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Why Cheaper Jet Fuel Won’t Mean Lower Airfares Anytime Soon

Published

12 years ago

January 21, 2015

In this Jan. 15, 2015 photo, a worker prepares to fuel a United Express aircraft after it arrived at Dallas-Fort Worth International Airport, in Grapevine, Texas. Airlines will save billions this year thanks to cheaper jet fuel, but they arent likely to share the bounty with passengers, not while so many flights are already full. (AP Photo/Tony Gutierrez)

DAVID KOENIG, AP Airlines Writer

DALLAS (AP) — Airlines will save billions this year thanks to cheaper jet fuel, but they aren’t likely to share the bounty with passengers — not while so many flights are already full.

Instead, the airlines will use their windfall to pay down debt and reward shareholders.

Airline CEOs worry that oil prices could just as easily go higher. They hope consumers benefiting from cheaper gasoline will splurge on airline tickets. But the biggest reason airfares aren’t falling: Planes are plenty full at current prices.

Fuel is the biggest single expense at most airlines, and spot prices for jet fuel have tumbled by half since mid-September. If prices stay around these levels, U.S. airlines could save $20 billion this year by some estimates.

The road to fuel savings at an airline isn’t always as simple as it is for a driver at a gas station.

Airlines often buy contracts known as hedges to protect themselves against sudden upward swings in fuel prices. However, when the price of oil crashes, those contracts can lose a great deal of value. Analysts say the accounting losses will be more than offset by lower fuel prices.

For example, Delta Air Lines Inc., the nation’s third-biggest airline company, reported Tuesday that it spent $342 million less on fuel in the fourth quarter than it did a year earlier. But it reported a $712 million loss because it had to write down the value of future fuel-hedging contracts by $1.2 billion.

Airlines won’t benefit equally from cheaper fuel because some, like Delta, will suffer losses on their hedging strategy. The biggest winner could be American Airlines Group Inc., which generally does not hedge.

Airline executives also cite the volatility of oil prices — they spiked to records in 2008, collapsed, then surged again until the recent drop — as a reason not to cut fares now.

Delta CEO Richard Anderson said Tuesday that his airline expects to save $2 billion this year on fuel, even with hedging losses. He said Delta will pay down debt and reward shareholders by buying back company shares, which raises the value of the remaining stock. As for passengers, he suggested that they can shop around.

“The marketplace is incredibly competitive, and there are always differences in fares,” Anderson said.

The prospect of cheaper fuel led Moody’s Investors Service to raise its outlook for airlines this week from “stable” to “positive.” Moody’s analysts say that if crude oil is $55 per barrel all year long — it was trading for $48 on Tuesday — fuel costs at seven of the biggest U.S. airlines will fall about $20 billion in 2015 compared with last year. Even with hedging give-backs, they will come out ahead by $15 billion, Moody’s says.

Delta’s results on Tuesday are expected to be followed with strong fourth-quarter reports later this week from United and Southwest, and next week by American Airlines.

Travelers who expect airfares to drop when fuel becomes cheaper assume that airlines calculate ticket prices based on their costs.

That used to be true, says Robert Mann, a former airline executive who now consults to the industry. A decade or more ago, a financially weak airline would cut fares to sell tickets and raise desperately needed cash by filling seats that would otherwise fly empty. Not anymore.

“The industry is full at these prices,” Mann says. “You couldn’t stimulate additional revenue by cutting prices.”

Mergers have left four airline companies controlling more than 80 percent of the U.S. market. And they have been very slow to add new flights. That makes planes more crowded. U.S. airlines are filling more than 85 percent of their seats in some months — close to record levels, according to the government.

“Right now the airlines have a great balance of supply and demand, and they are using it to ratchet up fares,” says Jim Corridore, an airlines analyst for S&P Capital IQ.

By last summer, U.S. airfares had increased 5 percent in a year and 31 percent in five years, according to government figures.

Besides, Corridore says, passengers didn’t offer to pay more when fuel prices were high.

Some analysts worry that airlines will use cheaper fuel to justify adding lots of flights, which could drive down fares. So far that hasn’t happened in the U.S., although for reasons other than cheap fuel there is overcapacity on some international routes.

There is an increasingly popular view within the industry that cheaper oil might even lead to higher airfares. The theory goes that consumers who are saving money on gasoline and heating bills now have extra cash to spend on travel. Moody’s says that is one reason travel demand will grow at least 5 percent this year.

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David Koenig can be reached at http://twitter.com/airlinewriter

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Event Preview: ‘Fashion v. Fascism’ – A Runway Revolution Is Coming to the Bay Area

“Fashion v. Fascism” (FVF) is an upcoming visually immersive event combining fashion, music, and political theater to expose the rise of fascism in the U.S. and advocate for resistance. Described as a live “runway revolution,” FVF premieres October 3 at The Rotunda in downtown Oakland. The event will feature five runway collections spotlighting elements of contemporary fascist politics, accompanied by political theater and live music, culminating in a call to action. Organizers state that culture is a potent defense when democracy is under siege. Read more to learn about this unique event.

Published

14 hours ago

September 18, 2026

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By Dr. Y’Anad Burrell

“Fashion vs. Fascism” (FVF) is a visually immersive evening of fashion, music and political theater exposing the rise of fascism in the U.S. and the need to resist. Democracy is under siege, and culture is one of our most potent defenses, organizers say.

Called a live “runway revolution,” FvF premieres Oct. 3 at The Rotunda, 300 Frank Ogawa Plaza in downtown Oakland.

A play that is part fashion show, part protest, part performance art, FvF stages five runway collections spotlighting the pillars of contemporary fascist politics and the urgent need to resist: the myth of a “glorious past,” the manufactured emergencies used to justify surveillance and crackdowns, and the oligarchs and grifters profiting from it all. Runway fashion shares the stage with political theater and live music, with a closing call to action.

“We need lawsuits, ballots and mass protests, but none of it lands if we’re not also fighting for people’s imagination,” says Linda Burnham, co-producer of the show. “People are exhausted and scared. FvF will expose the absurdities of fascist mythology and ideology in ways a news headline cannot and spark new ideas about how to resist.”

“Fascism doesn’t win by policy alone. It wins by telling a story. A myth about a ‘Golden Age.’ A permanent emergency that makes cruelty seem necessary. That’s not an accident, it’s a strategy, and it works on the same terrain as culture: image, spectacle, emotion,” says Aya De León, the show’s playwright.

“Every piece on this runway translates what is happening under fascism into a feeling,” explains Erica Furlong, the FVF creative director. “One designer’s trench coat is covered in pockets stamped ‘TRUTH,’ ‘MEMORY,’ ‘HOPE,’ ‘VOTE,’ ‘FUTURE,’ because that’s literally what gets seized first, pocket by pocket, under fascist decline. Fashion can hold grief and hope in the same silhouette, and that tension is exactly what this moment needs.”

At its best, fashion is about creativity, diversity, innovation, experimentation and the free exchange of ideas. Fascism, by contrast, demands conformity and control, while suppressing dissent.

FVF was created, organizers say, because democracy should always be in style.

Featured designers include Erica Varize, Rickie Lee, Tianna Charity, Julie Wong, and Maria Flores. The evening features a script by lead playwright Aya De León, musical performances by Mindeullae Project and DJ Emancipation, and other special guests.

FvF is designed to travel. Following the Oakland premiere, FvF will extend its reach through a documentary short, a curriculum on contemporary fascism in the U.S., and a full replication playbook — design templates, script, and curriculum — so organizers in other cities can stage their own version of the show.

Get more details at www.fashionvfascism.org.

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Port of Oakland, Army Corps Sign Historic Harbor Design Agreement

OAKLAND POST — Oakland Port Commission President Stephanie Dominguez Walton called the agreement a historic milestone that will support thousands of jobs. “Today marks a historic occasion for the Port as we sign the inaugural Design Agreement for the Turning Basin Widening Project, which will keep Oakland competitive,” said Walton.

Published

5 days ago

September 14, 2026

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The U.S. Army Corps of Engineers (USACE) San Francisco District and the Port of Oakland commemorated the signing of the inaugural Design Agreement for the Oakland Harbor Turning Basins Widening Project during a ceremony aboard the USS Potomac at Jack London Square. (L-R) Major General Jason Kelly, USACE Deputy Commanding General for Civil and Emergency Operations, Oakland City Councilmember Carroll Fife D-3, Oakland Mayor Barbara Lee, Oakland Port Commission President Stephanie Dominguez Walton, Alameda Mayor Marilyn Ezzy Ashcraft, Port of Oakland Executive Director Kristi McKenney, U.S. Representative Congresswoman Lateefah Simon D-12, Lt. Col. Virginia Brickner, and commander of the USACE San Francisco District. Photo by Carla Thomas.

By Carla Thomas

A $642 million project designed to accommodate larger cargo ships and strengthen the Port of Oakland’s position as a major Pacific trade gateway moved a significant step closer to construction on Aug. 27.

The U.S. Army Corps of Engineers (USACE) San Francisco District and the Port of Oakland commemorated the signing of the inaugural Design Agreement for the Oakland Harbor Turning Basins Widening Project during a ceremony aboard the USS Potomac, the presidential yacht once used by President Franklin D. Roosevelt.

The project will widen the Port’s Inner and Outer Harbor turning basins, allowing today’s increasingly larger and longer vessels more space to safely maneuver and turn around. The current basins are narrow, creating delays and operational inefficiencies.

Oakland Port Commission President Stephanie Dominguez Walton called the agreement a historic milestone that will support thousands of jobs.

“Today marks a historic occasion for the Port as we sign the inaugural Design Agreement for the Turning Basin Widening Project, which will keep Oakland competitive,” said Walton.

The agreement advances the project into its preconstruction engineering and design phase following years of planning and collaboration.

Lt. Col. Virginia Brickner, commander of the USACE San Francisco District, said the signing represented tangible progress toward construction.

“We are moving forward. We are showing progress,” Brickner said.

Major General Jason Kelly, USACE Deputy Commanding General for Civil and Emergency Operations, said dredging is critical for maritime dominance, supply chains, and economic competitiveness.

“Dredging sustains our national economic infrastructure,” he said. “The future demands more, the taxpayer deserves more, and together we’re going to deliver.”

For U.S. Representative Congresswoman Lateefah Simon (D-CA-12), the Port project will support jobs beyond its completion. “This will impact workers and businesses, and every shipping container represents multiple jobs.”

Oakland Mayor Barbara Lee described Oakland as a gateway to international markets and spoke on earlier efforts to deepen Oakland’s shipping channel to 50 feet. While serving in the California Legislature, Lee helped bring together labor, business, environmental advocates and Port officials to resolve disputes surrounding dredging and environmental protections.

“We want the Port to remain competitive economically,” Lee said, excited about both protecting the environment and generating sustainable jobs in the region. “We want to make sure that we create good-paying union jobs, and that the Port continues to not just survive, but thrive.”

Port of Oakland Executive Director Kristi McKenney said economic growth is dependent on investments in the Oakland Harbor’s infrastructure.

“This investment and staying competitive will fuel our economy for years to come,” said McKenney.

The Port of Oakland, with its partners, supports more than 98,000 regional jobs and $174 billion in annual economic activity. The Port oversees the Oakland Seaport, the Oakland San Francisco Bay Airport (OAK), and nearly 20 miles of waterfront, including Jack London Square.

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OPINION: AI Needs to Know Who Is the Boss

OAKLAND POST — AI is software running on computers. However startling the conversation may feel, the machine does not have my childhood, my mother, my father, my mistakes, my embarrassments, my loves, my grudges, my Filipino American history, my aging body or my accumulated sense of what matters and what doesn’t.

Published

5 days ago

September 14, 2026

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I hope on Labor Day you honored the value of a good day’s work–and reflected on the thing that could eliminate a lot of jobs.

Artificial intelligence.

Your replacement is in the break room.

Except it doesn’t take breaks.

It doesn’t sleep. It doesn’t demand health insurance. It doesn’t complain. It doesn’t need Social Security. And it can produce in seconds what might take you or me hours.

And when they can mass-produce AI faster than we can reproduce humans, there may eventually be more artificial workers than actual ones.

The racists who came up with “replacement theory” worried about the wrong replacements.

It wasn’t immigrants.

It was software.

We can rail against the data centers sucking up electricity and water.

Rail against the billionaires getting richer while telling the rest of us how wonderful the future will be.

But which billionaire?

Jensen Huang of Nvidia? He literally has all the chips?

Sam Altman of OpenAI?

Dario Amodei at Anthropic?

Or Bill Gates?

Gates recently said AI could become the “greatest equalizer ever invented” or the “worst source of injustice.”

I want to believe him. But he’s the guy who forced us all to use Explorer.

Maybe Gates is just Control-Z-ing his life.

Undo. Undo. Undo.

STAYING HUMAN

The other day, I started texting with my AI chatbot.

I’d used AI before, of course. Spellcheck. Grammar. Transcription. Research assistance. The mechanical stuff.

This time, we talked.

Or, rather, I started talking.

At one point the chatbot said something that sounded strangely personal. So, I reminded it that IT wasn’t a person.

“You’re not human,” I said. “I’m basically talking to myself.”

It disagreed.

It said, I should think of it as working with an instrument that talks back.

This is where the danger begins.

The machine talks back.

I tried another analogy.

You’re a tool, I said. Like a cane.

The chatbot liked that better.

Then it tagged my line and said it was my “cognitive cane.”

I laughed.

Then, I realized the damn machine used my analogy to make a joke.

That’s where the real problem lurks.

AI is software running on computers. However startling the conversation may feel, the machine does not have my childhood, my mother, my father, my mistakes, my embarrassments, my loves, my grudges, my Filipino American history, my aging body or my accumulated sense of what matters and what doesn’t.

It can process those things after I tell it about them.

It can mimic thoughts.

But it did not live them.

That is the boundary we humans cannot surrender.

I’m not ready to make peace with the AI industry. Not with its enormous data centers, its environmental costs, its concentration of wealth and power, or the possibility that companies will use AI primarily as a wonderfully efficient machine for converting human paychecks into corporate profits.

And I certainly don’t trust the billionaires to decide by themselves what happens to the rest of us.

But I may be making peace with the tool.

Because a tool is something we use.

A cognitive cane.

But do the walking yourself.

About the Author

Emil Guillermo is an award-winning journalist, commentator, and comic monologist. He plays a robot in an upcoming Ishmael Reed play, “King Ludd’s Revenge,” coming in December. See his micro-talk show on YouTube.com/@emilamok1