Bad news, travelers. Another airline says it doesn't plan to lower ticket prices just because fuel is cheap.
This time the airline is Canada's No. 2 carrier, WestJet. CEO Gregg Saretsky gave the usual answer, telling investment analysts this week that the airline prices tickets based on supply-and-demand, rather than costs.
"Our plan is not to pass any of it on," he said on the airline's fourth quarter earnings call. "If demand stays robust, we will continue the pricing strategy we've had in effect, and we will take the opportunity to improve our bottom line.
Most airline executives have stopped the explanation there. But Saretsky continued by giving some context. He noted that, with the exception of perhaps the last year, airlines haven't historically made great profits. He said now is a good time to actually take advantage of a strong market and return money to shareholders, while investing in the business. In the future, things might not be so auspicious.
"Listen, we're among the best in the airline industry and last year made $15 [Canadian] of profit per guest," Saretsky said. "Our margins are tiny by comparison to every other investment that you might put dollars in. We're trying to be a respectable business. We're going to take the opportunity of the strong demand environment to allow this to go to the bottom line."
Essentially, Saretsky is saying passengers shouldn't hate airlines because all the airlines are trying to do is run a "respectable business."
What do you think? Is he right? Are we too tough on airlines?