Air Transat, Air Canada adjusting ticket prices as jet fuel costs weigh on airlines

beam Transat is charging sir thomas more for flights to Europe and broadcast Canada is adjusting prices as the soaring be of gush fuel — triggered by an oil crisis that has emerged from the war in the Middle East — weighs on Canadian and international carriers.

"We have increased fuel surcharges on Europe. However, this is blended in the total price," said Jean-François Pruneau, chief financial officer at Air Transat, during the company's first quarter earnings call on Wednesday.

"What we're also doing is currently raising fares on peak travel dates and routes where we see less competition, where we have more flexibility," he told investors.

Several international airlines have added fuel surcharges — an extra fee tacked onto airfare to cover unforeseen oil costs — to account for a spike in jet fuel prices since the U.S. And Israel attacked Iran on Feb. 28, the start of a regional war that has disrupted the global supply of oil.

Hong Kong's Cathay Pacific announced overnight that a fuel surcharge is now included on all passenger tickets, noting that a surcharge for airfare purchased in Canada would double from $101 Cdn to $202.60 starting March 18.

Air New Zealand, Australia's Qantas Airways and Scandinavian Airlines have all announced that they would be hiking passenger fares. And Japan Airlines said it doesn't plan to bring forward fuel surcharge changes before April 1, as it evaluates those costs over a two-month period.

Other international airlines, like Lufthansa and Ryanair, have confirmed that they have a hedging system in place to temporary lock fuel prices in.

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Air Transat's Pruneau told investors tickets that have already been sold can be repriced, and said that if the company were to raise fares immediately it would see "a negative impact on demand."

The airline is also looking at other ways to save costs, "including restricting our expenses across the company to make sure that we're going to be able to deal with that fuel spike," he said.

The cost of jet fuel tends to be an airline's biggest expense, and it has soared since the conflict began. According to a price tracker published by the International Air Transport Association, the cost of jet fuel skyrocketed 58.4 per cent between Feb. 27 and March 6, from $99.40 US to $157.41 US per barrel.

A spokesperson for WestJet said on Wednesday that the situation in Iran "has already made operating flights more expensive ... Based on this, it’s likely further pricing adjustments may be needed."

A spokesperson for Porter Airlines said it's too soon to forecast how jet fuel prices will influence airfare, "but we are monitoring the situation closely." The spokesperson noted that the carrier does not have a fuel hedging strategy, nor does it operate flights to the Middle East.

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