Originally Posted by
rjque
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.
Indeed. Perhaps the bigger effect of higher and lower fuel prices is changes in capacity and routes flown. The price of fuel may not necessarily affect the revenue-maximizing fare price, but it certainly affects which routes are profitable and which are not.