Higher oil prices are set to lead to a 10% increase in airfares, according to the boss of one of the world’s biggest airlines.
Delta Air Lines head Ed Bastian told the BBC the final impact “really depends on where fuel prices settle”.
Oil prices have reached 14-year highs after Russia’s invasion of Ukraine.
Emirates, Japan Airlines and AirAsia are among the big carriers to introduce surcharges on their tickets recently to cover the higher cost of jet fuel.
Before the pandemic, in 2019, 200 million customers flew on Delta, making it the world’s second-biggest airline by passenger numbers.
Mr Bastian said that on a domestic US flight the rise in fuel prices “is probably about $25 on a ticket, that could be anywhere between 5% to 10% at these high levels of oil… and international [flights] will be a bit higher than that”.
Delta is planning to introduce fuel surcharges on the international flights which account for about 35% of its business, and increase US ticket prices.
Jet fuel is one of the biggest costs for airlines. Michael O’Leary, the boss of Europe’s biggest carrier Ryanair, said recently that the surge in oil prices would lead to “materially higher” airfares this summer.
Many airlines try to protect themselves from these changes by buying fuel in advance. Easyjet and British Airways both said recently that they had done so for 60% of their fuel needs this year.
This year has seen big fluctuations. At the start of January, Brent crude – the international benchmark for oil – was under $80 a barrel, but it recently reached as high as almost $130 as the US and UK said they would end their use of oil from the world’s biggest exporter, Russia.
More price swings are likely in the short-term according to the executive director of the International Energy Agency, Dr Fatih Birol. He told the BBC: “I think the $100 [oil] we are experiencing today may not be the highest level of prices we’ll be seeing in the next weeks”.
He warns that will be felt across all areas of the global economy because as well as higher transport costs it will lead to more expensive heating and electricity. That would exacerbate the cost of living crisis many countries are facing.
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