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Despite the recent hike in oil prices, with Brent crude at $119 per barrel, UAE airlines will not add more fuel surcharges to ticket prices, according to several carriers.
Fuel price accounts for the largest share of an airline’s operating costs, thus, price fluctuations can instantaneously reflect on airfares.
The world’s largest long-haul operator, Emirates Airline said there are no plans to introduce further surcharges in June.
“With the increase in operating cost, we are trying not to push more expenses to the consumer side, yet, there is a limit to how much we can absorb,” Emirates’ Chief Commercial Officer, Adnan Kazim told Aviation Business Middle East.
The airline has recently introduced an extra charge of $68 (AED250) on Dubai-Delhi routes, and an average of $92 (AED340) on long-haul routes including London. Meanwhile, ultra-long-haul routes to Newyork saw a $157 (AED580) surcharge to meet the global upsurge in fuel expenses.
On its part, the Dubai-based budget carrier, flydubai is closely monitoring the market for fluctuations and added operating costs.
“We constantly monitor fares, and these can go up or down depending on many external factors, including the price of fuel, currency fluctuations or market forces,” the company stated, noting that “Fuel is our single biggest cost, and we are not immune to price fluctuations but do take every step we can to keep our fares as low as possible.”
Correspondingly, the UAE’s flag carrier, Etihad Airways will keep its current fuel surcharge of $49 (AED180) on flights to Delhi, with no announced plans to introduce additional costs in June.
Fuel price accounts for the largest share of an airline’s operating costs, thus, price fluctuations can instantaneously reflect on ticket prices.
A fuel surcharge is an added cost imposed by airlines to meet a corresponding hike in fuel prices. The surcharge is decided by each airline and varies from one route to the other.
The ongoing conflict between Russia and Ukraine paired with a global surge in diesel production at the expense of jet fuel is set to drive further hikes in ticket prices, especially with passenger traffic and capacity steadily.
Moreover, the ease of COVID-19 restrictions in China will further increase the demand for jet fuel, particularly by mid-summer, a peak season for air travel.
A global impact
While the GCC region is one of the world’s largest oil producers, local carriers are not necessarily immune to price hikes, taking into consideration the global impact of price increases.
Over recent months, jet fuel prices have more than doubled, reaching $166 per barrel at the Singapore hub, $151 in the Middle East and Africa, $160 in North America, and $163 in Europe in late May.