Rising Airfares Due to Surge in Jet Fuel Prices
The rising cost of jet fuel has led to a significant increase in airfares across the globe, with several Chinese airlines among those raising their prices. This trend comes as the conflict between the US and Israel on Iran continues to impact energy markets.
Airlines such as China Eastern Airlines and China Southern Airlines have joined a growing list of global carriers that have increased fares since the start of the US-Israeli strikes on Iran on February 28. Industry leaders have warned that if the energy crisis persists, airfares could rise by up to 9 per cent. The International Air Transport Association’s director general estimated that global airfares might increase by 8 to 9 per cent under these conditions.
Analysts suggest that the extent of fare increases will vary depending on the level of competition on specific routes. Airlines operating on routes with less competition are more likely to implement larger price hikes.
The surge in jet fuel prices has been dramatic, with an 83 per cent increase since the Iran conflict began. In response, airlines have adopted various strategies to manage their costs. Independent civil aviation analyst Li Hanming noted that “they charged more – that is the most straightforward approach.”
Chinese budget carrier Spring Airlines has raised its fuel surcharges by up to 180 yuan (US$26) on flights from China to nearby Asian nations such as Japan and Malaysia. Similarly, Juneyao Air has adjusted its fuel surcharge to 600 yuan for China-Indonesia flights, 400 yuan for shorter China-Vietnam flights, and 550 yuan on other China-Southeast Asia tickets, according to reports.
Mainland airlines are not the only ones increasing prices. Qantas has raised fares by 5 per cent, while Air New Zealand has added NZ$90 (US$53) to long-haul tickets. Hong Kong Airlines has implemented a 35.2 per cent fuel surcharge, as reported by the discount flight portal Air Traveller Club on March 12.
Cathay Pacific Airways announced a HK$148 (US$19) increase in fuel surcharges on short-haul flights, along with a HK$615 rise for long-haul routes on the same day. In Europe, Air France-KLM and SAS have also raised fares, while US carriers United Airlines and Delta Air Lines are following suit, according to news reports.
Despite the higher fares, passengers traveling to and from China are largely accepting the new pricing. According to Li, Chinese tourist arrivals in Australia are expected to grow this year, even with the increased airfares. Nick Henderson, Greater China general manager with the promotion agency Tourism Australia, stated that the upward trajectory of tourist numbers is expected to continue in the years ahead.
However, Li also mentioned that travel “delays” are starting to show, with reduced tourist bookings for China’s Ching Ming Festival in early April and Labour Day holiday a month later.
Impact on Travel and Tourism
The increase in airfares is affecting not only the airline industry but also the broader tourism sector. While some travelers are still willing to pay more for their trips, others are beginning to reconsider their travel plans. This shift could lead to changes in booking patterns and potentially affect the overall demand for air travel in the coming months.
As the situation with jet fuel prices continues to evolve, it remains to be seen how airlines will adjust their strategies and whether further fare increases will be necessary. For now, passengers are navigating these changes with a mix of acceptance and caution.
Bahran Hariz adalah seorang penulis di Media Online IKABARI.
