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Old 02-09-2009, 01:32 AM
 
Location: Beautiful place in Virginia
2,658 posts, read 10,796,174 times
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Gas prices have dropped somewhat. Why aren't airlines dropping their prices?

Nowadays, they nickle and dime us for checking bags, getting drinks or snacks, etc.
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Old 02-09-2009, 06:04 AM
 
Location: southwestern PA
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IDK - I think prices are reasonable... and faster than driving.

DH and I got a nice price when we went RT PIT - SEA.
We traveled for the week with just a carry-on... so no bag fees.

DD and her DH flew Southwest with four bags (Christmas time) and had no bag fees.
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Old 02-09-2009, 08:10 AM
 
Location: The Raider Nation._ Our band kicks brass
1,854 posts, read 9,010,102 times
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It's called fuel hedging. Back when prices were the highest, airlines were signing contracts for future fuel purchases. It was a guessing game of how high the prices would go. They guessed wrong. Even though oil prices are down, airlines are obligated to pay the high prices that they signed for.

Go look at the annual financial reports of all the major airlines. They lost billions of dollars last year due to fuel prices. That money has to be recouped somewhere.
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Old 02-09-2009, 09:53 PM
 
Location: Beautiful place in Virginia
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Quote:
Originally Posted by South Range Family View Post
It's called fuel hedging. Back when prices were the highest, airlines were signing contracts for future fuel purchases. It was a guessing game of how high the prices would go. They guessed wrong. Even though oil prices are down, airlines are obligated to pay the high prices that they signed for.
Thanks for the explanation.

That makes a lot of sense to me.
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Old 02-09-2009, 09:56 PM
 
Location: southern california
59,680 posts, read 78,340,227 times
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food prices did not fall either.
what goes up does not necessarily must come down.
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Old 02-10-2009, 07:02 PM
 
Location: Eastern Washington
15,108 posts, read 47,802,779 times
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That (fuel hedging) and maybe they are trying to dig themselves out of the financial hole they have dug themselves into the last year or two.

I have to agree with you on the "nickel and dime" charges though - I would cheerfully pay say $30 to $50 extra per ticket to have the old style free meal on any flight long enough to eat it, to be able to check a bag of reasonable size, to not have to pay for blankets, etc. a la carte.
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Old 02-10-2009, 07:41 PM
 
48,508 posts, read 87,615,651 times
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P)rice of most goods are like taxes'once l;eevoled they don't recnd them even if for a staed purpose. Look at food and other goods that they went upi on because of transportation cost;haven't dropped. People talk about gasoline but other products don't folow the demanhd and cost. The governamnt needs to quite propping up food prices in my opinon and admit that gasoline follows the market better tha most products as has been shown. Airlines are just ne of these.
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Old 03-16-2009, 01:04 AM
 
Location: Ohio
668 posts, read 1,987,164 times
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Because Airlines buy ahead of time, on the 'futures market'... So, they buy in bulk or millions of gallons or hundered thousands of gallons at a time and have it stored and delivered when they need it. This being said, they probably bought enough fuel to last them either one or two years down the road, and will 'have' to keep the prices up, until thier obligations on the price of the highend gas they have, runs out.

Some airlines, who are smaller, are already dropping prices, as they dont bother with the 'futures market'..and can afford to pass on the savings already.

May the LORD Bless each of you.

I wish you well...

Jesse
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Old 12-27-2014, 01:28 PM
 
Location: Yucaipa, California
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I haven't flown in yrs but I am abit surprised on how the airlines nickel & dime the customer big time.
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Old 12-27-2014, 02:09 PM
 
48,508 posts, read 87,615,651 times
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Airlines not long ago where often losing money ;so they adjusted what they charge for. Many still are. Then many also contracted to a set price in hope of hedging higher cost for fuel later. Its a very competitive business as always. When one realizes only the well off would fly not that many decades ago except on rare instances; it shows now much affordable flying has become.
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