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Will Airlines Lower Fees as Oil Prices Decline?

Outraged by the [% 2623262 | | new fees %] for soft drinks, blankets, or checked bags? If the airlines are to be believed, you can blame those and a host of other fees on the spike in jet fuel prices. Indeed, the airlines have relentlessly used the high price of oil to justify the torrent of nuisance fees.

But that logic may now be coming home to roost. Having accepted the airlines’ claim that such a linkage exists, consumers naturally wonder if it works both ways. In other words, can travelers expect that the fees will abate when oil prices decline? And if so, when?

That’s a question the airlines may be forced to confront sooner rather than later.

After peaking at around $147 a barrel in July, oil prices are down more than 20 percent. In a J.P. Morgan analyst report cited by MarketWatch, the falloff in fuel costs is deemed nothing less than monumental: “This represents both the most rapid and most significant expense savings ever realized for the airlines, standing well in excess of any historic precedent for demand weakness.” As a result, the report upgrades several airlines’ earnings prospects, and, more significantly, suggests that the industry as a whole could return to profitability by the end of 2009.

This is all good news for the airlines, and for those who own stock in the airlines. But travelers wonder, rightly, whether the airlines’ good fortune will benefit them, and in particular whether it will mean less nickel-and-diming. Or is a la carte pricing here to stay?

Together with millions of other flyers, I’ll be watching. And while I’ll be hoping for the best, I’m prepared for the worst—which in this case is more of the same.

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