Fuel prices have re-entered the conversation about the economic recovery and the travel industry's turnaround.



We don't want fuel to dominate that conversation, but the numbers are attracting attention. The U.S. Energy Information Administration put the mid-January average price for crude oil at $92.60 per barrel, an increase of 4.8% in just four weeks.

Nationally, regular unleaded gasoline last week was averaging $3.11, up 40 cents, or nearly 15%, from a year ago, according to AAA.

Something similar, or worse, is happening with jet fuel. IATA said global prices "at the refinery" are up 27% in the last year. Airlines, of course, are hedging again.

As the financial crisis and recession recede, it was perhaps inevitable that fuel prices would inch back toward center stage.

So far, the consensus estimates suggest that price increases will be relatively modest. We've not seen any prediction that prices will reach the dizzying and damaging heights of 2008.

That year, and some other years we can remember, dramatically illustrated the role that fuel prices play in our economic and political life.

The simplified version is that when prices are low, airfares are reasonable and big cars are all the rage; when prices are high, cheap seats go away, a small-car fad takes hold and small becomes beautiful again.

On the political side, if prices get too high, elected officials feel the heat, which increases the chance that they'll say (or do) something rash.

That's what happens when fuel dominates the conversation, but the time may be ripe for breaking this cycle.

It's encouraging to note, for example, that the "passing fad" of electric and hybrid vehicles did not go away in 2010, even as fuel prices stayed out of the headlines and the economy wobbled.

And the airlines' accelerating trend toward merchandising and bundling their ancillary services could help to flatten some of the peaks and valleys in travel demand if fuel costs rise unexpectedly.

Before the unbundling trend took off, carriers could raise fares only by raising fares.

Today, carriers can moderate the impact of rising costs by adjusting the fees for particular combinations of ancillary services, enabling travelers to compromise on ancillaries and salvage a trip that might otherwise have been priced out of the market.

If the airlines get good at that, they could bring the hated art of yield management to new levels of loathing. It would be worth it, to steal the show from Cruel Fuel.
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