Holiday Travel Outlook: Cheaper Fares And Scarier Drones
Cheaper jet fuel prices are starting to translate into lower airfares, which may begin prompting infrequent fliers to plan holiday travel.
And cheaper technology may be turning drones into affordable Christmas presents. In fact, one FAA official says a million new flying robots may be under Christmas trees this year as a result of price drops.
Now let's add that up and consider what it could mean for the last week of December:
Inexperienced travelers will be crowding airport security lines. And a million inexperienced operators will be sending up drones.
Ho, ho, ho. What could go wrong?
Such issues were discussed Monday at an annual aviation summit, sponsored by Airlines For America, in Washington, D.C.
The gathering turned up the good news for passengers on fares. But it also raised worries about the proliferation of drones. First, the drone concerns:
"The talking point is that there will be a million drones under people's Christmas trees this year," said Rich Swayze, the FAA's assistant administrator for policy, international affairs and environment. He said that estimate comes from several sources who are studying the potential impact of drone hobbyists.
Swayze said that in advance of the holiday sales push, FAA representatives will confer with Wal-Mart officials regarding having sales staff inform consumers about drone safety. "A lot of people who don't have a pilot background are operating these things in the airspace," he said.
Speaking on the same panel, Hawaiian Airlines CEO Mark Dunkerley said the prospect of a surge in drone sales is "a very serious issue — and there's considerable concern that it's going to end in tears."
U.S. Rep. Peter DeFazio, D-Ore., the highest-ranking Democrat on the House Transportation and Infrastructure Committee, said "a lot of what pilots are seeing is irresponsible use of toys. The toys, in my opinion, should be set up so they can't be sold unless they're geo-fenced for altitude and perimeters."
Although Christmas is fast approaching, Swayze says the industry and government still have many drone-related issues to sort out, involving air safety, personal privacy and even national security.
Aside from those worries, the conference turned up encouraging news for travelers.
"Fares have come down," thanks to cheap oil, said Andrew Davis, an airline analyst with T. Rowe Price. In early summer of 2014, oil was selling for around $100 a barrel. Lately, it has been around $45. "I don't think oil going into the $30s is crazy," he said.
The oil price plunge has been allowing airlines to buy jet fuel for roughly half what they were paying in early 2014.
So far, that price change has mostly translated into bigger profits for the airlines. But now that the summer travel season is over, fuel bargains finally are starting to trickle down, at least in competitive markets.
"We're in a virtuous cycle," where cheaper fuel is starting to turn into lower fares, which is encouraging travel, which is boosting profits, Davis said. "It's a good thing."
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