(SeaPRwire) –
By: Christian Pierce
Jet fuel prices have dropped 40% since April’s peak. But your summer flight ticket still costs way more than last year. Airlines say they’re passing savings to customers. But the numbers tell a different story.
Let’s look at the facts. Jet fuel hit $4.88 a gallon in early April. Now it’s $2.91, thanks to the U.S.-Iran interim deal. But average domestic fares rose 15% from mid-February to mid-May—from $333 to $384, per Kayak. Spirit Airlines folded in May, cutting capacity. The TSA expects 18.7 million travelers over July 4. The World Cup and America’s 250th anniversary are driving demand. Most U.S. airlines don’t hedge fuel costs anymore. Southwest ended its program last year. So they felt the full brunt of price spikes.
Here’s the loop. High demand lets airlines keep fares high. Uncertainty lingers—last week a vessel in the Strait was hit, oil prices jumped 2.5%. Airlines don’t want to cut fares now, in case tensions flare again. War risk insurance costs are still up. Competition might eventually push prices down. But for this summer, don’t hold your breath. Fares will stay elevated until demand cools or the industry feels confident in long-term stability.
Author bio: Christian Pierce, chief financial columnist and markets commentator focusing on travel and energy sector economic trends.