All Fueled Up with Higher Airfares

I have mentioned the skyrocketing fuel costs for some time now. A year ago, it would have seemed obscene to talk about a barrel of crude oil being $100 a barrel. And now it has surpassed that.

I was watching the news this past week that commented on some of the latest consumer index trends. One of them was a decrease in use of oil. For a lot of people, the extra costs now on gas are too much for them to budget for. So one could imagine what that would look like for airlines. Of course it isn't great when prices on airline tickets go up, but certainly it can't be seen as that big of a surprise as the cost of fuel has soared and surpassed any record prices that existed before.

The reality is, for larger airlines, every time a barrel of crude goes up by $1, you are talking about millions of dollars in extra costs for an airline. It is the simple truth. The cost is passed along somewhere - from laying off employees, buying more fuel-efficient aircraft, and increasing the cost of tickets. I don't think it's just going to be a trend, it will continue as long as fuel costs remain exhorbitantly high.

The airlines have responded by starting to increase airfares by as much as $50. United Airlines and JetBlue among them. This brief article from the Washington Post reports on the other airlines that are joining in on increasing airfares.



image courtesy of Arlene Fleming