When Are Air Fares Going To Lower Along With Oil Prices?

Answer: Just in time for last-minute holiday travel!

When the price of oil goes up, gasoline, air fares, and grocery prices all go up, too, just to name a few items. So what happens when the oil prices come down? Shouldn't these items also reflect the lower oil prices as well as when oil prices rise? Yes, they should. Finally, air fares are beginning to decrease - and that's good news for the consumer because it's just in time for the holiday travel season.

Even though at the end of November 2008, fuel prices had fallen by 50 percent, air fares had still only declined by 17 percent. Some trends indicate that international air fares are going to be reduced lower than domestic fares. Skeptics have said that airlines, having had to cut a number of flights to remain profitable, are still hurting in terms of overall losses so that ticket prices may not drop as much as they might under other circumstances.

However, the traveling public is glad to get any break at all, and so the lower fares come as welcome news. Reports have suggested that the longer travelers can wait to make definite travel plans, the better their chances are of getting the lowest possible prices. If you can be flexible with your travel schedule, your prospects for an opportunity with a lower air fare are greatly enhanced.

Airlines are also willing to reduce air fares to try and win customers back after the sharp increases in air fares during the last six to nine months. Customers need to be lured back with cheaper air fares as some of the recent experiences at airports (i.e., longer lines, waiting times, delayed or canceled flights, etc.), not to mention the increase in ticket prices, have "put off" customers that normally would travel by air. Incentives would be helpful.

One research analyst with the firm Airline Forecasts stated that prices could drop a minimum of seven percent more in 2009. The economic downturn has consumers worried and spending even less; therefore, the airlines will necessarily have to lower prices even further to get travelers to return to the air. Right now, this is seen as a win-win situation for holiday travelers.

A member of the industry trade group, Air Transport Association of America, said that airlines should be careful about cutting prices too much, as no one knows what's going to happen with fuel costs next. Additionally, the airline industry in the United States is expected to lose between $4 and $6 billion this year, and they do need to find some way to at least break even in expenditures versus revenues. However, airlines are under pressure from Congress, as well as the traveling public, to not keep too much of the fuel savings, but instead pass it back to consumers. After all, not only have the airlines added fuel surcharges, but they also began charging additional fees for checked bags, food and drinks, pets, and even blankets and pillows.

The economic slowdown has affected how many passengers are traveling, for business as well as pleasure. Therefore, to entice customers to travel more, the air fares are going to have to come down more. With fuel prices lower for airlines now, combined with the fact that fewer people are choosing to fly, most experts speculate that airlines are going to have to offer lower fares, and continue to offer them for the foreseeable future.

Take advantage of the reduced air fares this holiday season to enjoy your holiday travel to the fullest!

 

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