I love a good fare mistake or fare war. Thanks to Frontier coming into SBN and my AMEX buy-one-get-one-free I get to go to Denver at a price I would only (maybe) get with Skymiles. Pittsburgh will become a good friend of mine in November while I bounce around the country for a few days. But what should we expect, on average, to happen to pricing with Delta Air Lines.
There are many sources we can glean some information from as a guide. First, the biggest expense for any airline is fuel. The price of oil went so low last quarter that it actually hurt our airline as they had hedged (i.e. bet) that prices would be going up. Look at where oil is per barrel today:
We are back to $95/barrel and $100 will be a resistance point, but for how long. I am no oil expert but my gut tells me we are more likely to see over or around $100 before we see it break under $90 again.
Let’s look at another interesting tidbit for information. Look at what the Delta CFO Paul Jacobson did recently with his OWN money; yep, he purchased 50,000 shares of DAL (for a cool ½ million dollars). Do ya maybe think he knows something or that he feels DAL is going up (btw yes I know all DELTA jets go up)? That would have to mean he expects the company to have a solid quarter or two moving forward? One way for that to happen is to charge more and have the airline make more money!
Then we have the media. What do they think? Look at:
This piece from USA Today HERE
And this one from the Startribune HERE
But the bizjournals shows the latest bump failed HERE
So, in general, most think we are in for a price move to the upside going forward. Take from this the real and tangible value of Skymiles and points in general. As prices keep going up, your redemption of low level seats are worth more than ever! One of the reasons both my wife and I will continue to do credit card rounds as long as we can. – René
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