[Svartalfiar]

Have lower oil prices led to lower priced air fair yet? Belief in a permanent reduction in fuel prices will lead to many changes including new aircraft purchases by the airlines.

Actually, that's not true at all. I work in AV, and we've done some shows for different aviation groups (just did a big mro convention), with many repair companies, airlines, and aircraft manufacturers giving presentations. Cheap oil helps them in terms of short term profit, but aircraft purchases don't correlate to oil prices at all. They are actually more in line with US gdp and similar factors. Aircraft purchases are generally planned 3-5 years in advance, and oil prices are a tiny fraction of the formula they use.

Airfare, however, is something that should more accurately follow oil prices. Prices may not come down much (people are used to certain prices, might as well increase profit margins a bit), but you generally tend to see more deals or short-term cheap flights.

[ChessExpert]

Thanks for the comment.

“Airfare, however, is something that should more accurately follow oil prices. Prices may not come down much (people are used to certain prices, might as well increase profit margins a bit), but you generally tend to see more deals or short-term cheap flights.”

More deals and cheap flights, and lower fares later, will presumably lead to increased ridership and flights. Wouldn’t that eventually lead to more aircraft orders? You are right to mention lead times, so I imagine it might take a few years.

This argument is based on a permanent lowering of fuel prices. I’m sure a lot of people are taking a wait and see attitude on that.