When will air fares come down?

Jet fuel prices may have dropped by 16 per cent after months of marching steadily northwards but airlines don't expect the dip to turn into a trend. And this is bad news for you as a flier as airlines are not going to slash fares till jet fuel prices dip over a protracted period.
Three phenomena in the United States may lead to jet fuel prices going up again, affecting airlines' profits and, consequently , your travel bills.
One is Hurricane Gustav, which has already hit refineries in the Gulf of Mexico and has forced many to shut down temporarily ; the temporary dip in supply, say analysts, is sure to prompt oil firms to jack up prices.
The second factor, too, is natural. Winter is approaching and oil prices always go up during this season because of a rise in demand for energy to heat up homes and offices in the US; this, too, will certainly result in prices going up all over the world and will bleed airlines even more, say analysts.
The third factor that may result in hiked oil prices is the impending US presidential election; prices usually go up whenever there is a presidential poll there.
So don't expect any cut in fares. Some airlines, in fact, have predicted a 4 per cent rise.
Besides, jet fuel - despite the 16 per cent dip in prices - is still more expensive than it was in September 2007, say experts; a barrel sold for $ 50 then, the price now is $ 115 a barrel.
02/09/08 Manju V/Times of India

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Categories: Indian Aviation- In General Sep 2008