeds would then be used to pay to bump passengers who had already had tickets.

  18. What is the alternative? “High price” means that those with the means can fly. There is something non-equalitarian about this in that all people should have a right to the “lifeboat” regardless of their economic position. So, what about a non-demand influenced price that is satisfied on a “first come, first served”? That seems fair, doesn’t it? But what about need? For example, the middle-class family of four versus the single unemployed mother versus the 80 year-old couple living on social security. Who has a greater need to escape the storm? It is a messy issue and I understand that airlines are in a very difficult position dealing with people who need a miracle for the least cost. The reality is the most vulnerable and the least prepared are going to be the ones who will suffer the most.

  19. Very happy with American. This is the reason one collects miles (which cost nothing)…. so, last minute heading from MIA-CUN… could not have been a better experience….. in LOVE with AA

  20. Next will be the story about people complaining about Uber surge pricing during the middle of the storm. Econ 101 should be a required high school course.

  21. Some of the comments on here are sickening!!!
    Business (MONEY) first and human life second!
    The bottom line is that PEOPLE need to get out of the path of this very dangerous storm!!!
    This should be about saving lives, not how much money we can make.
    At a reasonable price every Airline, Train and bus company will sell every ticket they have, is that not enough?????
    Why do we allow this in a time of Need… It should’t be a time of Greed.

  22. Supply and demand my friend. Even if the flights were cheaper, they would still be full. Flying isn’t a right. People need to pay for it. If they can’t afford it, tough.

  23. Actually Jet Blue capped all flights at $99.00, Delta at $399.00 and they are not charging for baggage or pets. I just did a business class ticket today from Miami to LAX for $396.00 roundtrip.

    The only airline behaving badly is United

Leave a Reply

Your email address will not be published. Required fields are marked *