Thanksgiving Airline Ticket Sales?
Why airfare hasn't come down in price yet, but might soon drop.
Oct. 15, 2008 — -- What a dilemma -- to buy or not to buy a holiday airline ticket.
It shouldn't be so hard: After all, oil is down, so ticket prices are lower, right? Oh, wait, ticket prices are not lower.
But they could be. The thing is, it's been a crazy year. Anything can happen, and it's not over yet.
Look at what we've seen so far: Passengers have endured a torrid pace of airfare hike attempts in the first half of the year -- 21 in all. But then you have to contrast these hikes with the free-falling price of oil over the past three months -- from just under $150 per barrel to $80 per barrel.
Meanwhile, those pesky fuel surcharges imposed by U.S. domestic airlines haven't budged from their highs for travel within the U.S., and international fuel surcharges are just this week starting to slowly retreat:
And, just in case you hadn't noticed, the airlines now find that they've traded an oil crisis for a financial crisis. The difference? People flew during the oil crisis while more and more are sitting out this latest disaster.
In the meantime, fuel surcharges have turned into a bit of a PR disaster for the airlines as lower energy prices have not corresponded to lower ticket prices.
Now, interestingly, several international airlines are beating the PR pants off their U.S. counterparts simply by lowering their fuel surcharges.
Why are U.S. airlines only following suit on competitive international markets at this point?
Well, to hear American Airlines CEO Gerard J. Arpey tell it, we're supposed to be looking at the fabled "big picture" -- a picture that includes the not-so-distant days when the price of oil was killing the carriers.
"Even when airlines were posting profits, they lagged behind other companies in return on investment," Arpey said.
OK, so it's "make that hay while the sun shines" time -- yes, we get it.
