Consumer Confidential: Airfares, chicken prices, car troubles
--Is it getting cheaper to fly? Probably not. But it apparently won't get more expensive. U.S. airlines have started rolling back last month's fare increases, so passengers are likely to pay the same prices even though federal ticket taxes are being collected again. Southwest Airlines says it cut fares back to where they were before July 23, when the taxes expired. A spokesman for Delta Air Lines says his airline matched the move by Southwest and its AirTran Airways subsidiary. Industry observers say they expect other airlines to do the same. If that happens, consumers will pay the same total price instead of seeing increases of around 10% on many tickets for travel within the U.S.
--Chicken prices, on the other hand, are definitely going up. Tyson Foods, one of the big clucks in the poultry field, says high grain prices are here to stay, and the company will price its chicken accordingly. "We simply have to get paid for the value we are providing," Tyson CEO Donnie Smith said in a conference call with investors. Tyson lost $286 million in the fourth quarter of 2008, much of it due to hedging losses. The company has since taken a more conservative approach to buying grain. Tyson and other poultry producers have started to cut back poultry production. Smith would not detail the extent of Tyson's cuts, except to say that they reflect an expected decline in demand this year.
--Safety investigators are taking a close look at Ford Mustangs and Volkswagen Jettas. Possible transmission problems have been reported in some 2011 and 2012 Mustang models and fuel lines in 2011 Jettas. The National Highway Traffic Safety Administration's Office of Defects says it has received 32 complaints about an unexpected inability to shift into gear on Mustangs with manual transmissions. Some reports allege the problem occurred as the cars merged into high-speed traffic. The preliminary investigation involves 26,000 vehicles. Seven complaints alleging leakages from the fuel line to a fuel injector in some Jetta models also have been received. That probe involves about 40,000 vehicles.
-- David Lazarus
Photo: Chicken prices will rise because of soaring grain prices.