The price of oil has dropped 20% in two weeks, reaching a low today of $69.27 per barrel, down from an 18-month high of over $87 just a few weeks ago.
This should bring relief to carriers with a focus on cargo, who, for the moment at least, can stop worrying about a return to the days a couple of years ago when fuel prices were making the business uneconomical. At that time, it seemed as if there were only two choices: Charge enough to cover costs and generate a bit of profit — in which case shippers couldn’t afford to move cargo in your aircraft. Or, set rates low enough to attract business — in which case you were losing money on every flight. Either way, the future looked bleak.
We are not foolish enough to try to predict what the price of oil will be next year, or even next week, but for the moment there is one less thing to worry about.