Higher Oil Prices, Demand For Flights May Soon Lead To Rising Plane Fares - 'Lock It In Now'
SAN FRANCISCO INT'L AIRPORT (KPIX 5) – People all over the country have experienced pain at the pump lately. But soon, they may start to experience price hikes when buying plane tickets.
"If oil prices remain at $100 a barrel or higher for a length of weeks or months, yes, we will definitely see an effect on prices," said Willis Orlando, with Scott's Cheap Flights. "Although, there are other factors in the market that may moderate them. But at a certain point, airlines are going to have to decide how much do they pass on to consumers, and how much do they eat in the name of competition."
On Monday, a gallon of jet fuel costed $3.11, according to the Argus Jet Fuel Index. A month ago, it was $2.79 a gallon.
"If we're going to see an effect from the current surge of jet fuel prices, it probably won't be for a few weeks or even a couple of months," Orlando told KPIX 5. "We're already starting to see airlines trim their schedules for the second quarter of the year, which will reduce supply on certain routes which will drive prices up there. But in general, because airlines do buy fuel ahead of time, right now, they're not having to pass that cost down to consumers quite yet."
This likely increase will come after prices were already trending upwards, due to rising demand, says Orlando.
"We've seen average airfares rising, even before the current crisis in Ukraine and jet fuel surge, because demand was coming back so hard and airlines were starting to kind of, adjust pricing for that overall," Orlando said. "Airfare is more expensive than it was a year ago."
At San Francisco International Airport, spokesperson Doug Yakel told KPIX 5 that the airport is getting busier with the omicron wave behind us.
"At the tail end of last year around Thanksgiving and Christmas, we had recovered about two-thirds of our pre-pandemic passenger levels. That slipped to around 50% in January. But by the end of February, we were back up to about two-thirds. So, we really recaptured that activity quickly, as Omicron started to subside," Yakel said.
"For us, one of the big thresholds is the number of people going through our security checkpoints. Right now, a significant number is 50,000 per day. We saw that number several times around Thanksgiving and Christmas, but we're now starting to see that again in the month of March as we get into spring break travel. For us to see our volumes be as strong right now as they would be during the holidays, that's pretty significant. That's definitely saying something," the spokesperson went on to say.
Orlando advises people start planning their trips earlier than they typically would, to avoid paying higher prices.
"Lock it in now, because we don't know how much of an impact these oil price spikes are going to have on airfare in the future, because we just don't know how long they're going to last and how high it's going to go," Orlando said. "If you don't strategize a little bit, especially as prices are on the upswing, you're bound to overpay."
KPIX 5 met Jackie Poling at SFO on Tuesday, who just finished up a trip to visit family. She says she thinks the fuel prices will affect ticket prices for the foreseeable future.
"I think it'll last a while. I went through the gas shortage in 1974, it drags on for a while before anything will even out," she said. "Our children are all out of state. Our next trip would be to Texas. So, when I get home, I need to start thinking about that 3 months ahead and probably buy it as soon as I can secure it."
Another traveler, Albert Huizar, hopes airlines do what they can to keep prices reasonable.
"I'll probably delay a trip if it's not necessary," Huizar said. "We were loyal to them during the COVID time and when they were struggling. And so they've gotta remember the consumer now."