Oil price hikes: the end of cheap airline tickets?

There are murmurs that oil price rises are starting to impact on the availability of cheap airline tickets. Aer Lingus is the latest in a long line of airlines to slap on an extra fuel surcharge.

The airline says that costs have risen by 85 per cent over the past year, so the transatlantic fuel surcharge of €70 for a round-trip fare is an absolute necessity. This new charge comes hot on the heels of British Airways' announcement of similar charges in the past week.

Oil now often represents the biggest cost for an airline and is the only one a carrier does not have significant control over. Some airlines with strong financial positions, like Southwest, have been able to hedge against fuel-price increases, but some say that they are living on borrowed time. Most airlines, however, have been forced to pass on these price rises to consumers despite furious cost cutting in other areas.

It is hard to predict how much higher oil prices will go, but their impact on airline ticket prices is already visible. Consumers should bear in mind though that because of the low-cost airline revolution, internet booking, and brutal price competition, flight prices are still at historically low levels.

Watch this space though. Delta Air Lines and American Airlines have indicated that they will be adding $10 to their fares on some long-haul routes.

There is not a whole lot the consumer can do though. It makes booking earlier even more attractive as this could help beat future price increases. The old chestnut of “shopping around” is also just as important as ever.

© Cheapflights Ltd Hugo Burge, Head of International