20-30% of airline costs are fuel. Call it 25% for this example.

If oil doubles, then the airline's variable costs increase by 25%.

Can they raise ticket prices by 25%? Sure, they've been all over the map lately and planes are still full.

That large of a bump would scare away some pax for sure. Also other economic problems related to high oil will scare off some more pax.

But over time, could the pax and industry adapt to $200 oil? Sure. Also $200/bbl today is about $150/bbl in 2008. The talking heads seem to conveniently forget inflation when they screech "Highest Oil Ever!". Oil settled at around $120/bbl today.

But it's reasonable to assume that oil would not stay anywhere near $200... prices above $100 will drive exploration and production in places and with technology that's not economically viable at $60. Any airline with hedges can probably ride it out for a while, and might even thrive if their competitors didn't hedge as much (or at all in some cAAses). That's what SWA did last time.