Numero Crunchero
You forgot about the other side the equation.
For every $2 drop in oil price, that's $2 dollar that our competitor can lower their ticket price (while still maintaining their profitability). While, if we match our competitor in pricing, that will eats into our profit margin. Hence what has been happen in the past 2 years.
When oil price goes up, our competitor will be force to increase price (to maintain the same profit level), so for a $2 increase in fuel price, their will need to increase $2 to cover the extra cost. While we only need to do that by $1. Hence, if we match our competitor pricing, we will double our profit (or we can squeeze our competitor out of the market by pricing below them [which is a very un-swire thing to do]).
Also, higher oil price usually means stronger market / economy, hence company can better afford to pay higher fares. But then again, I am looking at this in a very simplistic manner as well. A lot more goes into this then what we are talking about here if you want to dig into it.