One of the serious problems we are facing today is the energy crisis , which is creating the turbulent climate we are currently living through.
The war in Ukraine and the diplomatic problems that may arise with energy-producing countries could lead to an unprecedented rise in gas and oil prices.
Oil prices and changes in airline ticket prices
This upheaval in crude oil prices may have a negative impact on long-haul tourism to our country, as air fares are starting to rise.
For a tourism sector that has already invested in hotel equipment (such as electronic locks, contactless check-in systems, cleaning trolleys, etc.), a fall in bookings due to last-minute cancellations could be a severe blow.
But… what affects the price of air tickets? Do we really know what we are paying for when we book with an airline? Let's shed some light on the subject.
Air ticket prices in relation to the Brent barrel
Airlines are hugely affected by changes in crude oil prices, so to protect themselves against sharp fuel price rises, they charge a fuel surcharge.
The price of an air ticket can be broken down as follows:
- Fare (the price per route and flight)
- Taxes (airport, security, etc.)
- Luggage
- Ticket issuing fees
- Other charges and services offered (VIP lounge access, minimum stay, cancellation, etc.)
- (*) Fuel surcharge
What is the fuel surcharge on air tickets?
The fuel surcharge is the extra charge airlines apply based on fluctuations in the price of oil.
Airlines also base it on:
- Flight duration
- The country where the flight takes place
- The ticket type (i.e. it applies to all passengers on the plane)
- The final destination
However, airlines buy fuel in bulk and can guarantee fixed ticket prices for a certain period, but price changes can eat into their margins, leading them to pass the extra cost on to customers.
Oil price stabilisation
All we can do is hope that EU governments find a solution to de-escalate the military and diplomatic conflicts with gas and oil producers.
With encouraging booking figures reaching levels similar to 2019, failing to contain the price of a barrel could have catastrophic consequences for a sector already hit hard by the COVID-19 pandemic.
