Cost Jetbeam of costs
The Americans' news came the same morning Hawaiian Air Lines stopped flying from Honolulu to Beijing. Australia's airline, however, anticipates that its aviation expenditure will rise by 690 million US dollars in the next financial year. Others have a wide range of policies in place to tackle the rising cost of aviation fuels while avoiding higher fares for air travel.
Southwest Airlines, for example, is not expecting any significant effects from the rise, as its organisation has already adapted to the rise in the cost of fuels some years ago. "Southwest Airlines SVP's Andrew Watterson said to Avionics in an early 2018 International Aviation Forecast Summit review, "We really had to overtake the business in the higher cost period early this year.
Southwest' aviation cost of fuels rose $241 million in the first half of 2018, according to the airline's second quarterly results of operations. The southwest, however, did not have to increase tariffs as it was operated at the level of jet engines in the last year before the price drop in 2014 instead of adapting them in the meantime.
Between 2014 and 2015, the U.S. Bureau of Transportation Statistics reported a total decrease of $16.5 billion in expenditures by U.S. commercial carriers for jet aircraft jet fuels. By 2015, the cost of jet fuels had fallen to $1.53 per gal, down from an annual $2.92 per gal between 2011 and 2014.
"We' ve restructured our business to be profitably higher at higher cost of fuels, we have to a certain degree compensated for this rise, but we still make sure that our material expenses are behaving correctly," Watterson said. "And I think that you will see an increasing emphasis on this with many airline companies. "The response to the rise in kerosene prices will vary depending on where carriers are flying, how often they are flying and the kind of customers they cater to.
"There is still a very price-sensitive client and it is very difficult to push through any kind of ticket increases, whether through petrol or otherwise, the best leverage we have to do is to reduce capacities a little and then, of course, alter the ticket prices equilibrium between offer and demand," Wells said.
However, the pressure exerted by the economies of Argentina, Brazil and Venezuela on airline companies in this region varied. Whilst Panama City, Panama-based Copa airlines is faced with higher gas fare rates, many of the travelers who serve them can easily afford no rate increases, says Copa SVP of Dennis Cary's business and scheduling.
Kerosene expenses rose 50% at Copa in the second Quarter. According to Cary, 35 points of this rise is due to the higher cost of fuels itself, with the other 15 points being due to Copa consuming more gas because it has flown more available seating mileage than in the same 2017 timeframe.
Copa manager said the company is not involved in securing fuels as the company's policy has never worked for it in the past. He said Cary expected Copa and other carriers to adapt capacities between September and November when flight demands of course fall. "I' m sure we will see the same from some of our rivals, because the overall operation of the business is relatively smooth compared to these higher cost of ownership and the base offer and enquiry say the offer needs to be reduced," Cary said.