With increasing fuel prices, airlines are striving to remain profitable. A five percent hike in the fares is the proposed rate, according to a senior International Air Transport Association (IATA) official.
“With no sign of a significant decline in oil prices that are staying stubbornly above $100 a barrel, airlines are fighting to stay profitable and have pushed up ticket prices in order to recoup costs. They have had no choice but to hike fares,” Brian Pearce, chief economist of IATA said (to a leading newspaper).
“We are looking at a fare increase of at least five percent. We have seen a 5% increase in unit costs because of the rise in jet kerosene and that is with the [airline] industry having hedged 50% of this year’s fuel bills. So we are going to see that 5% reflected in airfares,” he added.
Talking on the same line, Alan Joyce, chief executive of Qantas has added that the industry will see further price increase this year as airlines are struggling to make a profit.