Air travelers are bracing for costlier air travels as international airlines mull raising air fares as a result of continued high fuel prices. Singapore Airlines, for one, announced Sunday that it will increase its fuel surcharge for tickets issued on or after March 8, 2012 amid mounting fuel surcharges. Jet fuel prices have been increasing and fuel now accounts for 40 percent of SIA Group expenditure, the company said in a statement. The new fuel surcharge levels shown below will apply to Singapore Airlines and SilkAir flights. They represent an increase of between USD2 and USD28 per sector, depending on the distance and class of travel. The application of fuel surcharges may be subject to regulatory approval or variation in some individual markets. The adjustments will offer only partial relief from the higher operating costs arising from increases in the price of jet fuel. Singapore Airlines will continue to closely monitor the price of fuel and keep surcharges under constant review, the statement added. In the US, airfares are up and headed higher this summer. Airlines blame soaring fuel prices which could cost them billions more than last year. That means fares, which normally rise as the summer travel season nears, could increase faster than usual. Airlines have already pushed through two price increases this year, and it's only February, when leisure travel is slow. It's a sign of things to come. "You'll see gradual increases and then a much bigger jump in April and May when people start shopping for the summer travel season," said Rick Seaney, CEO of travel website FareCompare.com. The latest data on average fares show that Southwest charged $140 each way during the fourth quarter, JetBlue charged $156 and United Continental charged $270. Length of flight accounted for most of the difference - on a per-mile basis, prices were similar. The average fare rose 9 percent between January 2011 and January 2012, according to Airlines for America, a trade group of the biggest carriers. Fuel is driving the increases. The spot price of jet fuel rose 18 percent over the same period, according to government figures. Airlines burn 48 million gallons per day, making fuel their biggest expense. There's little that airlines can do about fuel prices. They hedge, which is like buying insurance against big price spikes, and they've been adding more-efficient planes, but it takes years to replace a whole fleet. The simplest response is to raise fares - that's what they did nearly a dozen times last year. Airlines will respond to higher fuel prices this year by boosting fares, running fewer sales, and cutting some flights, predicted Deutsche Bank analyst Michael Linenberg. He noted that despite a weak economy last year, the seven carriers in Airlines for America used the same moves to boost revenue by $14.1 billion, more than offsetting a $12.2 billion increase in fuel spending. If they aren't careful, airlines could price more passengers out of the market. Kevin Mitchell of the Business Travel Coalition, which represents corporate travel managers, says big corporations have set their travel budgets for the year. But at smaller firms, he says, "if it feels like it's getting more expensive, they'll cut back or look for cheaper ways to do things." The big airlines have tried to raise prices four times this year and succeeded twice. When they failed, it was because discount airlines such as Southwest and JetBlue declined to go along. Consumers will change airlines just to save a few dollars, and the Internet has made comparison-shopping much easier. Still, when it comes to setting prices, the airlines are dealing from a position of strength. Since 2008, mergers have eliminated three major US airline companies and reduced competition. That's made it easier for airlines to limit flights, charge higher prices, and return to profitability after losing money for most of the 2000 decade. At higher fuel costs, more routes become unprofitable and targets for the chopping block. That will make it harder for passengers to get where they want to go. Delta Air Lines will end flights between Miami and London in April. Demand was inconsistent, but "fuel is by far the biggest culprit there," said spokesman Trebor Banstetter. In announcing that AirTran Airways would stop flying to several cities later this year, Bob Jordan, the executive who runs Southwest Airlines' AirTran unit, says, "there are some markets that we simply cannot make work" at current fuel prices.
