How Do Foreign Exchange Rates Impact Airline Ticket Prices & Success?

Foreign exchange rates, or the value of different currencies in comparison to each other, are often overlooked as a major macroeconomic indicator that has an impact on air travel demand. Overall, economic growth, real wages (and, as a result, disposable income), consumer confidence, and interest rates have all historically been factors that have impacted the financial success of airlines. Even more important than any of these factors is fuel prices, as an airline’s single largest cost (and the one that it traditionally has the least amount of control over) is how much it pays for jet fuel.