Australia: Travellers urged to book early as fares predicted to soar due to rising jet fuel prices
Travellers are facing steep air fare hikes and are being urged by industry experts to book early as bans on Russian oil cause jet fuel prices to surge. Qantas CE Alan Joyce has said the average fare would increase by 7% as a result of the increased crude oil prices following Russia’s invasion of Ukraine, but others predict the price rises could be higher. The Brent crude oil price sits at around US$112 a barrel, up from about US$78 a barrel at the beginning of 2022 and marking an eight-year high, according to the Australian Competition and Consumer Commission. The surge follows the US and UK banning oil from Russia – the world’s biggest exporter of crude and oil products combined. For most airlines, fuel makes up 30% to 40% of operating costs. “You don’t have to be a maths expert to know that fuel costs going up by 20% to 30% will hurt a lot,” Prof Rico Merkert, chair of transport and supply chain management at the University of Sydney’s Business School, told Guardian Australia. If Europe follows the US’s tough stance on Russian oil, prices may be pushed higher than $200 a barrel, says Merkert. “This would be catastrophic for airlines.” Ravi Kumar, director of Continental Travels Australia, said in the past, air fare prices have increased between 2% and 5%. The higher the expected increase, the more important it is for consumers to act fast and purchase tickets for travel. Over the last few days, Kumar has observed increases of up to $100 on ticket prices. “Generally we recommend consumers buy tickets early when there is an expected increase in prices,” he said. “We don’t know if it will be a minor increase, or grow to a major increase, but we can expect some jump.” Tom Manwaring, chair of the Australian Federation of Travel Agents, said ticket prices were “coming off a very low base”. “Air fares were already very, very cheap. So now they’ll just be very cheap.” He suggested growing confidence in the market among consumers was the main driver of prices at the moment.<br/>Over the next six to nine months, he expects international carriers will build up capacity, meaning more seats would become available. Story has more.<br/>
https://portal.staralliance.com/cms/news/hot-topics/2022-03-11/general/australia-travellers-urged-to-book-early-as-fares-predicted-to-soar-due-to-rising-jet-fuel-prices
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Australia: Travellers urged to book early as fares predicted to soar due to rising jet fuel prices
Travellers are facing steep air fare hikes and are being urged by industry experts to book early as bans on Russian oil cause jet fuel prices to surge. Qantas CE Alan Joyce has said the average fare would increase by 7% as a result of the increased crude oil prices following Russia’s invasion of Ukraine, but others predict the price rises could be higher. The Brent crude oil price sits at around US$112 a barrel, up from about US$78 a barrel at the beginning of 2022 and marking an eight-year high, according to the Australian Competition and Consumer Commission. The surge follows the US and UK banning oil from Russia – the world’s biggest exporter of crude and oil products combined. For most airlines, fuel makes up 30% to 40% of operating costs. “You don’t have to be a maths expert to know that fuel costs going up by 20% to 30% will hurt a lot,” Prof Rico Merkert, chair of transport and supply chain management at the University of Sydney’s Business School, told Guardian Australia. If Europe follows the US’s tough stance on Russian oil, prices may be pushed higher than $200 a barrel, says Merkert. “This would be catastrophic for airlines.” Ravi Kumar, director of Continental Travels Australia, said in the past, air fare prices have increased between 2% and 5%. The higher the expected increase, the more important it is for consumers to act fast and purchase tickets for travel. Over the last few days, Kumar has observed increases of up to $100 on ticket prices. “Generally we recommend consumers buy tickets early when there is an expected increase in prices,” he said. “We don’t know if it will be a minor increase, or grow to a major increase, but we can expect some jump.” Tom Manwaring, chair of the Australian Federation of Travel Agents, said ticket prices were “coming off a very low base”. “Air fares were already very, very cheap. So now they’ll just be very cheap.” He suggested growing confidence in the market among consumers was the main driver of prices at the moment.<br/>Over the next six to nine months, he expects international carriers will build up capacity, meaning more seats would become available. Story has more.<br/>
