- Travelers could see summer wages increase as fuel prices rise, according to industry experts.
- Domestic fares will rise 6% a month until August, while international fares will jump 6%, per an aviation consultant.
- Airlines will hike passengers’ fares or cover the cost and lower their profit, the consultant said.
Travelers could be paying more for their airfares this summer due to the rising price of jet fuel, according to aviation industry experts.
Global domestic fares are set to increase by 6% on average each month until August, Linus Benjamin Bauer, founder and managing director of consultancy firm Bauer Aviation Advisory, told Insider.
International fares will jump 4% on average every month over the same period, Bauer said.
“The rise of jet fuel prices is becoming another major headache to the aviation industry during the post-pandemic recovery process this year,” he said.
Further upwards pressure on prices is expected to come from rising travel demand as COVID-19 wanes, prompting relaxation of entry rules and the reopening of countries’ borders, Bauer said.
Oil prices have risen steadily after a post-lockdown economic recovery boosted demand for fuel. The cost of a barrel of crude oil, from which gasoline and jet fuel are refined, is approaching $100 per barrel for the first time since 2014.
According to the website of the International Air Transport Association, which cites data from energy information provider Platts, the global price of jet fuel has increased by almost 4% between January and February this year, and jumped 57% compared to last year.
The data also says that the average price for a barrel of jet fuel in 2022 currently stands at $106 per barrel.
Amid higher fuel prices, airlines have the option to either hike airfares or “bear the cost” and lower their profit, Bauer said.
Travel app company Hopper predicted in its Consumer Airfare Index that US international fares are expected to rise by an average of 5% each month until June with ticket prices reaching $830 for a round-trip.
US domestic fares will increase by 7% on average every month until June with hitting prices $315 for a round-trip, per Hopper’s report.
The largest increases in prices will be during February and March, Hopper’s report said.
Adit Damodaran, economist at Hopper, told Insider: “With jet fuel prices increasing 60% increase throughout 2021, we’re expecting high costs to continue to create upward pressure on price in 2022.”
Independent aviation consultant, Chris Smith, told The Mail on Sunday that airlines are expected to pass the rising costs onto the customer because the jet fuel price hikes have been so big.
It comes after Ryanair CEO, Michael O’Leary, said in early February that fares will rise above pre-coronavirus levels by the summer, Bloomberg reported.
Air France-KLM boss, Fahmi Mahjoub, told the BBC that higher air fares were “unavoidable” because of more expensive fuel.