To combat the cost of escalating oil prices, some smaller airlines already are starting to cut back on the number of flights. Allegiant Airlines, a lower-cost airline, told Bloomberg News that it will trim its flights by up to 10 percent during the first half of 2022. Meanwhile, Alaska Airlines has similar plans, but probably will keep it around 5 percent.
How Rising Oil Prices Impact Airlines
- At least two airlines are trimming the number of daily flights to help offset the cost of higher fuel.
- Some airliners burn 5 gallons to fly one mile. A 10-hour flight may need 36,000 gallons.
- It remains to be seen whether airlines will add surcharges or increase cost of tickets.
Airlines are consumers of gas, too. So if you’re feeling the pinch when you fill up your 16-gallon tank, imagine the cost of a jetliner. A Boeing 747 gets hideous gas mileage, burning five gallons of fuel to fly a mile. So if you’re flying from Dallas to Paris, the jetliner may burn 36,000 gallons.
To start 2022, the cost of jet fuel for airliners in the United States was $5.29 per gallon.
Airlines really have only two choices to contend with higher prices. They can cut back on flights of charge more. One expert predicted airlines could add more surcharges to the price of a ticket. But if the ticket prices get too high, an industry that was devastated by the pandemic may suffer more if customers decide to vacation closer to home. At 4.5 percent, airline capacity dropped the most in North-East Asia. in the week to Monday dropped 4.5% from the previous week, more than any other region,
The New York Post reported that global airline capacity dropped slightly this week — by 0.1% — or about 82 million seats. For context, that’s 23 percent below 2019 figures, the last year not impacted by the pandemic.
There was a glimmer of good news for consumers Wednesday afternoon. The price of oil was dropping, with decreases flirting with a double-digit decrease. Of course, oil prices are volatile right now. Oil prices have risen more than 26 percent during the last month. Meanwhile, gasoline was trading at $3.29 per gallon. These prices are increased 63 percent over the past 12 months.
Earlier this month, an analyst predicted oil prices could hit $150 a barrel because of the Russian invasion of Ukraine. Daniel Turner, the executive director of Power The Future, told this to Fox Business’ Maria Bartiromo on her Mornings with Maria show.
On Tuesday, West Texas Intermediate crude, which is the U.S. benchmark for oil prices, hit $128 a barrel. Brent crude, the international benchmark, got to $132 a barrel.
Here’s what could happen now that the U.S. has imposed oil sanctions on Russia. The prices could go higher. But the country already had cut back on Russian oil. According to ABC, data from the U.S. Energy Department shows that imports of Russian oil dropped to zero in the final week in February.