Higher Fuel Prices Affect Low-Budget Carriers
Don’t get your hopes up that switching to a bargain airline would allow you to avoid the higher prices imposed by big airlines as a result of increasing fuel costs.
Airlines that operate on a tight budget use the same kind and quantity of jet fuel as their bigger competitors, and they are beginning to feel the pain as well – and passing the expense along to their passengers and crew members.
“We’ll have to softly increase our rates,” Frontier Airlines CEO Barry Biffle said in an interview with CNBC on Friday afternoon’s ‘Closing Bell’ program. “We’ll have to gently raise our fares.”
The process of converting barrels of oil into jet fuel is the second-biggest expense for airlines after employee salaries, but according to CNBC, the price of jet fuel has increased by about 80 percent only this year alone, reaching the highest levels in nearly 14 years.
Despite the fact that jet fuel prices were already rising, the situation was exacerbated by the Russian-Ukrainian conflict, which began on February 24 and was followed by economic sanctions imposed by the United States and its Western allies against Russia, as well as Russian retaliatory measures against the west.
Despite this, Biffle, like his colleagues at other airlines, is enthusiastic about the summer season, particularly after spring break travel got off to a rousing start. In spite of rising gasoline costs, he said, “we feel we will be profitable this summer.”