Click to play videoLondon: The Organisation of the Petroleum Exporting Countries could be cutting production for the first time in almost two years. Reports suggest an output cut go be as much as 2 million barrels a day.
So do cheaper crude prices mean good news for airlines and carriers?
When oil prices soared in the middle of the summer, airlines were either scrambling to lock in future oil purchases in fear of $200 per barrel or they were just going bankrupt.
Now, oil prices have fallen to almost half of their peak level from mid 2008 and you would think airlines and passengers would be cheering.
Well, not really. First, the dollar is getting stronger so non-US airlines have to pay more to get those dollars as the currency is used to buy oil.
"The affect we have had in the last few months is while fuel prices come down a bit of course the dollar has strengthened. So one is being offset by the other," says Steve Ridgway, Virgin Atlantic CEO.
The fuel surcharge helped airlines like Virgin Atlantic and British Airways pass the oil spike onto passengers. Airlines have been starting to chip away at those. But not completely since there is no way of knowing where oil is going and since fewer people are expected to fly this winter.
"You have got to remember you are still seeing fuel prices today as something like double what is was only 18 months ago, so input costs are still significantly higher and without getting addition revenue to cover that, be it on baseline ticket fares or fuel surcharges, all airlines are going to feel the pressure," says Deutsche Bank's Chris Partridge.
Another reason why airlines are being tested by lower oil is that many have already agreed to buy jet fuel at levels well above today's spot price.
Southwest Airlines in the US just announced its first quarterly loss since 1991. Southwest reported an accounting loss since the fuel it's agreed to buy in the future dropped in value from $5 billion to $2.5 billion.
So, for this reason and the slowing economies, airlines aren't expected to lower ticket prices. As a fuel crisis has been replaced by an economic crisis.
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