While this summer is already trending to be the largest travel season ever — up 100,000 fliers per day over last year — travelers may find airline ticket prices going up due to a spike in fuel costs, even while seat availability decreases.
According to the International Air Transportation Association, the cost of gassing up is up 50 percent, with oil selling at $65 a barrel this summer compared to $45 for the same quantity in 2017.
Airline executives told attendees at IATA’s annual meeting they were still optimistic about their carriers’ profitability, since they’ve worked to restructure their businesses so they can absorb the increased cost that always seems to come around this time of year.
While you might think a fuel surcharge may be tacked onto your ticket, there’s good news: the Department of Transportation has made such fees illegal on domestic flights five years ago because the DOT determined they were really just a hidden price increase. These surcharges are permitted on international flights, however, and flights to Asia have seen figures between $50 and $200 — almost 15 percent of the ticket price — tacked on.
Ticket prices to popular summer destinations, such as Europe, haven’t been severely impacted due to competition from the low-cost carriers, but flexible business class seats and fares to parts of the country where there’s less competition have begun to see hikes.
While this recent spike may seem large, airlines learned from the disastrous $140 per barrel season a decade ago. To avoid seeing profits plummet, they’ve implemented price hedging policies to protect their margins.
Bottom line, depending on where you’re heading, those fuel costs surcharges may be unavoidable. Just do your best to find the lowest-priced tickets you can and hope for the best. Also, buy your tickets earlier rather than later when surcharges could get bigger.
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Photo credit: Gietje (Wikimedia Commons, public domain)