Caribbean Airlines (CAL) will add a US$15-25 fuel surcharge to all regional and international tickets. The surcharge will apply per sector and will be applied to all tickets purchased on or before April 10. Tickets bought before April 10 will not attract the fuel surcharge. However, tickets for flights between Trinidad and Tobago will remain unaffected.
The announcement comes as the aviation industry grapples with soaring global jet fuel prices due to the US/Israel-Iran conflict. In a statement yesterday, the airline said the fuel surcharge only helps to offset a portion of the rising costs and CAL will continue to absorb a significant share of the costs in a bid to minimise the impact on passengers. The airline also said its base fare remain unchanged.
Airlines across the world have been introducing fuel surcharges, cutting capacity, and raising baggage fees as they seek to offset the additional fuel costs, which in some cases are accounting for approximately 50 per cent of operating costs when it usually is around 27 per cent. At least five American carriers have raised baggage fees by $10, with the latest announcements coming yesterday from Dallas-based American Airlines and Seattle-based Alaska Airlines.
In a statement to Guardian Media, Caribbean Airlines said “no decisions have been made at this time regarding any increase” in baggage fees but the airline continues to review its cost structure.
While CAL’s base fares aren’t increasing, the additional fuel surcharge means ticket prices will go up.
According to International Air Transport Association (IATA) president general Willie Walsh, higher fares, at least in the short term, are inevitable.
Speaking at IATA’s World Data Symposium in Singapore on Wednesday Walsh said, “What the industry struggles with is the short-term reaction to the rapid increase, and it’s how quickly we can respond to that…This is not a crisis that is anywhere close to what we experienced in COVID. And airlines still have a lot of levers that they can pull to respond to this, but the immediate one will be to reflect the higher costs through higher ticket prices. It’s just inevitable that that will happen.”
He said most airlines should be able to navigate their way through this latest challenge once they take sensible decisions, but did raise concerns about the possibility of fuel shortages even if the two-week ceasefire deal between the US and Iran holds.
“The concern at the moment is around the potential shortage of the refined product of jet,” he said.
Adding that “It will take some time for refineries outside of the region to adapt and increase the supply of jet [fuel]. But India has the capacity to increase refining, Nigeria, big refinery there. So, you know, we could see an increase in the refined product, it will take a bit of time to adjust. Then there has been damage to some of the infrastructure for the refineries, and that will take time to recover.” Walsh is predicting that prices will return to where they were by the end of the year.
IATA is a trade organisation that represents over 360 of the world’s airlines.
