Why are cheap gas prices good?
That's an easy one. Everyone who buys gas for their cars already knows why cheap gas is good. It means immediate extra cash in your pocket. Instead of paying $50-$60 to fill up, you're paying $25-$35. That's big savings!
What can possibly be bad?
For one, layoffs in the oil industry. These are just three examples of that happening today:
- More Oil Industry Layoffs In Oklahoma
- Three More Energy Companies In Texas Warn of Layoffs
- BP Cuts Jobs In Houston Due To Low Gas Prices
Many airlines won't be dropping ticket prices. I called this late last year in one of my blogs:
If they are consistently over 80% capacity on domestic flights (with that number likely to rise), why would they lower their prices if they can lock in more profits. I mean, even when it seems airlines are nickel and diming us out of the nose - guess what? We're still buying up tickets! Business is good. If I were a CEO I wouldn't lower ticket prices. I don't need to.
Skift is quoting Doug Parker (American's CEO) as saying, "When demand drops you will see pricing move accordingly."
What's the takeaway here?
That one's simple. Read my blog and you'll know what'll happen next month :)