Gulf Oil Spill Effects on Airline Ticket Prices

It seems like every media outlet has become the 24 hour “Gulf Oil Spill” network.

So why should I be any different?

I, for one, am curious about the effects of the gulf oil spill on domestic airline ticket prices which have notably been quite firm for summer travel (not hard to be more than last years decade lows).

Are air travelers changing their plans to gulf cities as the downbeat news continues day after day?

Not to mention the potential downstream effects on the local tourism economy in these popular gulf city destinations.

One way to get some insight into this devastating event is by going inside the numbers. A quick data pull from our proprietary worldwide database of historical airfare is one of my favorite ways to get a feel for pricing trends and as you’ll see shortly shed some light on recent flight trends to a popular gulf city.

The following chart, shows a year over year comparison of the average cheapest roundtrip airline ticket prices to New Orleans from the top 50 U.S. cities (by airport size):

Average Cheapest Roundtrip Airline Ticket Prices to New Orleans

First, you’ll notice that ticket prices are up dramatically to New Orleans (about 35%) for the first 4 months of the year compared to last year’s decade lows. This is a national trend (nationally about 15%) as demand for air travel has perked up over the past 5 months and airlines are reticent to add back seats they removed during the fuel and recession crises in part because of fears of a double dip recession.

More recently their has been a pretty significant dip in airline ticket prices to New Orleans (over the last 10 days) which is certainly eyebrow raising. Typically sales (there have been very few for summer travel) have only lasted for a few days, which probably accounts for the volatility in the recent price drop trend.

If this trend continues for a few more days, it certainly tracks with the premise that demand could be waning.

Last night i saw some odd discounting to Atlantic side coastal locations like Daytona and Melbourne Beach — going to keep an eye on this new trend as well.

The bottom line is that conditions are fluid and at least for the moment the trend is down, which isn’t a good sign for coastal cities — the good news is that many purchased early this year, let’s hope things get better and everyone stays with their plans.

NASA image (April 27) courtesy the MODIS Rapid Response Team

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Published: May 26, 2010