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Airlines Prices Up Despite Costs Dropping

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airfare-increasesAs the holiday season swings into full motion this week, travelers from across the globe will take flight to visit family and friends. If you’re looking for discounts on airline prices to make the trip, you’ll be looking for a long time as airlines have decided to raise airfare despite dropping costs.

Any airlines biggest expenditure is fuel. With the price of jet fuel down a whopping 18 percent since the summer, many are scratching their heads at the 3 percent airfare increase seen in many of the major airlines across the country. The increase puts the average cost of a domestic flight at $396, which is 2.5 percent higher than the 2013 holiday season.

Even with the questionable hike in flight costs, planes are more packed than ever. A record high 85 percent of seats have been booked so far this year. “If people keep coming and filling the airplanes at this price point, why would they lower the prices,” CEO of BestFares.com Tom Parsons said.

Supply and demand is a clear factor in current fare rates. In the last 10 years, there have been several airline mergers, general unrest in the industry and there are simply fewer airlines and seats on flights for the two million Americans who fly.

In the simplest terms, airlines have no compelling reason to offer lowered airfare rates. Plans will continue to be full, investors want their returns and new planes are on order.

Airlines representatives insist the record profits made from rising airfare go towards improving the customer experience seen in upgraded airport terminals, WiFi systems and new planes. Hard to believe when you’re sitting in seats that seem to be getting smaller on planes that seem even more cramped than ever.

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Shoppers Skipping Black Friday

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Many stores will open their doors early for Black Friday, but that doesn’t mean people are willing to take the bait this year.shoppers-skip-black-friday

A report done by Bankrate.com released Wednesday shows that most Americans are taking a pass on shopping during Black Friday and Cyber Monday this year. According to the report, only 40 percent of Americans are planning to shop on Black Friday while only 28 percent plan do brave the crowds and do their shopping in store. The remainder plan to do their shopping via the Internet.

What’s behind the decision to not show up for what is typically considered the best day of the year for huge discounts on big dollar items and holiday deals? The option to get deals even earlier.

“Traditional Black Friday has a bit of a bad rap to the casual shopper” Bankrate analyst Jeanine Skowronksi explains. She cites the several horror stories that have surfaced in the news and online over the last several years as a likely deterrent “that’s making them inclined to stay away on that particular day.”

Beyond the risk of being trampled by a mob in a Wal-Mart, the extended length of the holiday shopping season also play a large role in consumers avoiding Black Friday. Many retailers have begun offering Black Friday deals as early as November 1st, relieving consumers of the urgency to travel to stores the day after Thanksgiving.

“People have become conditioned to looking for deals and discounts before Black Friday and right after Christmas,” Skowronksi said. “It’s more like the deal will come to them, than they need to be aggressive and get the deal.”

Out of those who plan on spending on Black Friday, Bankrate.com anticipates that 54 percent of Millennials will venture to stores, while only 45 percent of 30 to 49 year olds and 35 percent of 50 to 60 year olds are planning on shopping either in stores or online.

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AT&T Sued Over Throttling Data Speeds

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ftc-sues-att-for-data-throttlingThe Federal Trade Commission has accused the second largest wireless carrier in the country of “throttling” users’ unlimited data plans. The FTC alleges in a law suit filed this week, that AT&T has been selling unlimited plans and then reducing the speed of data heavy users by as much as 80 to 90 percent.

AT&T has been throttling users data speeds since October 2011 and impacts any user who surpasses a data threshold as low as 2 GB in a month. This data threshold can be reached in just seven hours of streaming HD video, according to AT&T’s dedicated data calculator.

The FTC said the throttling has resulted in slower speeds for users on 25 million occasions to the point where speeds were comparable to dial-up Internet. On average, 3.5 million users experienced slowdowns for about 12 days per billing period, which prompted thousands of complaints about the wireless company.

AT&T has responded calling the allegations “baseless” and asserted that throttling was a measure necessary to manage the company’s network resources. “We have been completely transparent with customers since the very beginning,” said AT&T’s general counsel, Wayne Watts. “This program has affected only about 3 percent of our customers, and before any customer is affected, they are also notified by text message.”

It’s one of the FTC’s most aggressive lawsuits for Chairwoman Edith Ramirez, a former corporate lawyer who assumed the position last year. By challenging one of the nation’s largest wireless providers, Ramirez is ruffling feathers with sister agency, the Federal Communications Commission, which typically handles issues with telecommunications despite being a bit too chummy with wireless corporations and often seen as not aggressive enough in regulating the wireless corporations practices.

“AT&T promised it’s customers ‘unlimited’ data, and in many instances, it has failed to deliver on that promise,” Ramirez said. “The issue here is simple: unlimited means unlimited.”

While the FTC is seeking financial damages that could result in AT&T unlimited data users being repaid for having their usage restricted, AT&T is merely telling it’s customers to use their phone’s WiFi capability or switch their data plans if they are unhappy.

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Gas Prices Lowest Since 2010

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gas-prices-lowest-since-2010The average price for gas at pumps across the U.S. is $3.08 per gallon, the lowest average price since late 2010. It’s the first time in four years the average of gas prices has been as low.

Prices fell 18 cents for regular grade gasoline, according to a bi-weekly survey conducted on October 24th. Crude oil prices have dropped due to a surplus in global supply and weak demand over the past few months. Survey publisher and president of Trilby Survey, Trilby Lundberg, cites a plunge in crude oil prices as the reason why we’re seeing some relief at gas stations.

Gas prices have been decreasing steadily in late 2014 and are likely to continue to decline as oil production in the U.S. and internationally are expected to increase. “The crude oil price cash has been passed through by refiners,” Lundberg told Bloomberg News. “Retailers will probably be pressed to pass through at the pump a few more pennies of price-cutting sometime soon.”

For 2014, the highest national average for gas prices hit $3.72 in May and is 29 cents lower than May 2013. Currently, the highest average price was recorded in San Francisco at $3.45 per gallon, while Memphis had the lowest price at $2.73 per gallon.

The U.S economy is likely to gain more than it loses from cheaper oil. Lower prices at gas stations give consumers more disposable income to spend at restaurants and on vacations, in addition to reducing costs for several businesses across the country. Price drops will deliver a welcome lift to American consumers and retailers heading into the 2014 holiday season.

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