High airfares may become new norm as jet fuel costs soar, says Asia-Pacific airline industry chief
Summary
Asia-Pacific airlines face much higher operating costs as jet fuel prices have risen to about $180 a barrel from about $80 a year ago. The head of the Association of Asia Pacific Airlines said high fares may persist, while carriers weigh cost recovery against losing passengers.Key Facts
- Jet fuel accounts for about one-third of airline operating costs.
- Wong Hong leads the Association of Asia Pacific Airlines, which groups 18 regional airlines.
- Airlines across the Asia-Pacific, Europe and North America have raised base fares, fuel surcharges or other fees since the Iran war began in late February.
- Asia-Pacific passenger traffic fell for five consecutive months from April through August, then rose slightly in September.
- Passenger traffic in the region grew 1.9% during the first nine months of the year.
- Many passengers book flights months before departure, while airlines buy fuel closer to the flight date, creating a timing mismatch in costs and revenue.
- Airlines also face aircraft delivery delays and higher maintenance costs for older planes.
- Wong said travel demand remained strong despite the higher costs.
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