> If it was a honest competitive market the fuel cost savings would be passed on to the customers.
This, in fact, did happen during the oil boom of the mid-to-late 2000s. Southwest had the foresight to purchase a ton of oil futures back when it was cheap, and nearly slaughtered the primary carriers by pricing fares at levels they couldn't hope to match in the current market.
http://www.nytimes.com/2007/11/28/business/worldbusiness/28i...
With respect to "shafting consumers," airfare is cheaper than it's ever been. And if you've ever followed the market, airlines have rarely been steady bastions of profit like banks or (recently) Apple or Google - it seemed like at least one was going bankrupt every year until recently.
http://www.aei.org/publication/even-with-baggage-fees-the-mi...