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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.

American Airlines Diets to Save on Fuel Costs

March 16, 2011 | Posted in: Airline News,Fuel Watch | 0 comments

American Airlines Diet to Save Fuel

I got a kick out of a recent story on the Dallas NBC affiliate (and in the interest of full disclosure, I’ve appeared on their news many times – most recently in a story called “Time to Bag TSA Screeners?”).

The latest news concerns American Airlines’ new weight regimen; I guess you could call it a diet. It’s all about the various things the carrier is doing to drop weight on its planes in an effort to keep fuel costs down.

These new measures include replacing all 19,000 drink cart with new ones that are 12 pounds lighter than the old ones. Believe me, it adds up.

This reminds me of the legendary story about former American head Robert Crandall who, in a fit of cost-cutting, once ordered the removal of olives from salads in the onboard meals. Then, during the last fuel crisis – circa 2008 – we saw airlines removing life jackets from cabins and paper manuals from cockpits. And now, lighter drink carts. Nothing like $100 a barrel oil to get jets on a diet.

On the bright side, at least now when that drink cart comes by and whacks your elbow, it may not hurt as much.

When is the Best Time to Buy Summer 2011 Airline Tickets?

March 8, 2011 | Posted in: Airfare News,Fuel Watch,Pricing Activity | 0 comments

Best Time to Buy Summer Airfare

A bit long, but well worth your time — Rick

Oil prices are getting ridiculous again. That means airlines are pulling the parachute rip cord and sailing off to the Land of High Prices (there have been six airfare hikes since January). Oh, and don’t look for any empty middle seats, either – the airlines have perfected the art of capacity cuts.

So, expect sky high airline ticket prices this summer. Prudent passengers are already getting some airfare quotes and I suspect most are not liking what they’re finding – and that’s because airlines are expecting strong summer demand – so why should they discount.

So, the 10 million dollar question is: When should I lock in my summer air travel plans?

Let me see if I can help shed some light.

Right now is a bit too earlier to lock in for airfare for June or July travel. This is because the airlines are still concentrating their activity on April and May departures and haven’t quite gotten around to probing the appetite of early bird shoppers with decent summer deals. I would (and I will) plan on shopping in earnest for those trips in the latter part of March. However, do sign up for the FareCompare Airfare Alerts now, just in case they pull a “Crazy Ivan” on you (feel free to look it up on UrbanDictionary.com).

That said, you should be shopping in earnest now for April/May departures as the short term prospects of fuel prices dipping aren’t looking promising.  I am not suggesting you become a day trader on the oil futures exchange, but it might not hurt to remember what you paid this week for a tank of gas.

When is the Best Time to Buy Summer 2011 Airline Tickets?

Here’s your answer:

  • Start shopping later this month
  • Do not procrastinate by waiting until May

This year, we’ll see the early bird getting the “better bad deal”; the really great deals, unfortunately, will be few and far between.

Why should you listen to my musings on this topic?  At FareCompare we have the luxury of sitting on top of the world’s largest database of current and historical airfare information and get to watch airline ticket pricing machinations for over 500 airlines in real-time, 24/7. Our sole goal when we hit the door each morning is to work on technology to find deals and help you make a better buying decision. That is who we are and that is what we do.

Let me toss out a few tips that will help you save some money on your summer vacations:

  1. Sign up for FareCompare Airfare Alerts: Our real-time alerts are the best way to keep track of what is happening on your favorite route
  2. Consider a connecting flight: As painful as that may sound, nonstops are now garnering a $100+ premium
  3. The best time to shop for airfare is Tuesday at 3pm EST:  Shop Tuesday throuth Thursday. Do deals ever occur on the weekends? Yes; and someone usually wins the lottery, too
  4. Fly the Cheapest Days: These are typically Tuesday, Wednesday or Saturday; if you can’t fly any of these days for both departure and return, at least schedule one of your flights on these days to realize some savings
  5. Split Up Your Family’s Ticket Purchase: When shopping for multiple tickets, airline reservation systems bump everyone up to the next higher price level, if there are not enough seats available to fulfill your entire order. By purchasing one-at-a-time, at least some in your party will snag the cheapest available seats

Final note of caution: Back in the summer of 2008, oil prices hit $145 per barrel and Goldman Sachs came out with a report saying oil was likely to hit $200/barrel. That prompted many to lock in Thanksgiving and Christmas flights; instead oil crashed to $50 per barrel and procrastinators were rewarded with much cheaper seats.

Could this happen again? The honest answer is, no one knows. For now, though, my advice is: be prudent, shop early and you’ll definitely be able to score a deal (even if it is the best of some bad ones).

Oil Spill Not Affecting Gulf Airline Ticket Prices – Yet

May 25, 2010 | Posted in: Fuel Watch,News | 0 comments

oil spill gulf airline ticket prices

I decided to take a look at that terrible oil spill in the gulf, and see how it’s affecting airline ticket prices.

So far – and you’ll see this clearly on the airfare price charts I created – it hasn’t had much affect on flights to New Orleans (but you sure can see how much prices have risen since last year).

Later this week, I plan to investigate other gulf cities, and the airline ticket pricing situation there – and see if we’re starting to see some real change.

If any of you have (or had) plans to visit the region – perhaps a vacation on the beach in Panama City, Florida – let us know if you’re going ahead with your plans, or if you are starting to think about looking elsewhere.

Take 3: Domestic Airline Ticket Fuel Surcharges are Back

April 21, 2010 | Posted in: Airfare News,Delta,Fuel Surcharges,Fuel Watch | 4 comments

domestic airline ticket fuel surcharges

Many times airfare hike attempts look a bit like a ball traveling through a pachinko machine — and that is the case with this latest “fuel surcharge” airfare hike attempt by Delta.

This morning, it looked as though this Delta-initiated hike (via a fuel surcharge) was going to fail, especially after both Delta and United rolled back. However, it appears I may have been premature in seeing it as a flop.

That’s because Delta has now reversed itself, and at 1 pm,  jumped back into the hike – joined by Virgin America and Alaska (American is still participating).

There is another domestic airfare feed at 8pm EDT time tonight, which is likely to see United jump back in (they also dropped out when Delta did this morning).

We know who’s in – but, who is not going along with this hike? Keep reading…

Take 3: Domestic Airline Ticket Fuel Surcharges are Back

Domestic Airline Ticket Fuel Surcharges are Back, Briefly

domestic airline ticket fuel surcharges

This is an update to last night’s post that revealed Delta Air Lines filed a $20 roundtrip fuel surcharge on tens of thousands of mostly smaller city-pairs.

However, Delta has now backed away from that; the carrier removed its surcharge filing – but not before both American and United matched this $20 surcharge.

By this morning though, United pulled out, leaving only American with the new surcharge.

What’s going on? You could say these new fuel surcharges are just another way of saying “airfare hike”. Face it, fuel prices – now at a little more than $80 per barrel – have not risen above airline estimates. So, the surcharge is yet another gambit to try to bring in extra revenue, much like those “peak travel” day surcharges are (and the successful bag fees).

The airlines haven’t had much luck with regular price hikes this year, so they’re trying whatever they can, to see what works – but so far, this latest attempt seems to be fizzling.

However, I do expect to see more price hike attempts, in a variety of guises, as the busy summer season approaches.

Domestic Airline Ticket Fuel Surcharges are Back

April 20, 2010 | Posted in: Airline News,Delta,Fuel Surcharges,Fuel Watch | 0 comments

domestic airline ticket fuel surcharges

U.S. travelers haven’t seen domestic airline ticket fuel charges since November of 2008, when legacy airlines folded these surcharges into the base airfare as the price of oil dropped dramatically from early summer highs.

But now, oil prices are cresting over $80 per barrel and the surcharges are beginning to make a come-back: On Monday, Delta Air Lines filed a $20 roundtrip ($10 one-way) fuel surcharge on top of their lengthy list of “peak” travel day surcharges, on tens of thousands of mostly smaller city-pairs with no departure date restrictions.

For example, a one-way connecting Delta flight from San Francisco to Denver or Dallas (via Salt Lake City) on May 27 has both a peak travel surcharge of $30 and a fuel surcharge of $10 tacked on to the base airfare.

Keep reading – and see how the “hub cities” were spared the surcharge…

Domestic Airline Ticket Fuel Surcharges are Back

Spirit Airlines Offers a Little Transparency on Fuel Prices

February 12, 2010 | Posted in: Airline News,Fuel Watch,Pricing Activity | 0 comments

Spirit airlines transpareny fuel prices

Ultra-discounter Spirit Airlines, home of the $9* airfare, is offering customers a new chart that lays out the cost of jet fuel per flight.

They call it an effort at “transparency in fuel costs” – while talking about how fuel efficient their aircraft are – and I applaud this effort. A baby step is still a step.

On the other hand, it’s another way to let consumers know that the airlines do not control the price of oil, and if customers don’t like the total cost of their airfare they should take their ire elsewhere.

And yet – and I am speaking now of the airlines in general – when fuel prices soared in 2008, many carriers slapped fuel surcharges onto the price of their tickets. Took months for those surcharges to come off though, once the price of oil came down.

In any event, Spirit’s chart is a useful look at how much fuel is used during short hops and longer hauls – and how much it adds to the overall price of your ticket.

*$9 each-way, and yes, additional taxes and fees do apply

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