The link between crude oil prices and airfares

Crude oil prices spiked when the US-Iran conflict began late February, sending jet fuel costs soaring even more sharply. But here's what the FRED Blog found: airfares barely moved. Airlines typically purchase jet fuel through contracts that lock in prices months in advance, protecting them from sudden spikes. Additionally, fuel represents only twenty to thirty percent of airlines' operating expenses, so crude-driven increases don't immediately translate to higher tickets. If crude and jet fuel prices remain elevated, though, the picture for airfares could shift.

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