DUBAI: Airlines worldwide will have to raise fares by about five percent to offset the spiraling fuel price surge over the last 12 months, the chief economist of the International Air Transport Association (IATA) said, Gulf News reported Monday. “With no sign of a significant decline in oil prices that are staying stubbornly above $100 a barrel, airlines are fighting to stay profitable and have pushed up ticket prices in order to recoup costs. They have had no choice but to hike fares,” IATA Chief Economist Brian Pearce was quoted as saying. “We are looking at a fare increase of at least five per cent. We have seen a five per cent increase in unit costs because of the rise in jet kerosene and that is with the [airline] industry having hedged 50 percent of this year's fuel bills. So we are going to see that five per cent reflected in airfares,” he added. Airline chiefs of Emirates and Qantas also echoed the same sentiment, the report said. “We may have to tend to our costs if oil prices go up to $150-$160 per barrel. And as long as the fuel stays at $100 per barrel plus, the whole industry is going to face real problems,” the paper quoted Emirates Airline president Tim Clark as saying. Alan Joyce, CEO of the Australian airline Qantas said the industry will see more fare increases in 2011. The carrier has already raised fare charges and fuel surcharges many times this year, the report said. “The increases have still not recovered the additional fuel costs,” Joyce said.
