Spirit Airlines CEO Ben Baldanza was one of several airline CEOs to sound off on shrinking fuel prices.
If you’re like me and making winter escape plans for March, you may be wondering why airline ticket prices are still so high even though the price of oil has dropped to a six-year low ($50 a barrel). The answer may not surprise you in the least.
It’s actually a multifaceted situation which isn’t entirely about airline greediness, though based on airline CEOs’ recent comments, compiled by Quartz, it’s a key factor. Naturally.
Delta’s Richard Anderson takes a pragmatic business stand, with a hint of bottom line glee.
“… over the very long-term horizon, it’s just more conservative and prudent to use a high fuel assumption when you’re buying airplanes or making other investments, and then when it comes in lower, hang on to all of it.”
Southwest’s Gary Kelly says they’re just looking out for the poor passengers’ feelings.
“What I would not want to do to customers is take them through the same volatile ride with fares, lowered in one day, raised in the next day, I think that that would be absolutely the worst thing that we could do when we have absolutely no plan to do that,” in reference to the roller coaster prices before and after the 2008 oil price spike.
Spirit Airlines’ B. Ben Baldanza unsurprisingly doesn’t try to conceal their happy-dance profiteering.
“…as long as demand stays strong, as we see it right now, we believe that, that will—we can—we’ll take good advantage of that in the pricing environment as well.”
In the meantime, as beleaguered travelers continue to contemplate low-season airline tickets that would have been considered outrageous for peak season travel not long ago, it may be high time to consider going back to basics and make that winter vacation a road trip.