Do lower oil prices mean cheaper airline tickets?

Many airlines' stock prices and profits have soared over the past few months due to extremely low prices in crude oil. According to Forbes, the global cost per barrel of crude oil has dropped from nearly $100 in September 2014 to around $50. This decline has led to the highest revenues in history for major airlines, which expect to reap record profits in 2015. So what does this mean for travellers?

Lower fuel costs don't mean lower prices
The New York Times reported that the four major U.S. airlines – United, Delta, Southwest and American – are projected to net the highest profits in each company's history. The drastic decrease in oil prices has allowed airlines to save billions on fuel costs. CNN estimates Delta alone will save more than $2 billion.

Despite the savings, ticket prices and other travelling fees will remain the same.

"While (the cost of jet fuel) has been a nice tailwind in the fourth quarter," Brad Tilden, chairman of Alaska Airlines pointed out to USA Today, "several of you have asked us if we are pricing to account for the lower fuel prices. … The answer is no."

So why are airlines refusing to share the wealth? Primarily because they are preparing for the inevitable. The sharp decrease in fuel costs was rather abrupt, and will likely disappear within the next year.

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