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Gas Pump Prices and the Cost of Your Airline Ticket

Gas Pump Prices and Cost of Airfare

If you haven’t seen my latest “Airfare Expert” column in USA Today, I’ll give you the brief version now (but do take a look at the column if possible, for the unique graphics).

Why does airfare cost so much these days?

Airfare costs are route specific and fluctuate according to numerous factors like competition or lack of same (think of mergers, like the recent Southwest/AirTran deal), and the rising cost of oil.

Jet fuel remains the top expense for airlines today; it’s risen from about 20% of a carrier’s expenses to close to 40%.

However, it wouldn’t surprise me in the least to learn of plans for several start-up airlines which are in abeyance until the price of jet fuel drops, possibly until oil comes down the about $70 per barrel (which sure would be nice).

What does airline seating capacity have to do with higher prices?

In recent years, airlines cut capacity dramatically, which is why it’s so rare to find an empty seat next to you. And of course, fewer empty seats helps keep prices up – supply and demand.

How frequently do airlines raise their airfare?

So far this year there have been 12 attempts at raising airfare prices, and seven of those attempts were successful. You can be sure they’ll try again. And again.

Sounds like pretty soon, only the wealthy will be able to afford to fly, right?

Not a chance; the airlines have to keep their planes full to make any money (or to avoid losing money), and when they can’t fill their planes, the discounts will come. In the meantime, smart shopper must sign up for FareCompare Airfare Alerts - to be among the first to know when deals are available.

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