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?


This is no different that when oil futures go up, gasoline in the ground
skyrockets up immediately to pay for the new gasoline that will be
coming in. When the oil goes down, you do not see the gasoline go back
down as quickly. Even when the oil and gasoline reserves were getting
larger. If you are willing to pay it they will charge that much.

--

Regards, Ross
C-172F 180HP
Sold
KSWI