How does the cost of gas impact air travel?

Robert W. Mann Jr., an industry analyst and aviation consultant, said that for airlines, a 10 percent increase in fuel prices leads to about a 3 percent increase in overall operating costs. That could serve as an incentive for airlines to increase fares and fees, or introduce other charges. As Michael Boyd, president of aviation consulting firm Boyd Group International, puts it, “We mere mortals cannot dream of the fees that airlines can dream up.” Mann also noted that airline customers who are regularly filling their tanks with more expensive gas are forced to make tough decisions. “Some people will say, ‘I can either fill the oil tank with fuel to heat the house, or I can buy a higher-cost ticket to Walt Disney World to take the family,’” Mann said. On the other hand, Hayley Berg, head of price intelligence at Hopper, noted that a decrease in demand would probably put some “downward pressure on pricing” for airlines.

Are high gas prices already making flights more expensive?

Berg said airfares are already higher than they were in 2021, both because of higher demand and the fact that jet fuel prices are double what they were this time last year. However, Berg said airfares are still about what they were during this time in 2019. She said any impact on airfare because of a sustained conflict in Ukraine — and related effects on crude oil prices — would show up in the next two to three months. She noted that most airlines hedge oil prices, meaning they negotiate a price that is locked in for a period of time. That adds protection for around three to six months, insulating them from short-term changes in oil prices. “But we would expect that if there’s a continuation of a conflict and it does impact oil supply to the U.S. and globally, we would expect higher airfare this summer than we’re forecasting right now,” Berg said. The majority of U.S. carriers do not hedge , according to Bloomberg News. Boyd, however, said airlines will decrease their capacity and frequency, and customers will see fewer cheap fares “starting now.” “Airlines are going to start to adjust their fare availability very, very quickly,” Boyd said. “You know, that very low fare they had to Las Vegas? It won’t be offered anymore.” Mann has also already seen a spike in some fares this week, like a $99 flight from Phoenix to Las Vegas that jumped to $199, though he can’t say whether it is related to fuel costs. Berg noted that, depending on the impact on oil prices, airfare price increases would be “smaller than that relative jump up.”

How long will gas prices keep climbing?

Mann said the situation is unpredictable. “The unfortunate part is we don’t know how long this will go on,” he said, adding that it puts a “pretty large damper” on travelers’ plans as they think about taking trips this summer. Boyd said some changes could be permanent: If a given destination doesn’t make enough money, airlines might pull back and even not fly the route there. “Some of these markets that they pull out [of], they’re not going to go back into,” he said. Much the same way airlines protect themselves from oil-price increases, Berg said, they are slower to respond to price decreases if they have hedged again. “So, if it takes a few weeks for a price increase to impact customers, I would expect it would take a few weeks for a price decrease to impact customers as well,” she said.

Would a new source of Venezuelan oil alleviate U.S. gas prices?

The Biden White House has spoken to Venezuela in recent days — a longtime enemy of the United States that is rich in oil — signaling a potential thaw in relations. But experts previously told The Washington Post that the South American country would not be able to increase oil production fast enough to have an effect on gas prices right away. Berg said when there is a “shock to the supply system,” and the United States is able to counteract it by sourcing crude oil from elsewhere, it could have a positive impact on airfares. “It would offset the higher prices and would likely improve the ability of airlines to offer low prices,” she said. Mann expressed doubt, however, about the feasibility of that idea, in part because of the poor condition of the country’s oil industry. “It’s hard to know what you’d be buying from Venezuela, or in what quantity, or how reliably,” he said.

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clockThis article was published more than 2 years ago

By The Way

How soaring gas prices are affecting the cost of flights

Plane tickets may already get more expensive, some experts say

By Nathan Diller

March 10, 2022 at 12:48 p.m. EST

5 min

As the cost of gas soars in the United States, travelers hitting the road might find their next road trip is more expensive than they expected. Prices per gallon hit record numbers Wednesday, moving around $4.30 in the wake of Russia’s invasion of Ukraine.

Responses to Russia’s attack have impacted the availability of crude oil, resulting in a stark supply and demand imbalance. But will airfares be impacted, too? Some travel experts said yes, starting immediately, while others said it could take time to see the full impact.

Below, air travel experts analyze what the coming days — and months — might look like.

Spiking gas prices sting drivers nationwide, tapping pocketbooks and patience