Emirates airline, the region’s largest carrier, has hiked fares across all sectors as it is unable to absorb soaring fuel prices, the company said in a statement to Emirates 24|7.
“Like every commercially-oriented business, Emirates regularly reviews its fares to reflect market dynamics including demand and rising fuel prices,” an Emirates spokesperson said in the statement.
“We have an active fuel risk management programme but with such market volatility it is impossible to fully absorb the impact of soaring oil prices,” the statement added.
Global oil prices are up almost 50 per cent in a year, with a barrel of Brent crude up from $76/b on March 1, 2010, to today’s early morning trade at $112.35/b.
“We remain committed to providing our customers with excellent service and a strong value-for-money proposition,” Emirates added.
The airline said the increase in fares “differs by markets and routes,” but declined to provide any further details. “We do not wish to go into more detail,” the spokesperson said.
Surging oil prices due to political turmoil in the Middle East spell “very, very big challenges” for airlines, International Air Transport Association (IATA) chief Giovanni Bisignani said last week.
“Oil is a big problem because it could change completely the picture” for the sector, he said. Bisignani added high energy prices could turn what had been “forecast to be a profitable year into a very complicated year”.
Airlines are facing “very very big challenges” due to the high oil prices, he told a press conference in Tokyo.
The political unrest that has swept the key oil-producing Middle East and North African region has stoked fears of disruption to global crude supplies and led to price spikes.
IATA recently predicted passenger traffic would grow for the second consecutive year after its crisis-driven drop in 2008, but it said net profits for airlines as a whole would fall 40 per cent to $9.1 billion in 2011.
The forecast was based on an oil price of $84 per barrel for Brent crude.