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An expected jump in ticket prices on the verge of spring break, with fuel costs rising


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The price of a barrel of jet fuel jumped, according to the fuel index issued by the International Air Transport Association (IATA), during the week ending January 27, to $146 a barrel, an increase of 38.2% compared to the same period last year. The high demand for travel and the airlines charging the increase in the cost of fuel on ticket prices.

3 factors

There are 3 main factors that control ticket prices, represented by the cost of fuel, the volume of demand and the strength of competition on the tourist destination. The cost of fuel has increased significantly compared to last year in parallel with the growing demand for travel, which is expected with large increases in ticket prices, especially during holidays and long vacations.

Sources working in the travel sector said that airlines began monitoring the fuel price index to study a decision regarding raising fuel premium fees on travel tickets to cover part of the increase in aircraft fuel contracts during the past months.

Yassin Diab, Director General of Al-Faisal Agency for Travel and Tourism, said that airline prices during the current period are still within the normal levels, but they are likely to rise by the end of next month, in conjunction with school vacations and high demand for travel, in addition to the rise in fuel prices.

He added that fuel prices are among the main factors that cause ticket prices to rise, in addition to the strength of demand and the volume of competition for the destination between airlines, noting that if the rise in demand coincides with the rise in fuel prices, we expect a significant rise in ticket prices because airlines are forced to deal with high prices. Oil costs, being a very large share of total operating costs. Diab said that early booking before the high demand for travel is the best guarantee for obtaining lower prices, indicating that the difference in the price on the same flight may reach double if the reservation is made at the last moments.

High expected

Dr. Haitham Al-Haj Ali, CEO of Dubai Link, said that an expected rise in prices will take place before the month of Ramadan, coinciding with the school holidays. He added that the rise in oil prices increases pressure on airlines in general, whether economic or traditional, pointing out that there are ways to deal with the challenge of the continuous rise in fuel prices represented by imposing a new increase in the fuel tax, and this may be raised in the event of continued rise in fuel prices, knowing that Air carriers constantly monitor the fuel indicator.

According to the IATA index, the Middle East and Africa region recorded an increase in fuel prices by 22.3% to $125.7 per barrel, while the price of a barrel of jet fuel in Europe increased by the end of January by 26.3% to $143.8 per barrel.