The American Way 22 / 24 ProPublica Justin Elliott 4 days ago © Provided by ProPublica Three years ago, the Obama administration unleashed its might on behalf of beleaguered American air travelers, filing suit to block a mega-merger between American Airlines and US Airways. The Justice Department laid out a case that went well beyond one merger. “Increasing consolidation among large airlines has hurt passengers,” the lawsuit said. “The major airlines have copied each other in raising fares, imposing new fees on travelers, reducing or eliminating service on a number of city pairs, and downgrading amenities.” The Obama administration itself had helped create that reality by approving two previous mergers in the industry, which had seen nine major players shrink to five in a decade. In the lawsuit, the government was effectively admitting it had been wrong. It was now making a stand. Then a mere three months later, the government stunned observers by backing down. It announced a settlement that allowed American and US Airways to form the world’s largest airline in exchange for modest concessions that fell far short of addressing the concerns outlined in the lawsuit. The Justice Department’s abrupt reversal came after the airlines tapped former Obama administration officials and other well-connected Democrats to launch an intense lobbying campaign, the full extent of which has never been reported... http://www.msn.com/en-us/travel/news/the-american-way/ar-BBxhzPQ?li=BBnb7Kz
The decline was deregulation which democratized air travel. The recent increase is oligopolistic (or I'm sure in their internal documents: stable) markets. Prices are higher than 2007 where oil was almost 3x the price. While I'm not sure about the airline industry specifically: wages have stagnated since then as well.
Prices are not much higher then 2007 and in some cases lower. Flying is route dependent. Some flights are cheaper, some are more expensive.
From your chart it's materially the same or as much as 30percent higher while their largest input: oil is down 70percent. Further I don't know if the chart accounts for the trend of additional fees which became envogue since 2007. The reduction of capacity (some of which was due to the recession) but mostly from Mergers has allowed prices to stay at best flat and often higher when input cost reductions would have otherwise been passed to the consumer.
Don't make the mistake of confusing oil prices with jet fuel prices. Jet fuel is only marginally cheaper then in 2007. I've attached the price chart of gulf coast jet fuel from jan 2007. In 2007 it was about 1.60 and most recently 1.49 on 10/9 in the chart.
https://fred.stlouisfed.org/ The first two charts were just from google. Not always the best thing to do so I went straight to the real data at the St. Louis Fed.
The graph still shows how the market has gotten more expensive. You have to infer it from the data as other moving parts obfuscate the reality. In 2011, airfare was approx. 305 and jeta was approx. $3. Today jeta is around 1.6 (per your chart) and airfares are down about 5% to 290ish. We should probably ignore the last datapoint because it seems like an outlier. When you take your same airline fares data further back, (same source) airline fares were approx. 240ish in 2007. Today they are 295ish. And in 2007 jet fuel prices (again from FRED) were around $2 then and 1.3 today. There's no doubt relative to input costs fares have gone up and the only qualitative change in the US is capacity has been taken out through mergers. It's also no surprise that airlines are earning record profits as this trend was formed. https://fred.stlouisfed.org/series/CUSR0000SETG01 https://fred.stlouisfed.org/series/WJFUELUSGULF