For weeks now, we’ve been seeing an increase in fuel prices, partly due to the higher price of gas all around, which has been affecting travelers who are both flying and driving to their destinations.
Southwest Airlines
However, the hope has been that fuel prices will fall again at some point, hopefully sooner rather than later. That would hopefully mean that the cost to fly would also go down…right? Well, according to the CEO of Southwest Airlines, the answer could be no.
In a recent interview at Bernstein’s 42nd Annual Strategic Decisions Conference, Dallas News has reported that Southwest CEO Bob Jordan is reporting that, in short, even when fuel prices are lower, it’s very likely we’ll see the cost of airfare remain high.
Southwest Airlines
He’s quoted saying, “I think we — our network competitors, you can tell, we’re all focused on ratable production of results, steady production of results, sustainable margins. And so I do think that produces a backdrop where we’ll — there’ll be — we’ll certainly not attempt to give some of these fare increases back.” Aircraft oil and fuel make up about 29% of the costs for an airline to fly, so the increase in price has certainly had a major impact. Why wouldn’t prices be lower for consumers, though, when fuel prices are lower? Well, Bob Jordan continued on, saying that even though the cost to fly has risen exponentially, there’s been no drop off in customers flying. Because of that, the airlines figure they can continue to charge more, make more money, and won’t see any repercussions for it.
Southwest Airplanes
In fact, Bob Jordan went as far as to say that we could see even MORE fare increases for passengers, stating that the current rate of price increases still supposedly isn’t enough to cover the price hike on fuel. Airline prices have risen nearly 21% in the past year for consumers, and, based on what we’re hearing here, it’s very likely that they could continue to increase throughout this year.
Southwest Airlines gate at Harry Reid International Airport
It’s important to note that ticket prices aren’t the only way airlines have been making back money to account for the increase in fuel prices. Southwest, American Airlines, and other major airlines have also hiked up the bag fees, which has also majorly affected customers.
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I happily flew Southwest for 44 years. Trust me….it’s not the same airline! Nor is flying safe or fun these days with any airline. These are corporations which exist to enrich stockholders in a capitalist economy. You heard it from the horse’s mouth. They will continue to charge high prices for greater profit because the customer is willing to pay those high prices and extra fees. I guarantee you that if people would stop flying to affect the airline’s bottom line, prices would fall! Speak with your wallets, folks!
Also the loss of bargain airlines, Spirit would lend to price increases too!! Surely not helping!