Air fares rise as oil prices spike
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The cost of oil rose above US$100 for the first time in two years last week and the surging prices are taking a toll on the affordability of passenger aviation.
A number of international airlines have hiked fuel surcharge in the last week by INR500 to INR2,000 per sector, making flying abroad costlier.
While this is the range for economy fliers, business and first class passengers would have to shell out much more.
Domestic full service airlines had hiked their fuel surcharge last month as well and are expected to announce further hikes after oil PSUs increased jet fuel prices on Tuesday.
Airlines like Air France, KLM, Delta, Malaysian Airlines, Cathay Pacific increased their surcharge on Tuesday, while others like Lufthansa and Singapore Airlines did so last week. As a result, fares to international destinations have increased by INR4,000 in some cases.
The recent hikes mean a double blow for passengers as air fares are already much higher than last year, increasing by up to 25%. Demand for air travel is still growing at a rapid rate, and industry sources have not reported any impact on demand so far.
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