Airfares likely to shoot up by 20% as fuel prices, demand soar

Mumbai: Soaring fuel prices and rising passenger demand will make summer travel to international destinations costlier by 15%-20% from a year earlier, said aviation and travel trade experts.
Brent crude prices have been hovering near two-and-a-half-year high of $122 a barrel due to the West Asia crisis, pushing jet fuel prices by over 30% worldwide. This has forced international airlines to increase fuel surcharge, an extra amount added to an air fare to cover increased fuel costs - in April. Around 72 international airlines operate out of India.
The surcharge has risen by up to 25% in the past couple of months, according to travel industry experts.
Singapore Airlines has increased fuel surcharge by 16% from February. While Singapore Airlines charged 8,558 as fuel surcharge on a Mumbai-Singapore-Mumbai ticket in February, it charges 9,924 in April. The airline has added an additional $32 (about 1,400) on tickets sold after April 21.
Other international airlines such as British Airways and Emirates have also joined the bandwagon. British Airways has hiked its fuel surcharge by £10 (about 730) in April.
"Due to the current volatility of oil prices, Emirates is introducing a fuel surcharge to reflect the substantial recent increases in our fuel costs," Emirates had informed its trade partners in a statement last week.
Emirates accounts for a lion's share of outbound traffic from India, beating rival carriers such as British Airways, Lufthansa and Singapore Airlines. As jet fuel constitutes about 40% of an airline's operating cost, higher fuel surcharge helps cover increased cost.
25/04/11 Manisha Singhal/Economic Times

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Categories: Indian Aviation- In General Apr 2011