In a perfect world, that would work great. But as an industry, airline tickets have what economists call "price-demand inelasticity". Operating costs rise for all airlines as oil prices increase, yes. But historically, the airlines have not had the ability to raise their prices enough to make up for higher oil prices.

Two reasons:

1. As airlines try to raise their ticket prices, one or two of the airlines -- either legacy or LCC -- will hold out, and the ticket prices come back down

2. Consumers have become conditioned to low airfares, and as ticket prices rise, demand falls off faster than ticket prices rise, and the result is a net loss in revenue.

Now in the last few months, the airlines have shown some ability to raise ticket prices and make it stick. Maybe they've gotten smarter.

http://www.msnbc.msn.com/id/21677016/

Will the airlines be able to raise ticket prices enough to make up for the jump in oil prices? We'll see. Let's hope so. But it ain't automatic.

 

Yes you can Francis. That's exactly what they do.

Average fair in the US from top 100 airports:
2004(2nd quarter)=$309.75
with 56,981,560 pax
2007(2nd quarter)=$326.22
with 64,914,490 pax
Better get on the phone and tell the airlines, who are starting to make record profits btw, that they can't do it. I'm not saying it doesn't make any difference. However it's not the apocalyptic event some of you try to make it out to be. Currently supply is far beneath demand and the mainlines have no problems keeping their seats full. People flying non mainline routes and aren't part of alliances will feel the burn long before the rest. Point to point operators are the ones most at risk when prices are higher. The majors have the luxury of using their hubs.

 

I do not think fuel prices will matter that much…I am sure they locked their prices in $60 to $70 range. I think hiring will depend on how many pilots are hired by majors and with high barrel prices so high I think many more people will air travel vs drive, giving airlines impression they will need to hire more !!!?!!!

 

Negatory. Most of the majors have only about 30-40% of their 2007 and 2008 fuel supply hedged. The rest is bought on the spot market. And if they want to roll the dice, any future hedges will have to be locked in at current levels.

I saw two oil industry analysts argue about the direction of crude prices. One said he thought it will collapse to below $75, the other thought it would keep climbing to $150. It just goes to show that not even "experts" know what's going to happen.

'Course if there's a recession, oil prices will fall, but the bad news is, then there's a recession (duh!).

 

Maybe I watch too much tv, but I think if it goes above $150 a barrel, we'll have more to worry about than our airline jobs, we may be rioting for blankets and firewood for our families

 

No, at $150 we will have burka's to keep our families warm.

 

fuel prices can be easily coverd by raising the price of the ticket by a meger 10-15 dollars per pax. the thing is at some point EVERY AIRLINE will have to do it. everyone that has hedged the oil up will one day lose that and will face the same music everyone else has to. if there is one thing the airlines can actually do good it is agree when to raise the price, and do it at the same time.

http://www.forbes.com/markets/feeds/...fx4328686.html

http://www.guardian.co.uk/business/2...d=networkfront

http://www.abcnews.go.com/Business/P...ory?id=3838837

http://www.rttnews.com/sp/todaystop....&item=55&vid=0

all over the world the ticket prices are going up, and we still have record number of people flying. even southwest is raising their prices.

if anything i tend to agree with tone, to a certain extent. although not to the extreme of rioting in the streets for firewood.

 

oil price will go down when things with Iraq, Iran, and Venezuela calm down. There is 1000 million lb of oil for free spilled in black sea. GOT OIL?

 

Not sure about that! First you have the "sweet Nigerian crude" that produces the lowest percentage of sulfur when it's refined. Second, you have the Saudi's, followed by the Russians (Soviets), then bringing up the rear would be the Venezuelan oil which produces the highest percentage of sulfur when refined.

Not exactly sure if "OPEC", as we knew it, is as viable and influential as they were in the latter part of last century. The question we should be asking is which oil producing country do we buy most of our foreign oil from.




atp

 

Just got a call from a friend who says TSA is hiring 20 a month through at least October.