Originally Posted by
SFflyer123
While I think you're right that competition is much more of an indicator, you cannot discount oil prices:
"As Richard Branson, chairman of the Virgin Group told CNN Business Traveller on this month's show, Virgin Atlantic's annual fuel bill has risen from £250 million three years ago, to £1.4 billion this year.
The only way to survive the increase, he says, is to pass the cost onto the consumer."
http://www.cnn.com/2008/BUSINESS/06/...ces/index.html
Airlines like to play up the influence of oil costs because it is a factor outside of their control (and therefore a reduced PR hit for price increases). While oil costs certainly influence price increases across all airlines, a drop in oil prices does not mean an airline will automatically reduce fares. A responsible corporation keeps the price as high as the market will bear and just keeps the windfall created by decreased costs.
Of course, this could all be irrelevant - didn't United hedge at some ridiculously high price?