In no way, shape, or form did it ever occur to anybody that increasing oil prices would have a negative impact on the cost of airplane tickets. It was just a matter of time until it happened.
In the case of Delta Air Lines CEO Ed Bastian, that time seems to be right now.
Bastian said in an interview with the British Broadcasting Corporation that he believes airfares would rise by at least 10% in the near future.
In an interview with the BBC, Bastian said that “it really relies on where gasoline prices settle.” Considering the current oil prices, “It’s probably approximately $25 on a (domestic) ticket in the United States, which might be somewhere between 5 percent and 10 percent.”
International flights will very certainly be significantly more expensive than that.
Oil prices have surged as a result of Russia’s invasion of Ukraine, which started on February 24 and has continued to this day. However, Bastian and the vast majority of aviation authorities were forewarned well before then.
Despite this, the airlines have been encouraged by the sustained positive public reaction to travel and tourism, as well as by the pent-up demand that has developed over the last year. After two years of suffering, aviation travel is practically back to pre-pandemic levels, thanks to a decline in COVID-19 cases across much of the globe, as well as the relaxation of entrance criteria and limitations.
Lower oil prices, on the other hand, would be a boon rather than a detriment in the long run. The price of a barrel of oil has reached its highest level in 14 years, and, apart from staff salaries, the process of converting oil into jet fuel is the most expensive expenditure for airlines.
According to the BBC, international airlines Emirates, Japan Airlines, and AirAsia have all imposed surcharges on their ticket pricing in order to account for increased fuel costs thus far in 2018. Delta has said that it will follow suit.
IEA executive director Dr Fatih Birol told the BBC that the $100 per barrel of oil that is currently being experienced today may not be the highest level of prices we will see in the next few weeks. “I believe that the $100 per barrel of oil that is currently being experienced today may not be the highest level of prices we will see in the next few weeks.”