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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
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Joined: Mar 2001
Posts: 17,562 Ohio
ruralcarrier
Traveler
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Traveler
Joined: Mar 2001
Posts: 17,562
Ohio
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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.
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