Gasoline is down. Electrical bills are down. Shipping costs are down. But airfares are flat and might even go up soon.

The combination of strong demand and limited seats has made it possible for airlines to keep fares high in the face of tumbling jet fuel prices.

Why? The short answer is because they can.

"It is incorrect to assume that pricing is cost-based. It is based on supply and demand," said New York airline consultant Bob Mann. "If the industry is ‘full’ at current prices, why would they reduce prices?"

The drop in oil prices could actually lead to higher airfares, Mann said.

With consumers seeing a significant reduction in gasoline and heating fuel prices, they should have more disposable income — some of which might be spent on additional air travel.

"Demand for air travel may be stronger in a declining energy cost environment, and with limited capacity, that could result in further airfare increases," he said.

Despite oil prices plunging roughly by half to about $53 a barrel over the past year, airfares between the mainland and Hawaii have not dropped much during that period, according to Rick Seaney, chief executive officer of the travel search engine FareCompare.com.

"There is no incentive for airlines to discount with decent demand," he said in an email. "Demand is likely to go up as consumers save at the pump."

Hawaiian Airlines President and CEO Mark Dunkerley said prices are a function of marketplace dynamics and defends the company’s decision not to cut fares even though Hawaiian stands to save $240 million in fuel costs in 2015 if the low fuel prices stick around.

"The reason why we don’t pass along fuel increases to consumers is because the price of an airline ticket is set by the amount of supply of seats and the demand for travel," he said in a phone interview. "As long as supply and demand stay at roughly the same equilibrium, ticket prices stay roughly where they are."

Higher fares are created by no competition, tight supply and heavy demand, Seaney said. Conversely, lower fares are spurred by competition, oversupply and weak demand.

Through the first 11 months of 2014, U.S. airlines reported 82.8 percent of their seats were occupied. Hawaiian Airlines filled 81.5 percent of its seats last year.

Strong passenger demand aside, there are other reasons why Hawaiian and other carriers aren’t lowering prices, according to local airline historian Peter Forman.

Many airlines, including Hawaiian, buy fuel hedges to lock in prices and protect themselves against future spikes in the price of oil, Forman said. So even though the price of oil has come down significantly, Hawaiian still is committed to paying for a portion of its fuel at higher prices, he said. Also, the price that Hawaiian pays for jet fuel does not go down as fast as oil prices because the cost of refining and transportation is still there.

Colorado-based airline consultant Mike Boyd sides with Hawaiian and other carriers for keeping prices firm.

"They’re not a public utility; they’re a business," Boyd said. "The argument that fuel is down so airlines should lower their fares, quite frankly, sickens me. No. 1, $45 a barrel (which was reached last month) is not cheap oil for an airline. They’re not charities. The argument is that fuel has gone down so airlines should pass it on to consumers. But why, when consumers are willing to pay at the current level? If consumers are filling up their airplanes, it doesn’t make good business sense to bring it down."

However, as airlines add more capacity to take advantage of the low fuel costs and to realize greater profits, the extra competition for passengers could eventually lead to lower fares.

Hawaiian Chief Commercial Officer Peter Ingram said the airline will feel some pressure during the first half of this year due to record industrywide air seat capacity on routes between North America and Hawaii.

"As 2014 drew to a close, our book load factor (percentage of seats filled) for the first half of 2015 came under some pressure, and the challenging booking trends continued into the early part of 2015," Ingram said on an earnings conference call last month.

The Hawaii Tourism Authority is forecasting that overall air seat capacity to the islands will be up 5.8 percent this year.

Local economist Paul Brewbaker said airlines have been adding flights to Hawaii to profit further from the low-cost environment, but it’s just a matter of time before the threat of potential market entrants, such as Southwest Airlines or Virgin America, prompts incumbent carriers to reduce fares to stave off new competition and retain or improve their market share.

"Who will be the first mover to make a break for lower airfares?" Brewbaker, the principal of consulting firm TZ Economics, said in an email. "Who will bust the first move? My guess is that the game will play out as follows: Neither American, Delta, United, or any of the majors will bust the first move on fares to Hawaii. Hawaii is a long-haul destination full of leisure travelers, which is the definition of a low-yield destination. You can’t turn a plane around more than once a day, either, and it isn’t full of business travelers with their I’m-so-important roll-aboard suitcases paying higher, last-minute, I’ve-got-to-be-at-that-meeting airfares. So, the majors are followers. not leaders, in the trans-Pacific Hawaii trade.

"I would expect that the upstarts, the destination carriers rather than the network carriers, will bust the first move," Brewbaker continued. "My bet is on Alaska first, followed immediately by Hawaiian, and grudgingly by the majors on the way down. If oil prices stay at $50 a barrel … then eventually — and I would say this year — somebody’s gotta crack. It might be an upstart new entrant."

Among the potential newcomers, Virgin America has said it hopes to expand to Hawaii this year, while Southwest Airlines reiterated last month that Hawaii is one of 50 new destinations it is considering.