Fox Business
Expand
Browse All Video
Watch Live

You're watching...

Why Aren’t Airline Ticket Prices Following Oil’s Decline?

Details

  • Description

    Vaughn Cordle with AirlineForecasts.com on the high cost of flying.

  • Duration 3:26
  • Date

Clips

Also in this playlist...

Transportation

Auto-advance: ON

Auto-advance
View All

Transcript

This transcript is automatically generated

We talked about travel deals to Europe and right now we want to talk about the high price of airline tickets to -- -- Joining the company is born -- with airline forecasts dot com.

-- always a pleasure to have you back and I wanna -- a very simple question.

The price of -- has come down -- lost the price of jet fuel has come down a loss.

But airline ticket prices and all the other things you have to pay -- to get on a plane has not come down -- -- -- come down and rule can you tell me why.

Well for other the average -- in 2012.

All prices and jet fuel prices -- higher than 2011.

Now for the month of June.

All prices down about 70%.

But the cost -- refinery.

The final call had a come down as much -- you know prayers and apparently with paying an -- a leg to fly anyway.

I don't see any rate even though there's a break with oil prices -- -- -- breaking jet fuel prices over the past month one it was last.

I think fares will come down if oil averages the mid eighties that it's averaging this month for the rest year.

But remember.

The economy really -- here we have.

I did I completely disagree with -- -- that that is -- the opposite of what's gonna happen these airlines finally.

Are making profits and they're gonna hang on about a matter what can you you can I'll I'll I think and -- are gonna come down for the -- I -- I summer I'm all ideas and.

Read economies a little soft.

Airlines have X amount of capacity out there and load factors fall fares will follow live cattle down plane that -- got like four I already -- the level right factors are in the mid 80% range that's 50% in.

And as demand falls off a little bit because a softer economy.

Airlines will follow fares will follow.

Fuel and load factors down this is like night follows day will be the case I agree though these lower fares will.

If they happen which I believe they will may be in -- three to 5% range they'll will be temporary because higher labor cost about.

Two billion.

Higher security costs a 1000000005.

And higher.

User fees.

From the government will ultimately.

A result in no lower fares time so -- so let's let's be very clear here.

The industry is concentrated quite dramatically yet the unemployment percent of -- is that this does do well -- 0% increase in in this so called her Fidel index in terms of market concentration.

But fuels.

Air fares always follow.

Fuel -- a high correlation there about 87%.

Of go on Block's ability affairs follows the flexibility I'm at a time or.

You know tell me what I -- -- because I wanna go on a -- -- with my large family out of luck and a nominal like -- here's -- here's a good point although all prizes jet fuel prices.

This month over the average for the year on annualized basis.

You know actually net out maybe four billion that roughly be -- -- lower -- time.

Will say.

Of them you're shelling out of temporary on this -- that anyone could well we'll have you back message you're right thank you very much -- -- won't -- to see you think might take.

Load More