Airlines could pass fuel hike prices to passengers

As the demand for travel rebounds, the airlines could hike the passenger fares due to fuel hike

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People who are planning for a vacation should embrace themselves to be prepared for hiked air fares. It is the rise in the oil prices, the Russia-Ukraine war and the higher travel demand that could trigger the high air fares. The pandemic had shattered the travel industry hard but now things are getting back to normal and travel demand has also gone up. This has forced the airlines to hike their airfares.

One of the analyst at Bank of America said that one of the biggest surprises remained the demand which is so strong that the airline would be easily able to handle the majority of the fuel hikes. He added that this is also way ahead of how the airline actually function and maintain their prices. Some of the other factors like labor issues and pilot pipeline helps to maintain a lid on the capacity. Currently, North America is facing a shortage of pilots for passenger flights and is also facing staffing issues.

Amidst the pandemic, there has been a reduction in the supply of labor along with some business struggles which forced the airlines to cut a number of routes across the country in 2021. Hopper data that was published in March mentioned that the average airfare across United States and Europe increased by 16 percent to $770. Officials from the United Airlines said that the business is now improving after the wreckage that was caused by the pandemic when the demand for business and leisure in 2020 had gone down and it continued to lag in 2021.

The business demands are progressing more than what it was expected and some of the airlines are not passing the entire burden of the fuel price hike to the passengers as they opine that they would be able to manage the costs. Some airlines are also confident that they would be able to recover the fuel hike prices in the vacation travel demand spree.

Photo Credits: Pixabay