Jet Fuel Prices Continue to Soar

March 31, 2011

-By Joshua Resnek

For the short term and perhaps extending into the long term, prices for jet fuel and resulting higher air fares appear certain for travelers already planning their summer vacations.

With jet fuel hovering at $134 barrel near to the end of March, the only way is up for airline ticket prices, according to industry analysts and experts who believe that prices for jet fuel will not be going the other way at all for quite some time.

At $134 a barrel, jet fuel this year is 28 percent higher in price then the same time in 2010.

Throughout the airline industry, jet fuel comprises an average 40 percent of operating costs.

As a result, all airline ticket pricing is irrevocably tied to the price for jet fuel.

American consumers who drive automobiles often fret when the price for a barrel of oil rises as they understand gasoline prices will rise every time in such an upward and spiraling scenario.

It is no different with jet fuel and airplane ticket prices.

Most major airlines have already upped their ticket prices to compensate for the rising price for fuel.

As an example, it was reported recently that three major overseas airlines connecting faraway places – Emirates, Qantas and Cathay Pacific – announced they were adding charges to battle the rising price for jet fuel.

Emirates is increasing the fuel surcharge for Japan to Dubai flights commencing April 1, according to Emirates officials.

Cathay Pacific, Singapore Airlines and ANA of Japan have also raised surcharges for travel to and from Hong Kong. Those fares will go up 18 per cent in April.

Most domestic American airlines have incrementally raised ticket prices to meet the higher price for jet fuel.

US airlines have raised prices six times in January, February and March without significantly effecting demand.

However, if the price for jet fuel continues to surge, as is expected, domestic American air travel and international travel all over the world will be seriously impacted.

Although barrel oil is in the $106 range as March turns to April, almost anything can happen.

If the US government released oil from the strategic fuel reserve in a large amount, the price for barrel oil would significantly drop, and with it, the price for jet fuel.

However, extraordinary events like that generally require a national emergency – and $106 a barrel for oil is not a national emergency.