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Lower oil costs and impact on airfares #66026
08/25/2015 10:47 PM
08/25/2015 10:47 PM
Joined: Feb 2010
Posts: 169
Columbia, SC, USA
DandM29212 Offline OP
Traveler
DandM29212  Offline OP
Traveler
Joined: Feb 2010
Posts: 169
Columbia, SC, USA
I understand some might see this as a stupid post, and I'm begging to not get all shot up, but I'd appreciate other traveler's thoughts and opinions on this topic.

As we look at $1.90/gal (and falling fast) gas prices here, one might wonder what impact lower fuel costs will have on 2016 airfares. Said differently, I'm not informed on how far airlines buy fuel futures forward, but one might assume that if futures are 3-6 months forward, then airfares might be somewhat better in the first half of 2016.

Again, I'm not looking for specific forecasts of airfares, but a discussion of the factors that affect airfares (recent mergers, low cost carriers, etc.) and particularly fuel costs.

Any TTOL'ers want to offer up any facts or opinions?

Basically, I'm looking to book an SXM trip in March/April of 2016 and I'm debating with myself if I want to book this far forward.

Thanks for your thoughtful responses in advance.



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Re: Lower oil costs and impact on airfares [Re: DandM29212] #66027
08/25/2015 11:09 PM
08/25/2015 11:09 PM
Joined: Mar 2015
Posts: 24
E
encpirate Offline
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encpirate  Offline
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E
Joined: Mar 2015
Posts: 24
Cannot answer your question because I have the same questions. Hope you receive replies because I am looking to book airfare for May and want to delay as long as possible.

Re: Lower oil costs and impact on airfares [Re: DandM29212] #66028
08/26/2015 01:08 AM
08/26/2015 01:08 AM
Joined: May 2009
Posts: 250
K
KATEONTARIO77 Offline
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KATEONTARIO77  Offline
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K
Joined: May 2009
Posts: 250
Airlines contract fuel months in advance.....kate <img src="http://www.traveltalkonline.com/forums/images/graemlins/canada.gif" alt="" />

Re: Lower oil costs and impact on airfares [Re: KATEONTARIO77] #66029
08/26/2015 01:24 AM
08/26/2015 01:24 AM
Joined: Mar 2009
Posts: 12,059
Auburn, WA
SXMScubaman Offline
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SXMScubaman  Offline
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Joined: Mar 2009
Posts: 12,059
Auburn, WA
$1.90 gal of gas. I wish. We are still at $3.00+ a gallon.

Re: Lower oil costs and impact on airfares [Re: KATEONTARIO77] #66030
08/26/2015 02:38 AM
08/26/2015 02:38 AM
Joined: Nov 2006
Posts: 301
St. Maarten
Terrance Offline
Sponsor
Terrance  Offline
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Joined: Nov 2006
Posts: 301
St. Maarten
I am all for anything that can help us get better air fares.

Getting the best air fares works best if you are flexible when it comes to planning your travel.

Some people say it is best to search for airfares around midnight when most airlines reservation systems release the unsold seats on hold.

Some people even go so far as to use different computers, deleting cookies and wiping their browser history clean when searching for fares on the airline websites. They can track your behaviour, so why wouldn't they do it?

It pays to have an insider who can tell you which flights have the most open seats available. Hint: Without a Travel Agent, you are on your own!

Predicting airfares is a specialty I have not mastered with my 15 years in the business. So sometimes it pays to take the best fares you can get for your particular budget.

In my opinion, low fuel prices will only motivated the airlines to keep their fares up and increase their profits. Finally! Scream their shareholders and investors. It's all about the bottomline nowadays.

Most airlines will watch what their competitors do to see who will make the first move to lower prices as a result of low fuel prices. If no one lowers their air fares first, don't hold your breath, the others won't either. What do you call that? An oligopoly? With all the recent mergers in the airline industry, that's what we have now.

Will that lead to efficiency and effectively lower air fares? I doubt it!


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Re: Lower oil costs and impact on airfares [Re: DandM29212] #66031
08/26/2015 05:34 AM
08/26/2015 05:34 AM
Joined: Mar 2001
Posts: 15,484
Ohio
ruralcarrier Offline
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ruralcarrier  Offline
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Joined: Mar 2001
Posts: 15,484
Ohio
While I agree with you that lower fuel costs SHOULD have a positive impact on airfares, I just don't see it happening.

I base my logic on the FACT that 6+ years ago when we had $4 gas and $140 barrel oil. Using that same formula now that we have sub-$40 barrel oil, gas SHOULD be around $1.20/gallon. Given some increases in taxes and other variables, gas should still be well below $1.50/gallon.

We were at $2.99 gas just a week or so ago and it was blamed on a refinery issue in IN. It is now down to around $2.50.

Airlines do, from what I understand, buy their fuel months ahead. The common sense approach you and many others (including myself) just doesn't seem to apply with fuel and oil prices.

When air gets to a price you can live with, buy it. I am looking for roughly the same time period and the fares have not fluctuated much at all from around $700. This is $100 more than I paid this year and the variation in oil prices has shown NO positive impact.

The number of carriers has consolidated. The number of flights are fewer in many cases and there is no reason the airlines HAVE to or WILL lower fares.


J.D.
Re: Lower oil costs and impact on airfares [Re: DandM29212] #66032
08/26/2015 07:27 AM
08/26/2015 07:27 AM
Joined: Aug 2000
Posts: 1,291
Hershey, Pennsylvania
Tom Offline
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Tom  Offline
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Joined: Aug 2000
Posts: 1,291
Hershey, Pennsylvania
My sister also lives in S.C. and you folks enjoy some of the lowest gas prices in the US. We in PA are at $2.20 right now. To directly respond to your question, it seems that the airlines use higher fuel prices to justify price increases but have chosen, for obvious reasons, not to lower ticket prices when fuel prices go down. As often stated on this forum, "book flights when you find prices acceptable and don't look back".

Re: Lower oil costs and impact on airfares [Re: Tom] #66033
08/26/2015 07:59 AM
08/26/2015 07:59 AM
Joined: Feb 2007
Posts: 3,489
Rhode Island
RonDon Offline
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RonDon  Offline
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Joined: Feb 2007
Posts: 3,489
Rhode Island
You may have an advantage in that you are somewhat close to Charlotte and can get a direct flight to SXM. If you don't care if you have to take separate planes or that you may not get seats together, you may find a great deal closer to the departure date since prices are lowered to fill planes.

We just booked for March direct BOS SXM for $729 rt which is the lowest we've ever paid for early booking and the plane was already 2/3 full. Now the price has risen greatly.

It's always a gamble. Gas is purchased ahead so prices won't affect fares for awhile. You have to decide what you're willing to pay then book. YAPTA.com will monitor prices for you and notify you. When you feel it's good for you, book.

Re: Lower oil costs and impact on airfares [Re: Tom] #66034
08/26/2015 08:05 AM
08/26/2015 08:05 AM
Joined: Jan 2008
Posts: 480
Ohio
rkitek Offline
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rkitek  Offline
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Joined: Jan 2008
Posts: 480
Ohio
I think it has little to do with fuel prices and more to do with the demand to fly. Our last trip was 2010 and crude oil was 2x what it is now. We flew out of ORD for $400 each. For more than a year now, prices have been around $600 for the same time period. It doesn't help there is one less airline creating competition with US Airways being swallowed up.



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Re: Lower oil costs and impact on airfares [Re: DandM29212] #66035
08/26/2015 08:18 AM
08/26/2015 08:18 AM
Joined: Apr 2001
Posts: 12,760
Brookfield, CT.
pat Offline
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pat  Offline
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Joined: Apr 2001
Posts: 12,760
Brookfield, CT.
For the past two weeks I've been listening to news broadcasters speaking of the lower oil prices having a positive effect on lowering the cost of aviation fuel, ergo also lowering airline tickets. And for the same two weeks I've received fare watcher notifications that the seats on our 'watched' flights have increased significantly with each notification.

March/April is a very popular time on the island - regatta, religious holidays and many East coast schools schedule their winter to spring vacations then, too. Seats tend to become more of a premium depending on specific dates and flights.

There is always the chance your airline may run a great sale! Or NOT! But if your flights are filling up......I'd personally follow the sage advice of so many here and choose a fare I was comfortable and book it and be done with it. <img src="http://www.traveltalkonline.com/forums/images/graemlins/handshake.gif" alt="" /> <img src="http://www.traveltalkonline.com/forums/images/graemlins/handshake.gif" alt="" />


Respectfully,

pat



"Always keep your words soft and sweet, just in case you have to eat
them."
Re: Lower oil costs and impact on airfares [Re: RonDon] #66036
08/26/2015 08:33 AM
08/26/2015 08:33 AM
Joined: Oct 2012
Posts: 304
NC, USA
Durathror Offline
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Durathror  Offline
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Posts: 304
NC, USA
Quote
RonDon said:
You may have an advantage in that you are somewhat close to Charlotte and can get a direct flight to SXM.


Those direct flights often cost a premium. Lat I checked, USAir pays me $125/person to fly from RDU to CLT then walk through the terminal to get to the plane to SXM.


There's a small fortune to be made in racing; just start with a large one.
Re: Lower oil costs and impact on airfares [Re: Durathror] #66037
08/26/2015 09:18 AM
08/26/2015 09:18 AM
Joined: Jul 2006
Posts: 12,285
Peaceful Eastern North Carolin...
GaKaye Offline
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GaKaye  Offline
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Posts: 12,285
Peaceful Eastern North Carolin...
Quote
Durathror said:
Those direct flights often cost a premium. Lat I checked, USAir pays me $125/person to fly from RDU to CLT then walk through the terminal to get to the plane to SXM.


For the past three years, we've driven 4 1/2 hours to Charlotte to take advantage of the direct flight. This year, I let my husband talk me into driving 30 minutes to New Bern, and connecting in CLT. Between the flights being less expensive and the savings on gas, hotels, and meals, we're flying first class. Hopefully the connection will be painless.

Re: Lower oil costs and impact on airfares [Re: Durathror] #66038
08/26/2015 09:18 AM
08/26/2015 09:18 AM
Joined: Aug 2000
Posts: 71,595
Central Florida!
Carol_Hill Offline
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Carol_Hill  Offline
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Posts: 71,595
Central Florida!
You are correct. Nonstop flights (not necessarily 'direct', which is not the same as 'nonstop') are definitely more convenient AND almost always more expensive..

As far as cost to fly to SXM in general, as I think someone else said, price is more a matter of competition than costs. The competition will only go DOWN in future, with the merger of US Air and AA, which to me is a very bad thing.


Carol Hill
Re: Lower oil costs and impact on airfares [Re: Carol_Hill] #66039
08/26/2015 12:38 PM
08/26/2015 12:38 PM
Joined: Jan 2011
Posts: 344
Canada
T
Toronto Offline
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Toronto  Offline
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Posts: 344
Canada
I don't know about American airline companies but here in Canada WestJet offers a feature that it will guarantee the lowest flight costs. If you book now and the price goes down you will get the lower cost.

Keep an eye on the flight costs I'm sure they will be up and down several times between now and then.

Re: Lower oil costs and impact on airfares [Re: Toronto] #66040
08/26/2015 12:55 PM
08/26/2015 12:55 PM
Joined: Jan 2008
Posts: 12,906
Ottawa, Ontario, Canada
islandgem Offline
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islandgem  Offline
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Joined: Jan 2008
Posts: 12,906
Ottawa, Ontario, Canada
That is one reason we really like to travel with Westjet! You still have to keep checking the prices though as you only get the lower price if and when you bring it to their attention.




Re: Lower oil costs and impact on airfares [Re: Toronto] #66041
08/26/2015 01:03 PM
08/26/2015 01:03 PM
Joined: Aug 2000
Posts: 71,595
Central Florida!
Carol_Hill Offline
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Carol_Hill  Offline
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Joined: Aug 2000
Posts: 71,595
Central Florida!
It USED to be that Jet Blue would give you a voucher if their price went down. Emphasis on USED to be. Now they are the same as all US companies--you can only get a price reduction if the price goes down by more than the cancellation penalty--which is normally around $100 to $150..


Carol Hill
Re: Lower oil costs and impact on airfares [Re: Toronto] #66042
08/26/2015 01:04 PM
08/26/2015 01:04 PM
Joined: Apr 2001
Posts: 12,760
Brookfield, CT.
pat Offline
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pat  Offline
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Joined: Apr 2001
Posts: 12,760
Brookfield, CT.
Quote
Toronto said:
I don't know about American airline companies but here in Canada WestJet offers a feature that it will guarantee the lowest flight costs. If you book now and the price goes down you will get the lower cost.

Keep an eye on the flight costs I'm sure they will be up and down several times between now and then.


Oh, Canada......

That is now a 'once upon a time' thing for most of the American airline companies these days. There are now restrictions on most - if not all - of them and the lowered airfare has to be hugely lower to be eligible for a refund. And then you have to catch the difference and request it if you're eligible......I'm thinking the fare drop has to be around $150.00 or more per ticket in most carriers.


Respectfully,

pat



"Always keep your words soft and sweet, just in case you have to eat
them."
Re: Lower oil costs and impact on airfares [Re: Carol_Hill] #66043
08/26/2015 01:12 PM
08/26/2015 01:12 PM
Joined: Mar 2009
Posts: 12,059
Auburn, WA
SXMScubaman Offline
Traveler
SXMScubaman  Offline
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Joined: Mar 2009
Posts: 12,059
Auburn, WA
Alaska Air doesn't have a restriction. If the price goes down even two bucks they will credit you towards other flights. All you have to do is call them and it's instantly put in your Alaska Air wallet. My wife just got a seventy dollar credit on her Vegas flight. If it goes down more she'll get more. Yapta keeps her posted.

Re: Lower oil costs and impact on airfares [Re: SXMScubaman] #66044
08/26/2015 01:20 PM
08/26/2015 01:20 PM
Joined: Aug 2000
Posts: 71,595
Central Florida!
Carol_Hill Offline
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Carol_Hill  Offline
Traveler
Joined: Aug 2000
Posts: 71,595
Central Florida!
OK, I wasn't aware there were any US airlines that did that any more... Of course, I don't think they fly anywhere near me.. <img src="http://www.traveltalkonline.com/forums/images/graemlins/Smile.gif" alt="" />


Carol Hill
Re: Lower oil costs and impact on airfares [Re: Carol_Hill] #66045
08/26/2015 02:11 PM
08/26/2015 02:11 PM
Joined: Mar 2009
Posts: 12,059
Auburn, WA
SXMScubaman Offline
Traveler
SXMScubaman  Offline
Traveler
Joined: Mar 2009
Posts: 12,059
Auburn, WA
Alaska has many places they fly into the East coast. MIA, West Palm Beach, Fort Meyer, Fort Lauderdale just to name a few.

Re: Lower oil costs and impact on airfares [Re: SXMScubaman] #66046
08/26/2015 02:27 PM
08/26/2015 02:27 PM
Joined: Oct 2006
Posts: 352
Pittsburgh, PA
gotaluvit Offline
Traveler
gotaluvit  Offline
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Joined: Oct 2006
Posts: 352
Pittsburgh, PA
The reason that airfares don't move in lock step with fuel prices (aside from airline geed, that is) is that most airlines hedge fuel prices to some extent or another. Basically, they bought fuel for 2016 in 2014 or 2015 and are now locked in at relatively high prices. The same should happen in reverse if fuel prices go up but somehow fares seem to go up much faster than they come down...

Re: Lower oil costs and impact on airfares [Re: gotaluvit] #66047
08/26/2015 09:55 PM
08/26/2015 09:55 PM
Joined: Feb 2010
Posts: 169
Columbia, SC, USA
DandM29212 Offline OP
Traveler
DandM29212  Offline OP
Traveler
Joined: Feb 2010
Posts: 169
Columbia, SC, USA
De-regulation forced airline pricing to be extremely cost sensitive, especially to fuel and labor costs.

It seems like several here believe that airlines have finally gotten industry capacity reduced to the point where they can now price as they see fit.

Whether its now or the near future, this is an ominous sign for future air travel. Seems like we're going back to regulated air travel, only its the airlines who are doing the regulating!

Oh well, why worry, right? Let's just go back to the 50's "Que Sera, Sera" or the millenials' "It is what it is".



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Re: Lower oil costs and impact on airfares #66048
08/26/2015 11:10 PM
08/26/2015 11:10 PM
Joined: Jul 2015
Posts: 53
M
Medtech2 Offline
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Medtech2  Offline
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Joined: Jul 2015
Posts: 53
Wow, $1.90 in Cola? Here in Charleston it's still between $2.20 and $2.30. Wonder why the difference?

That said, I wouldn't expect airfare prices to be dropped due to fuel prices. The airlines will just pocket the difference and keep charging what the market will bear...

Re: Lower oil costs and impact on airfares [Re: Medtech2] #66049
08/26/2015 11:49 PM
08/26/2015 11:49 PM
Joined: Jun 2014
Posts: 88
T
thewaterfront Offline
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thewaterfront  Offline
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T
Joined: Jun 2014
Posts: 88
Priced tks. for Dec.on jet blue from nyc....900 to 1100 one way.
Price of fuel 1/2 less then a yr ago.....family of 4 pays 8k round trip?
Gouging? Not only is this a rip for tourists, it discourages travel to SXM,one would think. Some Govts. subsidie fuel costs to encourage tourism. Do they not?

Re: Lower oil costs and impact on airfares [Re: thewaterfront] #66050
08/26/2015 11:53 PM
08/26/2015 11:53 PM
Joined: Aug 2000
Posts: 2,441
MIA
I
irina Offline
Traveler
irina  Offline
Traveler
I
Joined: Aug 2000
Posts: 2,441
MIA
Are you saying the government of SXM should subsidize the fuel cost of your flight to SXM?
Really?
irina? <img src="http://www.traveltalkonline.com/forums/images/graemlins/duh.gif" alt="" />

Re: Lower oil costs and impact on airfares [Re: irina] #66051
08/27/2015 12:48 AM
08/27/2015 12:48 AM
Joined: Jun 2014
Posts: 88
T
thewaterfront Offline
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thewaterfront  Offline
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Joined: Jun 2014
Posts: 88
What I am saying is that, I have heard that to encourage tourism, a Govt. may very well do so. not my tks. in particular or on a permanent basis.
For instance Royal Dutch Shell of Holland could do so,to generate income for tourism on the Dutch Islands. Or Air France a Government owned entity.

Re: Lower oil costs and impact on airfares [Re: Carol_Hill] #66052
08/27/2015 03:23 AM
08/27/2015 03:23 AM
Joined: Dec 2012
Posts: 188
FL
B
bksm Offline
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bksm  Offline
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B
Joined: Dec 2012
Posts: 188
FL
Quote
Carol_Hill said:
OK, I wasn't aware there were any US airlines that did that any more... Of course, I don't think they fly anywhere near me.. <img src="http://www.traveltalkonline.com/forums/images/graemlins/Smile.gif" alt="" />


Southwest is near you and you can request a credit that expires in a year if the fare drops. If you book with points, you get all your points back and then rebook at the lower point total. Hopefully, they will be flying to SXM soon.

Re: Lower oil costs and impact on airfares [Re: bksm] #66053
08/27/2015 09:48 AM
08/27/2015 09:48 AM
Joined: Oct 2006
Posts: 352
Pittsburgh, PA
gotaluvit Offline
Traveler
gotaluvit  Offline
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Joined: Oct 2006
Posts: 352
Pittsburgh, PA
Over the years we have now lost Continental and USAirways and most of United (probably others...Northwest? Eastern?). We picked up Spirit and Jet Blue but I don't think they are major players in SXM. Consolidation is not our friend.

The wild card is Southwest. They are now in the Caribbean and SXM has got to be number 1 or 2 on their list for expansion in the area. They would shake things up for sure.

Re: Lower oil costs and impact on airfares [Re: gotaluvit] #66054
08/29/2015 09:06 PM
08/29/2015 09:06 PM
Joined: Feb 2007
Posts: 391
San Antonio
sumbeach Offline
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sumbeach  Offline
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Joined: Feb 2007
Posts: 391
San Antonio
Looks like several topics have evolved from the original post, which is one of the great things about this forum.

I paid $2.03 for gas this week in San Antonio - the ongoing price around town is $2.39. Amazing how prices can differ so much in small distances. I guess because they can!

Haven't compared dollar costs on flights recently, but we got round trip for two on AA for a total of 50,000 miles, leaving on Sep 8, for almost two weeks. But, we had to change our flights to Sep 27 departure, and the points were the same (I know, hurricane season, etc). I think Carol and a couple others stated there was no change fee with points on AA if you keep the same itinerary - I can also confirm this. We actually got a better flight - originally we had to lay over in MIA for a night on the return, but on our new itinerary we leave SAT at 6:05 AM and get to SXM at 2:00 PM, and depart at 3:00 PM and arrive in SAT at 10:00 PM. Seems we got the only flights I could find with those times. All other AA flights arrive in SXM at around 9:30, and all other returns require an overnight in MIA. So, a good thing for a change. (Now, hopefully all this doesn't change by then).


Dan
Re: Lower oil costs and impact on airfares [Re: Medtech2] #66055
08/30/2015 06:11 AM
08/30/2015 06:11 AM
Joined: Feb 2007
Posts: 3,489
Rhode Island
RonDon Offline
Traveler
RonDon  Offline
Traveler
Joined: Feb 2007
Posts: 3,489
Rhode Island
Quote
Medtech2 said:
Wow, $1.90 in Cola? Here in Charleston it's still between $2.20 and $2.30. Wonder why the difference?

That said, I wouldn't expect airfare prices to be dropped due to fuel prices. The airlines will just pocket the difference and keep charging what the market will bear...


The difference in prices from state to state is due to state gas taxes.

Re: Lower oil costs and impact on airfares [Re: irina] #66056
08/31/2015 08:48 PM
08/31/2015 08:48 PM
Joined: Nov 2006
Posts: 301
St. Maarten
Terrance Offline
Sponsor
Terrance  Offline
Sponsor
Joined: Nov 2006
Posts: 301
St. Maarten
It wouldn't be a bad idea to get a handful of cash from the SXM Government as a welcome gift as soon as you clear immigration at the SXM Airport.


Order your flowers, bouquets and giftbaskets online at www.stmaartenflowers.com.
We will deliver your flowers and gifts to hotels, villas, yachts, hospitals, residences, businesses and universities.
Re: Lower oil costs and impact on airfares [Re: DandM29212] #66057
08/31/2015 09:46 PM
08/31/2015 09:46 PM
Joined: Oct 2002
Posts: 160
Philly
P
PKwx Offline
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PKwx  Offline
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P
Joined: Oct 2002
Posts: 160
Philly
One solution is to be part of the airline greed and buy their stock. Then you get to reap the benefit of their greed all year long. Just saying at $39 a share AAL (American) is at a good correction price.


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