Meaghan

I've heard arguments both ways. Some say that jet fuel is only 12% of an airline's cost, so the ticket prices shouldn't go up. Then others have said just the opposite.

I'm looking to buy 10 tickets from Detroit to Tampa for travel in late October/early November. The prices right now aren't fantastic, but they aren't horrible either. I know it's a gamble, but I'm trying to figure out if I should buy now or keep watching for a better fare.

Gas prices here in mid-Michigan are around $2.12 a gallon, down from $2.21 this past weekend. Still not sure if this will affect the airlines or not, although my gut is telling me that it will.

NoFlyZone

The short term price fluctuations we see at the local pumps do not directly affect the airlines because they purchase their fuel far in advance, on the futures market. That allows them to ride through, for example, the usual summer increases. However, long term prices do affect them.

Having said that, Continental raised prices $10 to $20 last week to cover the fuel situation. Yesterday they rescinded the increase because no other airline matched them. (And who says there is no collusion in the industry?)

So the standard advice holds: if you are comfortable with the price now, buy. It usually isn't worth the hassle of trying to save $15 a ticket when the price may suddenly increase.

AAFrequentFlyer

Meaghan,

What would you consider fantastic fares?

Right now they are about $180 R/T. Do you really expect the fares to drop? Please, be somewhat realistic.

Meaghan

AA Frequent Flyer:

We flew to Tampa to spend Mother's Day with my parents and we paid $123 round-trip. That was an AWESOME price - and dirt cheap, I know. So yes, I'm realistic but also know that right now I'm looking at $218 round trip. It can and probably will fluctuate either way - but my question was about whether the current gas pricing will affect ticket prices, not how low they might go. I guess I don't consider $218 a "fantastic" price, especially when I multiply by 10.

rkkwan

Yes, higher fuel costs mean all the airlines are trying to raise fare to recover the extra cost, not lowering them. But they are talking about $10-20 fuel surcharge on their published fares.

As we all know, many other factors determine the actual fares - competition, demand, load %, whether there's a fare-war, etc... All of those factors will have higher effect than the $10-20 we're talking about here.

So, does higher fuel cost = higher ticket price? Yes, in a very broad term, and the effect is small. There are many other factors that have much higher effect than the cost of fuel.

But $218 is an okay price for Detroit - Tampa. If you want to look for lower prices, sure, you may get it. But prepared to check prices every day, as fares fluctuate, and good deals often last for just a few hours.