if gas has gone down at the pump so, why arn't airlines lowering thier rate? they raised it and blamed the price of a barrel of oil.
2006-10-03 11:09:37 · 7 answers · asked by buddy 1 in Cars & Transportation ➔ Aircraft
It is actually because they have contracts for fuel. South West has the lowest contracted rate locked in around 5 years ago. This has given them a huge advantage.
SWA locked into Jet-a at $.53/gallon. They are paying market price now which has had a $2.17/gallon average over the past 3 months. (It was $1.53 this morning)
So given the "hedges" they have had they will still have to pay more for fuel than they ever had to before and thus tickets may still go up unless fuel prices dip into the .50-.60 range again.
2006-10-04 04:10:21 · answer #1 · answered by Drewpie 5 · 0⤊ 1⤋
It's all in supply and demand. If people pay the price and fill the airplane seats, why would they lower the prices.
Airlines have such thin profit margins so they need all the money they can get.
Also some airlines use fuel hedging (like insurance against high prices) which still costs even though fuel has gone down.
2006-10-03 12:26:52 · answer #2 · answered by Anonymous · 0⤊ 0⤋
Probably because airlines set their airfare based on the trend of oil prices, not weekly fluctuations. The price of oil, on the whole, has gone steadily up, so they have followed suit with their airfares. It's impractical for them to adjust their airfares daily or even weekly based on the current price for a barrel of oil.
2006-10-03 12:26:00 · answer #3 · answered by ncolton22 2 · 1⤊ 0⤋
in the beginning, maximum human beings say "gasoline" to point "gasoline," and maximum airliners in recent times are turbojet or turboprop powered, meaning they use jet gasoline, quite than gasoline. Takeoffs, with the aid of definition, are made at finished power, and in maximum situations heavily isn't helpful in any different case. airways are honestly engaged at the instant in a software of lowering power for the time of cruise flight with the aid of some proportion factors, to shop gasoline. the consequence is a minimum alleviation in cruise velocity, and a flight that's basically a jiffy longer.
2016-12-08 07:54:24 · answer #4 · answered by Anonymous · 0⤊ 0⤋
Have you noticed that the price of diesel is still high. Jets use jet fuel which is basically a high grade of kerosene which is similar to diesel fuel.
2006-10-03 11:14:46 · answer #5 · answered by Captleemo 3 · 1⤊ 0⤋
because overall fuel went up only gasoline fuel has went down
2006-10-03 12:04:24 · answer #6 · answered by bill f 3 · 0⤊ 0⤋
Maybe they don't use the average gas station.
2006-10-03 11:12:01 · answer #7 · answered by Owlwings 7 · 0⤊ 0⤋