Here's why airline ticket prices are rising even as oil prices tank


Dropping oil prices mean that gas prices have fallen — you probably noticed — and airline fuel costs, too. In fact, airlines are saving tens of millions of dollars a week. So why aren't they sharing the wealth through lower fares? The short answer, says The Associated Press' Scott Mayerowitz, is that they don't have to: "Planes are full. Investors want a payout. And new planes are on order. In fact, fares are going higher."
U.S. airlines had a rough time in the 2000s, and they made up for shrinking revenue by nickel-and-diming customers with new fees and reduced services. Those baggage fees aren't going away, Mayerowitz says, and ticket prices will probably stay high because airlines have gotten really good at limiting flights to just fewer than demand, keeping airplanes full (or, if you're a passenger, crowded).
Don't like it? "Thanks to several mega-mergers, four big airlines control the vast majority of flights, leaving very little room for another airline to undercut fares," Mayerowitz says. Airlines are reinvesting some of their rising profits in new airplanes and other capital improvements, so there's that.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
In any case, Americans seem to be resigned, said research firm J.D. Power earlier this year. "It isn't that passengers are satisfied with fees, it's that they are simply less dissatisfied because they realize that fees have become a way of life with air travel," said J.D. Power's Rick Garlick. "Passengers are over the sticker shock of being charged more to fly, having to pay for checked bags, expedited security clearance, or for preferred seating."
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
Peter has worked as a news and culture writer and editor at The Week since the site's launch in 2008. He covers politics, world affairs, religion and cultural currents. His journalism career began as a copy editor at a financial newswire and has included editorial positions at The New York Times Magazine, Facts on File, and Oregon State University.
-
July 13 editorial cartoons
Cartoons Sunday's political cartoons include new TSA rules, FEMA cuts, and Volodymyr Zelenskyy complimenting Donald Trump's new wardrobe
-
5 weather-beaten cartoons about the Texas floods
Cartoons Artists take on funding cuts, politicizing tragedy, and more
-
What has the Dalai Lama achieved?
The Explainer Tibet’s exiled spiritual leader has just turned 90, and he has been clarifying his reincarnation plans
-
Dollar faces historic slump as stocks hit new high
Speed Read While stocks have recovered post-Trump tariffs, the dollar has weakened more than 10% this year
-
Economists fear US inflation data less reliable
speed read The Labor Department is collecting less data for its consumer price index due to staffing shortages
-
Crypto firm Coinbase hacked, faces SEC scrutiny
Speed Read The Securities and Exchange Commission has also been investigating whether Coinbase misstated its user numbers in past disclosures
-
Starbucks baristas strike over dress code
speed read The new uniform 'puts the burden on baristas' to buy new clothes, said a Starbucks Workers United union delegate
-
Warren Buffet announces surprise retirement
speed read At the annual meeting of Berkshire Hathaway, the billionaire investor named Vice Chairman Greg Abel his replacement
-
Trump calls Amazon's Bezos over tariff display
Speed Read The president was not happy with reports that Amazon would list the added cost from tariffs alongside product prices
-
Markets notch worst quarter in years as new tariffs loom
Speed Read The S&P 500 is on track for its worst month since 2022 as investors brace for Trump's tariffs
-
Tesla Cybertrucks recalled over dislodging panels
Speed Read Almost every Cybertruck in the US has been recalled over a stainless steel panel that could fall off