Air Transat charges more for flights to Europe as fuel prices are higher for airlines
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Air Transat is charging more for flights to Europe as the rising cost of jet fuel – caused by an oil crisis stemming from the Middle East war – weighs on Canadian and international airlines.
“We have increased the cost of fuel in Europe. However, this is integrated into the total price,” said Jean-François Pruneau, chief financial officer of the Montreal-headquartered airline, during the company’s first quarter call on Wednesday.
“What we are also doing at the moment is increasing fares on peak travel days and routes where we see less competition, where we have more flexibility,” he told investors.
Several international airlines have added fuel surcharges – extra money paid for unexpected oil costs – to account for the rise in jet fuel prices since the US and Israel attacked Iran in Feb. 28, the start of a regional war that has disrupted the world’s oil supply.
Air New Zealand, Australia’s Qantas Airways and Scandinavian Airlines have all announced they will be boarding passengers.
Japan Airlines said it has “no plans” to introduce fuel price changes before April 1, as it reviews those costs over a two-month period.
Some international airlines, such as Lufthansa and Ryanair, have confirmed that they have a hedging program to temporarily cap fuel prices.
Rising fuel prices have challenged airlines, causing higher ticket prices and increased international travel. Martin Firestone, travel insurance broker and President of Travel Secure, talks about the concerns travelers may face.
Price adjustment ‘may be necessary’: WestJet
Air Transat’s Pruneau told investors that tickets that have already been sold can be rebooked, saying that if the company were to raise fares immediately it would see “a negative impact on demand.”
Air Transat is also looking at other cost-saving measures, “including limiting our costs across the company to ensure we will be able to cope with this fuel increase,” he said.
Jet fuel costs are often an airline’s biggest expense, and have risen since the start of the conflict. According to a price tracker published by the International Air Transport Association, the cost of jet fuel increased by 58.4 percent between February 27 and March 6, from $99.40 US to $157.41 US per barrel.
CBC News reached out to several other airlines, both Canadian and international, to ask how they will respond to the rising cost of jet fuel.
Although Porter has not yet responded, a WestJet spokeswoman said Monday that the situation in Iran “has made operating flights more expensive … based on this, further price adjustments may be necessary.” CBC News reached out next.
Air Canada, meanwhile, is taking positions to protect “a small portion of our short-term needs,” a spokesperson told CBC News on Monday. However, the airline declined to comment on future prices.
