Airfares will soar this summer due to increasing fuel prices

airlines likely to raise fees due to higher gas pricesYet another airline fee is on the horizon, just in time for the busy summer travel season.

Fuel surcharges are likely to push airfares higher to make up for a 25% increase in airline gas prices so far this year, industry watchers warn.

"Airlines have gotten pretty good about adding fees on everything from aisle seats to extra checked baggage," said John Armbrust, president of Armbrust Aviation, which publishes the World Jet Fuel Report. "So the likelihood of them adding a fuel surcharge is pretty certain, I think, in a high fuel environment."

Major carriers flying domestic and international routes paid $2.18 for a gallon of gas for the first three months of this year -- the highest price since oil costs spiked in 2008, according to federal government statistics released today.

Carriers haven't slapped fuel surcharges on tickets for several years, as oil prices decreased and air travel lagged as consumers tightened their belts during the Great Recession.

Most travelers last paid these fees in 2008, when record-high oil prices prompted carriers to add domestic fuel surcharges of up to $100 a round trip to base ticket prices, wrote Rick Seaney, chief executive officer of farecompare.com, on his blog.

If you're flying domestically, fuel surcharges are likely to be included in the base price and won't be transparent to passengers. International ticket receipts, however, usually break out these fees, making it easier to see how much fluctuations in oil prices impact air fares.

Fuel costs are already one of the airlines' highest operating expenses. Rising gas prices threaten to wipe out small gains in airline revenues this year, prompting some carriers to raise charges already.

Delta Air Lines recently filed a $20 round trip surcharge on top of its list of peak travel day surcharges and is adding fuel charges to select international routes. British Airways also added a fuel surcharge on certain routes, as did Lufthansa Airlines.

Experts expect other carriers to follow suit.

"In the past, we've seen most airlines, if not all, follow the same pattern," said Clem Bason, president of the Hotwire Group. "They do it at varying levels of increase."

And with fares already 22% higher than they were a year ago -- due not only to the high cost of oil, but to a limited number of seats and fewer routes -- Bason adds that there's a chance that consumers could see record high ticket prices this summer.

Air fares, on average, for the months of June, July and August are now $75 a ticket more than they were last summer, he said.

"As the weeks go by, prices continue to rise--we're seeing a definite upward trend," Bason said. "If fares keep rising as we approach Memorial Day we could break records we saw in 2008."

Increase your money and finance knowledge from home

What is Short Selling?

Make a profit when stocks prices fall.

View Course »

Introduction to Value Investing

Are you the next Warren Buffett?

View Course »

Add a Comment

*0 / 3000 Character Maximum