The cost of fuel is going up and airlines are not taking it down. Air Chathams ceo Duane Emeny (pictured) says the big corporate suppliers need to be called out on this pricing behaviour.
Emeny showed Travel Today a copy of a letter he received from Air BP overnight, advising that Avgas will be increasing 34.9 cents per litre and Jet A1 95.6 cents a litre, this coming into effect on all deliveries from 10 Mar onwards.
Emeny says this is a huge increase, adding that he is not sure how they justify it given that the majority of fuel purchased under PAP (price at pump) is located at smaller regional airports where the fuel turnover is weeks not days per refill. “So the fuel we are taking now was supplied well before the impact of current Middle East conflict.” For travellers, this will lead to fare increases, says Emeny.
“That just hurts the consumer and adds to inflation which is already top of the RBNZ bracket,” adds the airline ceo. Kiwis can also expect less flights as Emeny explains that airlines will look to reduce fuel burn and not operate those that will cost more to fly than revenue gained.
. . . Solutions
It’s not all doom and gloom; there are ways to mitigate the impact of fuel rises. Emeny says this should be treated as a crisis similar to C-19, where the government was able to temporarily pause costs under their agency control, such as CAA Levies and the cost of Airways.
“Cumulatively these costs for 3C are over $200k per month, which would soak up around 75-80% of fuel cost increase,” he adds. As reported in yesterday’s issue of Travel Today, Air New Zealand is exposed to additional daily fuel costs of $4 million to $5 million a day as oil prices spiral. See the details HERE.
