Question for travel agents, airline employees, etc: With the oil prices falling further and further: do you think this will lead to lower air fares next year? How long would it take for ticket prices to fall? Do airlines pay for fuel a couple of months in advance, so that they are still running on more expensive fuel at the moment?
Thanks for sharing your thoughts.
Low Oil Prices: Will Flight Prices Fall in 2015?
Hikey on 24/12/2014 - 14:12
Comments
did flight prices fall when carbon tax got axed?
Airlines buy their fuel years in advance to mitigate against a fluctuating crude price.
I doubt we will see significant price falls as the fuel as already been bought on contract.
If OPEC can keep it up for a year then things may change and we could see a significant price drop.
Until then there may be a few dollars saved here and there, but nothing substantial.
Should give them a buffer for deeper than usual price cuts during sales, though can't really see 'normal' prices falling that much, they're not that nice. Especially since most carriers are still struggling to make a profit.
Good article explaining how it works: http://www.smh.com.au/business/aviation/casinolike-fuel-hedg…
Qantas and Asiana look like the big winners as most of their fuel is bought at spot prices.
All airlines have different policies on fuel hedging, but as a general rule, they all buy at least a proportion on the spot market, so will already be benefiting from lower prices.
I expect to see lower prices in tickets this year if the low oil price continues.
Fuel surcharges on Frequent Flyer redemptions have been a convenient way for airlines to further erode the value of frequent flyer points. I don't think that the ACCC will be able to do anything about it. I think that competition and the need to fill vacant seats will be the only forces at work on the pricing
Thanks everyone, I need to fly in June and guess I just wait a little bit longer and see whether it has any effect on the prices before I book. Cheers!
biggest impact on airfare prices is world events & therefore consumer confidence.
With fuel prices dropping, airlines are more likely to put on extra flights at busy times of the year, everything else being equal.
This month is a great time to buy airfares to anywhere for a number of reasons
1) many still paying off Xmas so no funds, so bookings normally down
2) many Xmas school holidays earlybird deals are out now. The earlybirds are always (except at start of GFC) the cheapest time to buy Xmas airfares to Europe & North America.
Maybe, maybe not.
Doesn't quiet correlate that closely.
They usually lock in futures contracts, same with currency hedging.
AvGas is different too. Not same as our car fuel.