PHOTO: Sen. Charles Schumer (D-NY) is taking airlines to task for not dropping fares as oil prices have fallen. (Photo by Alex Wong/Getty Images)
Airlines are facing more than just criticism for not dropping ticket fares in the wake of falling oil prices.
Now they might be looking at a federal probe.
Sen. Charles Schumer (D-NY) is calling for an investigation into why airline ticket prices haven't been reduced now that jet fuel - the airlines' biggest expense - has also fallen.
"At a time when the cost of fuel is plummeting and profits are rising, it is curious and confounding that ticket prices are sky-high and defying economic gravity," Schumer said in a statement. "So I'm urging the feds to step in and do a price investigation on behalf of consumers who must buy holiday travel tickets that can break the bank."
Schumer wants both the U.S. Department of Transportation and the Justice Department to lead the investigation.
Airlines have been quick to defend themselves, many saying that airfares will drop in the spring when the fuel price contracts they are currently locked into end.
Airlines for America, the lobby group that represents U.S. carriers, noted that from 2000-2013, U.S. Consumer Price Index rose 35 percent, whereas average domestic airfare rose 15 percent.
"Thus, adjusted for inflation, the average round-trip domestic fare fell 15 percent," the trade group said.
Schumer countered by saying that airlines in the past have raised fares when oil prices rose, and said the opposite should be true particularly at a time when airline profits are soaring. U.S. airlines made a $3.1 billion profit in the third quarter, according to the DOT.
"The industry often raises prices in a flash when oil prices spike, yet they appear not to be adjusting for the historic decline in the cost of fuel; ticket prices should not shoot up like a rocket and come down like a feather," he said.
Airlines for America said it goes beyond oil prices and that the airlines are still trying to pay down a combined $72 billion in debt they are holding.
"While fuel prices have abated from their historic highs, fuel is just one cost, and it's important to note that for the first nine months for the nine publicly traded U.S. passenger carriers, operating expenses rose 3.1 percent in 2014," the airline group said, adding that airlines should be treated like every other business. "When the price of coffee beans falls, no one asks Starbucks why his or her latte does not cost less. You want Starbucks to expand its stores and products, give back to its baristas and reward investors. Airlines are no different."
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