Sen. Schumer urges probe of high air fares
Sen. Charles Schumer has questioned why air travelers are yet to see any drop in airfares despite plunging oil prices.
The New York Democrat wants the Department of Justice and the Department of Transportation to take a close look at the industry and see why lower fuel costs haven’t translated into lower ticket prices yet.
Schumer says the high cost of air travel is painfully apparent for thousands of travelers heading home for the holidays.
He called out the ‘rapidly declining’ fuel costs and ‘record’ airline profits which are set to grow by 26% next year to $25 billion.
"The industry often raises prices in a flash when oil prices spike, yet they appear not to be adjusting for the historic decline in the cost of fuel; ticket prices should not shoot up like a rocket and come down like a feather," he said in a statement.
Since June oil prices have fallen 40% to about $60 a barrel.
IATA says jet fuel makes up about 26% of airline operating costs on average and expects air fares to drop by over 5% over the next 12 months.
"It’s going to be six months or so before airlines are seeing lower fuel costs, and at that point consumers are likely to see a fall in travel costs," said IATA chief economist, Brian Pearce, citing that many airlines are still committed to long term fuel hedging contracts.
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Editor for TravelMole North America and Asia pacific regions. Ray is a highly experienced (15+ years) skilled journalist and editor predominantly in travel, hospitality and lifestyle working with a huge number of major market-leading brands. He has also cover in-depth news, interviews and features in general business, finance, tech and geopolitical issues for a select few major news outlets and publishers.
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