Monday, February 14, 2011

Fuel Price Hike Translates as Higher Airfares

The surging prices of fuel have also resulted in spiralling airfares. In fact, United Airlines and Continental Airlines have been reported to have increased their round trip ticket fares by about $20 to $60. As per the Associated Press, travellers booking ‘first class and instant-upgrade tickets’ would be effected by the rise in fares’. The Associated Press further reported that such travellers ‘are less likely to put off or cancel trips because of rising prices’. In fact, leisure travel since mid December has become more expensive as price hikes have been implemented four times within the time frame.

Qantas Also Plans to Hike Fares

Flights with Qantas are also set to become more expensive with the airline announcing plans to increase the price of tickets in the trans-Tasman, regional, and domestic sectors by up to 5%. This will come as a major dampener for quite a few travellers looking for cheap flights with Qantas. The airline, with one of its major hubs in Sydney Airport, blamed the rising average prices in Singapore Jet Fuel (SJF) and West Texas Intermediate Crude Oil (WTICO).

Comments from Qantas CEO

Mr Alan Joyce, the CEO of Qantas said ‘Airlines in Australia and around the world continue to monitor oil and fuel prices very closely, and many have already responded to the current high prices with changes to their surcharges and fares’. He further commented
‘Domestic, regional and Tasman fares have been under review and, while we have been absorbing higher fuel costs for some time, this increase is an appropriate response to this significant and additional cost to our business’.

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