High fuel prices cause rise in Australian low-cost airfares

Airline Industry Information, Oct 16, 2000

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The high cost of aviation fuel has given Australia's low cost carriers cause to review their pricing policies, with Impulse Airlines indicating that this will take place as early as this week.

Gerry McGowan of Impulse Airlines has stated that the cost of aviation fuel had increased from about USD13 per barrel to USD42 per barrel, with each one cent per litre increase equating to a rise in annual costs of about AUD400,000 for the carrier.

McGowan indicated that whilst the carrier's business plan had accounted for rising fuel costs, oil prices were currently going beyond 'where they've ever been before, and certainly they will impact on an airline' according to News Limited.

McGowan also indicated however that Impulse Airlines should be able to keep any airfare increases below 10%.

Virgin Blue, meanwhile, has stated that it is monitoring current economic conditions and that it does not have any immediate plans to increase fares. However a spokesperson for the carrier indicated that it was heading in the 'increased airfares direction' and was likely to 'follow suit at some stage.'

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