Why your airline tickets are more expensive than they used to be

Rising oil prices are a major factor in current airfare costs, but the disappearance of a specific financial strategy is also to blame. This video explains the lost practice of fuel hedging and why airlines abandoned it, leaving passengers to absorb the volatility of fuel markets.

Airlines historically employed a strategy known as fuel hedging to mitigate the impact of fluctuating oil prices on ticket costs. By locking in future fuel prices, companies could insulate themselves and their passengers from sudden market spikes. However, this practice has largely been abandoned.

Without these financial safeguards, airlines are now more sensitive to oil price increases. Consequently, when fuel costs rise, the burden of those expenses is increasingly passed directly to the consumer, contributing to the higher airfare prices observed today.

Source: Your next flight doesn't have to be so expensive. Here's why | The Indicator