• Wed. Oct 5th, 2022

The airline industry is still affected by oil costs

ByKimberly A. Brochu

Mar 10, 2022

(NewsNation) — The pandemic is largely over, mask restrictions are dropping like flies, and warmer weather is beckoning. What should be a great time to be in the travel industry is now being hit hard by soaring oil prices, which are pushing jet fuel costs into the stratosphere.

While an increase in ticket prices of 7% every 10 days at this time of year is normal due to demand, says travel expert Peter Greenberg, with fuel surcharges being added now that the ticket d is 20% higher than last week, and will likely jump another 10% next week.

The situation should not improve anytime soon. Greenberg predicts that high fuel prices and associated surcharges will be with us until after Memorial Day. Airlines update their prices thousands of times a day and are thus able to react quickly to price changes.

Low-cost carriers are in a much better position than traditional carriers like American and Delta because their cost structure is already set up for cheaper operation. Inevitably, they will have to try to match some of the low cost airline fares and therefore have the chance to make a profit.

As prices increase, the number of available flights decreases. Allegiant, for example, will cut around 10% of its flights. The legacy carriers had begun cutting flights in 2021 due to pilot shortages, and are expected to continue to do so. Look for more connecting flights and more stopovers when you travel.

Finally, Greenberg warned that price increases would soon extend to rental cars and cruise lines. Ships need fuel, and the price you’ll pay to let the rental car company fill your tank has already jumped to $10/gallon in some places.