Rising fuel costs could mean pricier airfares as carriers confront another hurdle

Just when there was hope on the pandemic horizon, airlines now face a second headwind of skyrocketing oil prices — which could make airfares even more expensive. Fallout from Russia’s invasion of Ukraine, including sanctions and oil import bans, helped push up the price of jet fuel by more than 27% to US$142 a barrel in the week ending March 4, according to S&P Global Commodity Insights. “If the jet fuel price stays that high, then over time it is reasonable to expect that it will be reflected in airline yields,” said IATA DG Willie Walsh Thursday. Concerns over fuel, which is airlines’ biggest expense after labour, may prompt carriers to recoup that cost with pricier tickets. Demand for travel among Canadians is rising after two years cooped up under COVID-19 restrictions, but the bigger booking numbers could plateau if ballooning fuel costs are passed on to passengers through higher fares, said John Gradek, head of McGill University’s aviation management program. Air Canada says fuel costs always factor into ticket prices. “We always say that ticket pricing is dynamic and that fares can change frequently, both up and down. However, one cannot assign a particular cause to any price movement that may occur because there are many elements that go into setting fares” — such as competition, demand and airport charges — Air Canada spokesman Peter Fitzpatrick said.<br/>