With fuel costs continuing to drop, a new study finds the relationship between fuel prices and airfares benefits airlines more than passengers.
The study by the travel research site Hopper.com found that over the past 22 months fares have remained flat when fuel prices have dropped. But when fuel prices have increased, fares have jumped more than three times the increase in fuel costs.
Airlines disagree with the premise of the report, saying profitable times allow carriers to improve their service, expand to new markets and pay down debt.
"Do you pay less at Starbucks when the cost of coffee beans falls?" asked Jean Medina, a spokeswoman for Airlines for America, the trade group for the nation’s airlines. "Presumably you want Starbucks to expand its stores, offer new beverage choices and share profits with its baristas and stockholders. We are no different."
American Airlines drops seat idea
If you thought the recent financial success enjoyed by the nation’s airlines would stop them from trying to squeeze more passengers onto planes, think again.
The good news for passengers is that the latest effort to increase passenger capacity in regional jets at American Airlines has been quashed by opposition from its pilots union.
American, which is in the process of merging with US Airways to become the world’s biggest carrier, is in contract negotiations with its pilots. Amid the contract talks, American Airlines president Scott Kirby suggested adding five seats to the medium-size regional jets, increasing capacity to 81 passengers.
American is already collecting record profits. In the three-month period that ended in September, the parent company for American Airlines and US Airways reported net profits of $1.2 billion, up 59 percent compared to the same period in 2013.
Kirby dropped the seat idea in the face of objections from pilots, who said the move would let American shift more passengers to the regional carriers. Those pilots typically earn less and are not represented by the union.
Hugo Martin, Los Angeles Times