Daily Archives: October 9, 2008

Oil Prices Down, Airfares Not

The Associated Press recently asked and ably answered the following question: Now that oil prices are down, why aren’t airfares?

You could read the whole explanation, which is highly informative. I recommend it.

Or you could read my summary, which is much less informative but quite pithy: Airlines aren’t dropping airfares because they don’t have to. Fares aren’t about costs. They’re about competitive pressure.

I’m not going to complain about airlines keeping fares up. I do believe they need the revenue.

I’m just going to complain about airlines calling their price increases fuel surcharges. If they’re fuel surcharges, they should go down when fuel prices go down.

If they’re not fuel surcharges, they should be called something else. Like fare increases.

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