Stop Speculating and Fly
Sunday, July 20th, 2008If you’re on an airline mailing list, chances are you received an email from a CEO last week. The heads of AirTran, Alaska Airlines, American Airlines, Continental Airlines, Delta Air Lines, Hawaiian Airlines, JetBlue, Midwest Airlines, Northwest Airlines, Southwest, United and US Airways jointly sent out “An open letter to All Airline Customers†decrying the high price of fuel and pinning it on unnecessary speculation in the commodity.
Congress held hearings on the same subject. However, most economists agree that it is global demand, and not speculation, that is driving up fuel costs, in combination with the weakness of the U.S. dollar, which happens to be the currency in which oil is denominated.
The real purpose of the letter seems to be a valid one, nonetheless: To remind travelers that airlines aren’t to blame for higher airfares. The airline industry is one of the few that simply can’t pass on increased costs to its customers. The price of airfare has gone up less than the cost of a quart of milk, percentagewise, and when you think of how much more fuel it takes to fly an airplane than to run a milk truck, you know that the airlines are taking it on the chin.
That’s because price resistance is a fact of life with leisure travelers. I’ve said this before: When fares aren’t low, people look for vacations closer to home. So if your business depends on air travel, other than stopping all that speculating in oil that you’ve been doing (LOL), what you can really do is fly for your vacation this summer. And not with your airline miles, either.
- Mary Hunt, editor, eFlyer
