Travel becomes more expensive. The increase in the price of fuel and the rise in demand after the pandemic it is beginning to be noticed in the price of plane tickets rising in the face of summer. “There are wholesalers who have assumed the increase because they did not want to raise prices, but others are raising the price,” acknowledges the manager of the Spanish Confederation of Travel Agencies (CEAV), Mercedes Tejero. In this case, the rise in bills for fuel is easily attributable because it represents a additional supplement to the reservation and occurs, above all, in the long haul packets.
According to Royal Decree-Law 23/2018 that regulates package toursonce the reservation is made and the contract is signed, the tour operator can add a supplement that increases the price up to 20 days before the start of the trip in three cases: due to an increase in the price of transport for the fuel hikeby a tax increase or for the currency exchange rate. “It is not something arbitrary but rather it has to be established by contract and there are some fairly strong legal guarantees“, adds Tejero. In the event that the increase exceed 8% of the total costthe passenger can break the contract in a “reasonable time” without penalty.
Tour operators can raise the price of reservations up to 20 days before the start of the trip due to the rise in fuel
“It’s something that has started nowfacing the summer, and many are assuming it so as not to lose clients with cancellations, but it is very likely that in the face of autumn keep going up“, assures Tejero. holiday catalogs they are made three or four months ahead, which means that in a situation of rising prices like the current one that began in March, they are outdated. “In January the catalogs (of combined trips) Of summer, that is why there are some wholesalers who have raised their prices; but if the price of fuel continues like this new offers made will have current prices y the trip will be more expensive“, Tejero adds.
The fuel represents between 25% and 30% of the total costs of the aircraftaccording to sources from the Airline Association (ALA). The employers of the sector, groups airlines that account for 85% of the traffic in Spain, explains that Each company has a different scheme regarding the combustible: some have contracts for a term of one or two years that assures them a fixed price during that period (hedges) and that keeps them isolated from a price rise like the current one, while others without coverage are more exposed. An example of the latter was the portuguese airline TAP who in March announced a rise in bills for this issue.
However, if the situation continues over time, the new covers that are carried out will also be more high, which will also affect the new banknotes, although in this one it is almost more difficult to perceive. “Each company has a different coveragebut more than a short-term effect, I would say that it will be a medium and long term effect“, they explain from this employer’s association. This was also assured by the president of Air Nostrum, Carlos Bertomeua week ago when acknowledging that this issue “smells worrying” due to the impact it is going to have on the buying kerosene futures, according to EFE. The airline has covered 80% of the fuel until 2023 at an agreed price that is half of the current. Like Iberiawith coverage of 60% for this year and 30% for 2023, or Ryanair that has 80% of its fuel covered at a price “well below” the current one.
In the case of irish airlinethe executive chairman of the group, Michael O’Learyindicated on Tuesday that the summer rates could be between 7% and 9% more expensive compared to 2019, before the pandemic, by anticipating a top occupancy to the one before covid, in statements to Reuters. “The airline sector is no stranger to the interaction between supply and demand and that sets the price. It is true that in recent months demand has been off, but in the summer it rises and that exerts price pressure,” they explain from ALA.