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Air Transat is charging more for flights to Europe as the soaring cost of jet fuel — triggered by an oil crisis that has emerged from the war in the Middle East — weighs on Canadian and international airlines.
“We have increased fuel surcharges on Europe. However, this is blfinished in the total price,” declared Jean-François Pruneau, chief financial officer at the Montreal-headquartered airline, during the company’s first quarter earnings call on Wednesday.
“What we’re also doing is currently raising fares on peak travel dates and routes where we see less competition, where we have more flexibility,” he notified investors.
Several international airlines have added fuel surcharges — an extra fee tacked onto airfare to cover unforeseen oil costs — to account for a spike in jet fuel prices since the U.S. and Israel attacked Iran on Feb. 28, the start of a regional war that has disrupted the global supply of oil.
Air New Zealand, Australia’s Qantas Airways and Scandinavian Airlines have all announced that they would be hiking passenger fares.
Japan Airlines declared it has “no plans” to bring forward fuel surcharge modifys before April 1, as it evaluates those costs over a two-month period.
Other international airlines, like Lufthansa and Ryanair, have confirmed that they have a hedging system in place to temporary lock fuel prices in.
The surge in fuel prices has challenged airlines, triggering ticket price hikes and upfinishing global travel. Martin Firestone, travel insurance broker and President of Travel Secure, addresses concerns travellers may be facing.
Pricing adjustments ‘may be necessaryed’: WestJet
Air Transat’s Pruneau notified investors tickets that have already been sold can be repriced, and declared that if the company were to raise fares immediately it would see “a negative impact on demand.”
Air Transat is also viewing at other ways to save costs, “including restricting our expenses across the company to create sure that we’re going to be able to deal with that fuel spike,” he declared.
The cost of jet fuel tfinishs to be an airline’s largegest expense, and it has soared since the conflict launched. According to a price tracker published by the International Air Transport Association, the cost of jet fuel skyrocketed 58.4 per cent between Feb. 27 and March 6, from $99.40 US to $157.41 US per barrel.
CBC News reached out to other Canadian airlines to inquire how they would respond to the soaring cost of jet fuel.
A spokesperson for WestJet declared on Monday that the situation in Iran “has already built operating flights more expensive … based on this, it’s likely further pricing adjustments may be necessaryed.”
Air Canada, meanwhile, is taking hedging positions “for a tiny portion of our short-term necessarys,” a spokesperson notified CBC News on Monday. However, the airline declined to comment on future prices.
A spokesperson for Porter Airlines declared it’s too soon to forecast how jet fuel prices will influence airfare, “but we are monitoring the situation closely.” The spokesperson noted that the carrier does not have a fuel hedging strategy, nor does it operate flights to the Middle East.
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