United Airlines and Continental Airlines have raised their airfares. This move was followed by American and Delta Air Lines. Approximately, $20 to $60 has been added to the cost of round trip tickets. The move is geared towards business travel segment air travellers making last-minute bookings. These steps are an attempt by airlines to balance out their losses due to the continuous spurt in fuel prices. The Associated Press reported that travellers who book ‘first class and instant-upgrade tickets’ will be effected by the rise in fares. The Associated Press also reported that such travellers ‘are less likely to put off or cancel trips because of rising prices’. Since mid December, leisure fares have gone up four times.
Twin Cities’ Passengers to be Hit Hardest
With Delta Airlines also increasing ticket prices, travellers catching Delta flights from the Twin Cities of St Paul and Minneapolis will have to bear the brunt of the impact at the local level. Delta Airlines is the largest airline in the town and handles more than 450 departures from the Minneapolis St Paul Airport everyday. However, there has been no instantaneous response to this hike from budget airlines such as Southwest, AirTran, Frontier, and Sun Country.
Qantas to Also Hike Fares
Qantas voiced plans to increase the fares of trans-Tasman, regional, and domestic airfares by a maximum of 5%. The move will significantly dent its cheap flights segment. The airline claimed that the rise in the average prices in Singapore Jet Fuel (SJF) and West Texas Intermediate Crude Oil (WTICO) are the major factors behind the step. Qantas has claimed that the prices in WTICO and SJF are higher than the level of prices during the first half of FY11 and also at their peak after FY08. In fact, the SJF average per barrel rise has been from US$88 from September, 2010 to US$110 in January 2011. In the present week, this reached the figure of US$117 as per internet sources. The increased airfares would be applied to the tickets sold from February 25th onwards.
Qantas CEO’s Take on the Issue
Alan Joyce, the CEO of Qantas commented ‘Airlines in Australia and around the world continue to monitor oil and fuel prices very closely, and many have already responded to the current high prices with changes to their surcharges and fares’. He went on to say ‘Domestic, regional and Tasman fares have been under review and, while we have been absorbing higher fuel costs for some time, this increase is an appropriate response to this significant and additional cost to our business’. Mr Joyce even voiced the concern that future hikes can be a possibility and that ‘after fuel hedging and this change to our fares, Qantas will still not fully recover these higher fuel costs’.
Twin Cities’ Passengers to be Hit Hardest
With Delta Airlines also increasing ticket prices, travellers catching Delta flights from the Twin Cities of St Paul and Minneapolis will have to bear the brunt of the impact at the local level. Delta Airlines is the largest airline in the town and handles more than 450 departures from the Minneapolis St Paul Airport everyday. However, there has been no instantaneous response to this hike from budget airlines such as Southwest, AirTran, Frontier, and Sun Country.
Qantas to Also Hike Fares
Qantas voiced plans to increase the fares of trans-Tasman, regional, and domestic airfares by a maximum of 5%. The move will significantly dent its cheap flights segment. The airline claimed that the rise in the average prices in Singapore Jet Fuel (SJF) and West Texas Intermediate Crude Oil (WTICO) are the major factors behind the step. Qantas has claimed that the prices in WTICO and SJF are higher than the level of prices during the first half of FY11 and also at their peak after FY08. In fact, the SJF average per barrel rise has been from US$88 from September, 2010 to US$110 in January 2011. In the present week, this reached the figure of US$117 as per internet sources. The increased airfares would be applied to the tickets sold from February 25th onwards.
Qantas CEO’s Take on the Issue
Alan Joyce, the CEO of Qantas commented ‘Airlines in Australia and around the world continue to monitor oil and fuel prices very closely, and many have already responded to the current high prices with changes to their surcharges and fares’. He went on to say ‘Domestic, regional and Tasman fares have been under review and, while we have been absorbing higher fuel costs for some time, this increase is an appropriate response to this significant and additional cost to our business’. Mr Joyce even voiced the concern that future hikes can be a possibility and that ‘after fuel hedging and this change to our fares, Qantas will still not fully recover these higher fuel costs’.
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