Why Isn't Airfare Going Down?

[SandyinMonterey]

Gas prices in our area have dropped significantly. Usually we're over $4.00/gallon. Today I bought gas for $3.17 and just heard on the local news of a place under $3.00 and it's predicted to keep dropping. So, why hasn't airfare dropped? I've been trolling airfare for some time for a trip early next summer back East to visit family. It hasn't dropped a dollar, in fact, yesterday it went up $11. Airlines don't hesitate to raise airfare when gasoline prices increase, why won't they do the same when gasoline prices decrease? Especially since the decrease is so significant. Profits, profits, profits I guess.

 

[Shelly F - Ohio]

Well because cars use gasoline and planes use jet fuel. Two totally different products. Jet fuel is VERY expensive. My husband is a pilot. Jet fuel is over $6.00 a gallon!

 

[vicki_c]

I read in the paper a week or so ago that airfares are predicted to continue to rise.

 

[stinkpickle]

I think jet fuel is usually purchased on contract, so the airlines don't experience the big price swings...good nor bad.

 

[kaytieeldr]

Most airlines operated at a loss for so long, it's not surprising these publicly traded companies are responding to their respective shareholders' appreciation at the return on investment. Why are posters so negative toward a company being profitable?

 

[DebbieB]

Most airlines operated at a loss for so long, it's not surprising these publicly traded companies are responding to their respective shareholders' appreciation at the return on investment. Why are posters so negative toward a company being profitable?

Because they don't want to pay more. Airfares have gone way up in the past 5 years. I used to pay $200-$250 to Orlando, now it's $300-$350-$400. I think it's due to less competition because of mergers - Delta/Northwest, United/Continental, Southwest/AirTran, American/USAirways.

 

[Tonka's Skipper]

It really has nothing to do with fuel. The airlines have reduced the number of flights/seats to fill the planes and make each flight more profitable.

Prices will go with market conditions, as long as the plane fly mostly full, the prices will not decrease.

AKK


P.S. We are taking Amtrak next year........not really cheaper but a nicer trip.

 

[dis_guy]

Airlines buy their fuel on longer term contracts, so who knows what they're actually paying for it? That's why Southwest could offer cheap fares for so much longer than the others, they locked in their fuel "futures" price and made quite a windfall because of it. Besides airlines do not operate on the belief that they are making "enough" profit. It's all about maximizing returns for their shareholders. So if the planes are full, they'll charge as much as they can for each seat.

 

[Redarrow5150]

It has nothing to do with fuel contracts. You think even if the fuel contracts were revised the airlines would turnaround and lower prices? It's about demand and consolidation in the industry. Prices will go lower when demands lessen.

 

[mikehn]

Demand is what drives airfare. Airfare on Tues, Wed, Thurs are a whole lot less than airfare on Sat and Sun. And it isnt because oil is cheaper on Tues, Wed, and Thurs.

 

[lustergirl]

Because they don't want to pay more. Airfares have gone way up in the past 5 years. I used to pay $200-$250 to Orlando, now it's $300-$350-$400. I think it's due to less competition because of mergers - Delta/Northwest, United/Continental, Southwest/AirTran, American/USAirways.

I agree. Gone are the days that I used to get one way flights to Orlando from Southwest for 69 dollars.

 

[kaytieeldr]

Oh, yeah. I remember those days. I once flew to Orlando for a weekend for $100 rt on Southwest.

 

[bookwormde]

I agree. Gone are the days that I used to get one way flights to Orlando from Southwest for 69 dollars.

I picked up a $59 flight from PHL this year, but they are rare.

SW for a long time was the airline that pushed prices down, but they are now acting more like the legacy airlines so until a new strong upstart airline comes into the market competition will be soft.

Jet fuel prices have fallen to as low as $2.40 on the spot market, of course local FBOs charge a multiple of that for small quantizes.

 

[donkeyandshrek]

In January, we snagged $92/RT to MCO. I typically pay less than $180. Looks like my cut-off point will rise to $250 with SW ;(

 

[mcd2745]

I picked up a $59 flight from PHL this year, but they are rare.

SW for a long time was the airline that pushed prices down, but they are now acting more like the legacy airlines so until a new strong upstart airline comes into the market competition will be soft.

Jet fuel prices have fallen to as low as $2.40 on the spot market, of course local FBOs charge a multiple of that for small quantizes.

Problem is that nowadays it will be very difficult for any start-up to gain any traction because they will not be able to get into a lot airports. The big boys (SW included now) have bought all the slots at most major airports - even with no intention of using many of them - as it keeps competition out and demand up on the flights they do run. Airports presumably can take the slots back and re-sell them if they are not used, but some airlines will even resort to running empty flights occasionally just to hold on to the slots and keep them out of competitors hands.

 

[NancyIL]

Demand is what drives airfare. Airfare on Tues, Wed, Thurs are a whole lot less than airfare on Sat and Sun. And it isnt because oil is cheaper on Tues, Wed, and Thurs.

According to the Wall Street Journal - Saturday and Sunday may have the lowest fares: http://online.wsj.com/articles/the-best-day-to-buy-airline-tickets-1413999377

 

[OrangeCountyCommuter]

According to the Wall Street Journal - Saturday and Sunday may have the lowest fares: http://online.wsj.com/articles/the-best-day-to-buy-airline-tickets-1413999377

I think the "rules" for travel to most of the US don't work for MCO.

But the WSJ article is about buying not flying. In general Monday and Friday tend to be the high cost days since those are business travel heavy days. Weekends are generally cheaper to fly for most of the US.

MCO however has a high volume of leisure travelers who want to arrive on a weekend and leave on a weekend leading to fares on the weekends being just as high as the Monday/Friday fares in many instances.

 

[NancyIL]

I think the "rules" for travel to most of the US don't work for MCO.

But the WSJ article is about buying not flying. In general Monday and Friday tend to be the high cost days since those are business travel heavy days. Weekends are generally cheaper to fly for most of the US.

MCO however has a high volume of leisure travelers who want to arrive on a weekend and leave on a weekend leading to fares on the weekends being just as high as the Monday/Friday fares in many instances.

You're right - I interpreted mikehn's comment as buying and not flying. However, I'm flying to Orlando on a Saturday next month, as it was the same price as on a Tuesday or Wednesday departure on American.

 

[katallo]

In the past, we have noticed rates are higher around release dates. However, BWI has only shown decent rates for flying mid week. The weekends have been terrible. 200 - 300 one way in the spring. Unfortunately, work schedules don't allow us to fly on tuesdays.

 

[Judyat]

A lot of it depends on when you book. If you know far enough out you can get a better deal. And using Southwest if you get a deal and it goes down more you can rebook without a penalty for the lower fare. So I never feel locked in with Southwest. I also notice their fares are lower than other carriers in general. It's crazy what some charge compared to Southwest. We do non-stops in December, January and February to Florida from Long Island and they are less than $110 one way.