Air travellers have to pay more

Zeenext Bureau
Passengers might have to pay extra to soar for a longer duration. To cope with increasing fuel costs, many airlines have increased their airfares. A sudden rise in jet fuel costs has cut sharply into airline profits and passengers are paying the price. Jet fuel prices in Northwest Europe are currently around $330 a ton, which is believed to be the costliest since 1990.
Smaller airlines have been hit hard
Though the bigger airlines can afford to hedge a larger proportion of their fuel cost expenditure, it is the smaller airlines, which have been hard hit. German airline Lufthansa has hedged more than 90 percent of its 2000 requirements and 60 percent for 2001 so far. Increasing ticket prices is the most effective way for smaller airlines to deal with the prohibitive cost of fuel.
Airfares have increased twice, by about 3 per cent, and the cargo department by around 10 to 15 per cent, according Tim Goodyear, spokesman of International Air Transport Association (IATA). With operating margins of less than 7 per cent an airline, scope for cost reductions in other areas must be exhausted at some point.