Air Canada (AC-T) the airline industry, still reeling from the COVID-19 pandemic, is facing a new challenge as soaring fuel prices drive up the cost of travel.
Jet fuel prices are shooting up along with the cost of oil, driven higher by sanctions on Russian crude exports and uncertainty over supplies. Fuel prices rose by 27.5 per cent last week to more than $141 (U.S.) a barrel, a increase of 96 per cent from a year ago.
Peter Fitzpatrick, an Air Canada spokesman, declined to discuss how fuel prices will affect airfares, citing regulatory constraints. Air Canada charges customers an "airline surcharge" that is partly driven by fuel prices. "A number of factors go into airline ticket pricing apart from fuel and fixed costs, including but not limited to, competition, demand, third-party navigation, airport and other charges, marketing considerations and the type of traffic that a route serves,"
Mr. Fitzpatrick said in a statement to The Globe. Investors are already worried. Air Canada's share price has declined by 16 per cent since Russia invaded Ukraine on Feb. 24. Air Canada closed Thursday at $20.80, down 17 cents on the Toronto Stock Exchange. |
