Lower Fuel Prices May Not Translate to Cheaper Airfares
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iStock/Thinkstock(NEW YORK) — With crude oil prices sliding and the price of gasoline and jet fuel plummeting, will airfares follow suit and drop? Not necessarily.
Last week, the International Air Transport Association said it expected airline ticket prices to drop.
But now, a domestic airline industry group, Airlines for America, says passengers will benefit from airlines re-investing and improving their business and services, and rewarding employees and investors.
“Declining fuel prices are good news for everyone as they lower personal costs and enable industries such as airlines that rely heavily on fuel to reinvest in their business and their customers,” Airlines for America said in a statement Sunday. “Carriers continue to use improving finances to pay down the nearly $72 billion they are carrying in debt, acquire new aircraft, improve the onboard product, enhance airport facilities and amenities, reward employees through profit sharing and provide dividends to investors.”
“Customers also are benefiting from additional air service options and airlines are adding nearly 4 percent more seats to the marketplace for the coming spring period (more than 100,000 seats year over year) to accommodate growing demand for travel,” the group added.
Airlines for America noted that carriers should be treated like any other business, using Starbucks as an example.
“When the price of coffee beans falls, no one asks Starbucks why his or her latte does not cost less. You want Starbucks to expand its stores and products, give back to its baristas and reward investors. Airlines are no different,” it said.
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