Volatile fuel cost sees airfares soar | Northwest Arkansas Democrat-Gazette

Travelers may end up paying high airfares even if oil and jet fuel prices ease, according to major U.S. airlines and analysts. Jet fuel jumped after the Iran war began, fell sharply in spring, and then surged again through summer, with volatility making it harder for airlines to plan schedules and ticket pricing. Brett House, an economist at Columbia Business School, said jet fuel has risen faster than oil due to both higher crude prices and tight supplies of refined fuel, a major airline operating expense. Carriers have cut some less profitable routes and increased fares and baggage fees, while passenger revenue initially covered only part of the fuel hit. The Argus U.S. Jet Fuel Index dropped from $4.88 a gallon in early April to $2.70 in June, yet average fares stayed elevated. Hopper reported recent holiday round-trip averages of $402 for Thanksgiving and $452 for Christmas.