In article ,
Dallas wrote:

Why didn't rental rates come back down with the price of fuel?

Renters saw major increases in rates during the fuel price run up. After
the oil bubble burst my FBO dropped their rates a tiny fraction as the
price of fuel dropped back down to where it used to be. When I asked what
was going on the chief pilot explained that they call around to other FBOs
and their price is competitive.

I called around and found that he was correct, everybody's price is still
up. I also ran a quick study from their online booking system and found
that their rentals were down 60% in December and 54% in January.

My comment to the chief pilot was that airplanes sitting on the ground
aren't doing anybody any good. He ignored me.

So what is going on? Is there some invisible expense increase at FBOs
that's keeping their prices up or do they not understand the laws of price
and demand?

At least some of the small operators out here have been in the hole for
quite a while, and they've been effectively "floating a loan" for
renters. When the fuel prices coming back down, their fixed costs
weren't coming down at the same time. If they could get caught up a bit,
they could start bringing their rates down after a delay, but when the
economy dived, that wasn't going to work as people just quit renting and
taking lessons, in some cases because they'd lost their jobs.

It's been a marginal business at the best of times for a lot of them,
and they're succumbing now.