The End of Cheap Flights is Nigh
The soaring price of fuel is making waves across the airline industry with BA boss Willie Walsh coming out this week saying that many airlines would not survive a life-threatening combination of expensive fuel and a drop-off in demand as passenger numbers decline due to expensive fares and dwindling consumer confidence.
The story is the same in Australia and the US. Australian airline Qantas has announced that it will increase its international airfares by around four percent and domestic fares by three per cent for tickets issued from Australia from June 4.
Passengers will now pay an extra $72 for flights from London from Australia. Meanwhile ticket prices between Sydney and Melbourne will increase by around $3.
Commenting on recent fare hikes, Qantas Chief executive Geoff Dixon said the increases were unavoidable given the continuing costs of oil.
He says: “Oil and jet fuel prices continue to break records, with West Texas Intermediate spot crude oil passing $US134 a barrel overnight and Singapore Jet Fuel today trading at almost $US166 a barrel.”
American Airlines is struggling to keep up with rising prices too. The carrier has just announced that it will charge passengers $US15 to check accompanying bags onto flights as well as lay off staff and retire older planes as a response to the weakening US economy and rising fuel costs.
Written by F.H
