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Small airlines survive another fuel hike and drop

November 22, 2018

The price of oil dropping to early 2009 levels has posed a challenge for many airlines working to maintain their bottom line — and at least one aviation company operating in Douglas County is no exception.

Crude oil prices dropped $20 from the beginning of October to the current $55.41 per barrel, but general aviation companies, like Western Wings Corporation based at Roseburg Regional Airport, are still paying high fees and high gas prices.

“Fuel cost is the most major cost you have while you’re flying,” owner Bill Woods said. “Even in a private jet, it will represent at least 25 to 40 percent of the cost of flying. All the other costs are fairly well known and they’re stable, but you’re fuel cost is a fluctuating one that runs your cost up so quickly.”

According to the Wall Street Journal, more than 20 small airlines have gone out of business around the world this year, with airlines citing rising costs as the reason for closing.

Fuel prices have been climbing gradually since the beginning of 2016 when prices were at a low of $35.69 per barrel and peaking at $75.30 in October. The $20 decrease is the steepest drop since 2016.

Western Wings manages between 50 and 100 flights per year, Woods said While the company curtailed as much as it could during the fuel price spikes in 2008, the company generally has to pass on the cost to their customers.

“We don’t have the buying power or the financial wherewithal to buy millions of gallons at a time so we’re at the mercy of what we pay for fuel,” Woods said. “If we are going to make an intermediate stop strictly to refuel, we’ll choose an airport with cheap fuel, but most of our trips require us to go to Dallas or Atlanta, because that’s where the clients are.”

Because the major airline carriers like Delta, American, Southwest, and United not only have schedules months in advance and repeatedly stop at the same airports, they are able to design contracts to get the best deals on fuel.

According to Airnav.com, which tracks fuel prices, smaller, more rural airports tend to have cheaper fuel while airports which have more traffic have higher fuel prices.

“The fuel market is volatile and it’s based on season,” said an employee at Roseburg Regional Airport. “What season it is determines what your rates are going to be and how they are going to go down. Aviation fuel follows the same trend as car fuel.”

Western Wings and other small airlines survived this cycle of unpredictable fuel costs, ready to enjoy the reprieve of low prices until the season changes again.

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