Travel costs to remain high over holidays

[projekktor id=’16931′]

This weekend will be the busiest for travel in Canada, this year.

The days between Christmas and New Year’s find Canadians using planes, trains and automobiles to visit family, or perhaps get away to a warmer destination.

And although gas is cheaper at the pumps, prices for other modes of transportation remain high.

Fuel prices have dropped nearly 40 percent in the last six months — faster and farther than almost anyone could anticipate. But if you’re planning to travel, the only way you’re going to save a few bucks on fuel costs is to take the car, and drive yourself.

Gas prices are down below a buck a litre in most areas. And that makes driving the car, far more affordable than it was during the summer travel season. But other modes of transportation have not yet begun, to pass those fuel cost savings on to consumers.

Diesel powered vehicles like trains and buses have not cut passenger fares, and are still tacking fuel surcharge costs onto many tickets.

Major airlines use aviation fuel, which is closer to kerosene than to gasoline, and they too, are keeping their surcharge costs on ticket prices for now. But why?

Marvin Ryder of the DeGroote School of Business at McMaster University provided some insight: “The good news is you may be seeing slightly lower prices on travel fares around March break, but that’s only a guess.”

There’s another factor in play here. Lower oil prices usually weaken the price of the Canadian dollar. And if the loonie continues to decline in value, it makes it more expensive to buy fuel that is sold in U.S. Currency that could off-set any cost savings for Canadian airlines, and that would mean that prices will remain high.