Travel agents tackle spiralling cost of tickets

Travel agents are tackling rising flight prices, as the crisis in the Middle East has sent oil prices skyrocketing.

The political turmoil in the region sent the price of crude up to over US$100 a barrel, anf the price of jet fuel has soared to a near three-year high.

Emirates, Qantas, Cathay Pacific, Qatar Airways and British Airways said they were adding charges to battle the steadily rising cost of jet fuel. And airlines have warned that further price rises could be on the way.

Mark Reed, managing director, Arabian Pacific said that while the increases were understandable from a commercial point of view, the timing of the flight increases were “not fully justifiable.”

“Airlines would have hedged their fuel, so the impact wouldn’t have been immediate to their bottom line. An increase in margin at this time by charging the extra will put some extra funds back in their pockets for the future.

Reed said travel agents were struggling from last minute price rises from the airlines: “From a travel trade point of view with many of the airlines the increase in prices was as usual not communicated very well (either very short notice or not at all in some cases). The overnight price hike in some cases had meant we initially had to try and justify price increases to our clients. I think in the future at least a seven-day notice period would be a fair to advise agents for any fuel increases.”

Agents said the price hikes had not dented travel demand as yet but warned that if travel costs continue to soar this would impact the trade.

Harvey Lines, director of operations, Africa and the Middle East, Wings Corporate Travel said “given the soaring price of oil and likelihood of continued fuel surcharges, we are working harder than ever to find ways to soften the impact of rising airfares in the future [for companies].”

Lines said there had been no impact on travel so far in the corporate sector “this shows that the demand is currently inelastic,” but he warned:  “should airlines continue to increase their fares or introduce new fuel surcharges it would primarily impact leisure travel, which is a discretionary expense.”

Lines said this could place the industry “under great pressure and depending on the extent and longevity of higher airfares, some travel agents could struggle to survive, especially if they are reliant upon leisure travel.”