Even as Jet Fuel Falls, Don't Look for Cheaper Airfares

The cost of airline tickets may be riding out the fall of jet fuel prices instead of following them down. Fuel prices have dropped to their lowest level since the Iran war began—about $2.80 a gallon, more than $2 off April's peak—but aviation analysts say travelers shouldn't bank on a quick return to bargain fares, reports NPR. Carriers argue that higher fuel was only part of the squeeze: labor and airport costs are also rising, and the industry's profits are thin. Global airlines expect a fuel bill that's $100 billion higher this year, with margins of roughly 2%, according to the International Air Transport Association. US airlines collectively lost $1 billion in the first quarter.

"The costs of operations are baked in now for the next three or four months for most airlines, with little room to be able to maneuver," John Grant, an aviation analyst at OAG, tells the New York Times. "It's not a simple cause-and-effect relationship. Oil coming down by 10 percent doesn't mean prices come down by 10 percent." With customers still paying more—average fares are up over 20% from a year ago—executives are signaling they'll try to hang on to at least some of the price hikes. "If people will pay it, why would you take it back?" said aviation consultant Michael Boyd, who dismissed the return of rock-bottom fares as "another planet long, long ago." United's CEO predicts elevated prices into next year, while JetBlue's chief says the industry is planning for fuel costs to unwind slowly, not snap back.