The geopolitical situation in the Mideast has caused oil prices to sky rocket over the past few days causing airlines more headaches with the fuel costs.
A new round of fare increases have taken hold this week, and fuel surcharges are being implemented or increased on international flights.
The airlines have no choice but to increase fares, reduce capacity, frequency and eliminate or cancel flights.
Already the high fares are resulting in reduced demand. The situation is most dire for the last minute business traveler as some fares have gone up by an average of $80 over the last round of increase announced just two weeks ago.
Airlines often are caught on the wrong side of fuel hedging. Most airlines purchase fuel on the spot market or near term contracts. The double digit increase in the past two weeks will dampen demand.
www.premieretravel.com
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