Plane Tix

Last year, the Brent type raw material rose by almost 57% to over $75 per barrell. The situation is likely to worsen for the airline companies. The latest IATA forecasts show that the kerosene will cost up to USD 84 per barrell.

Given that aviation fuels account for around 25 per cent of an airline's total operational expenditure, it can be expected that carriers will share the burden with the consumer. Reuters said Doug Parker, CEO of American Airlines, warned the amount at IATA's annual meeting with travel sector executives that ticketing rates would rise as carriers reduced the number of places for sale to cut down on transportation bills.

"Crude petroleum is our second biggest output, so if it rises, the costs of airline trips will rise," said the CEO of American Airlines in late April. Parker actually found that in the two week period before the call alone, the price of petrol had risen by an unbelievable 12%. Increasing gasoline price levels are anticipated to have an industry-wide impact.

In 2018, IATA anticipates that overall airline earnings worldwide will contract by 12% to $33.8 billion, although traffic is forecast to increase by 7%. The North American airline sector is estimated to make $15 billion, or 44%, of the industry's worldwide earnings. From mid-2014 to early 2015, oil price dropped by more than 55% to around $50 per barrele.

The years since low -cost fuels and careful expansion combined with the boom in airline sales have heralded the most lucrative period in the US airline industry's past. Reduced oil surcharges have also led to lower ticketing costs. The US Department of Transportation reports that the US airline fare declined 15% from $410 in 2014 to $347 in 2017.