The airline executives standing between you and cheap plane tickets
Cheap oil, which this week closed below $50 a barrel for the first time in nearly 6 years, has been a boon for beleaguered motorists who are enjoying lower prices at the pump. But will airfares follow the same downward spiral? The short answer is: Don’t hold your breath.
Jet fuel, airlines’ biggest expense, has fallen by roughly a third over the past year. Meanwhile, airfares have continued to climb, along with airlines’ profits. So what gives? There are several reasons for staying the course on price, according to airline executives: First, airlines that have put big bets on future oil prices say that being locked into those investments doesn’t allow for short-term changes in how they charge customers. Others say there’s no telling what will happen to oil prices in future, and that sudden price changes can hurt airlines long-term. And some say too many consumers are clamoring for plane tickets to justify dropping prices—even when costs are down.
Flying may start to get cheaper in six months or so, when airlines’ fuel investments change, according to one global industry airline association. But you wouldn’t be able to tell from the way airline CEOs are talking.