I saw my first $4 gallon of gas since 2008 this week, and it’s not a surprise considering all the governmental uncertainty in the oil-producing world. What is surprising is that despite the cost increases, people still get angry when airlines try to raise fares.
This is one time when fare increases are easy to justify, though I would argue that airlines often do more harm than good when they blame fuel prices for fare increases. The problem is that fares rise quickly when oil prices go up, but they don’t come down as quickly when fuel costs drop. It’s that disconnect that makes this whole dance so frustrating for passengers.
But the reality is that the price of fuel isn’t as big of an influence on fares as you might think. It’s more of a scapegoat, and it’s one that’s not used well. In most cases, airlines simply increase fares because they can.
Fares plunged after September 11, and they dropped again when the housing bubble burst and we went into a major recession. Why? Because demand dropped. It’s basic economics. The airlines fly seats around all day, and they need to fill them. If demand goes down, then so do fares to try to get people flying.
Brett Snyder, CNN
