Gas Pains: Airlines Raise Fares Again

Fueled by record highs of oil — above $67 a barrel on Friday — most airlines are raising their fares $6-10/route to compensate for prices they pay for jet fuel. In fact, the price of U.S. oil rose more than 7% this past week. More amazingly, it’s climbed over 50% since January. With growing global demand because of China’s booming economy and overall short supply this summer, we have the perfect storm of ingredients for increasingly higher fuel prices.

What could be worse? How about not enough jet fuel to even get planes off the ground. Because of occasional supply bottlenecks this week, some airlines were forced to fly in extra fuel from other markets and also had to scramble for deliveries by truck.

What will eliminate this bottleneck problem? Better, wider pipelines to feed the major US airports. The airlines are working with their suppliers but experts say it will take time to resolve the shortages.

Posted by Gil Zeimer on August 13, 2005 in Travel

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