Spiralling oil prices could be bad news for Canadian travellers, and it may only be a matter of time before higher costs are passed on to consumers.
Given the current cost of fuel, “we will be looking at a surcharge of some sort when current contracts and futures are over , in all modes of transportation , air , cruise and ground,” said Martin Firestone, head of Toronto-based Travel Secure.
Firestone said companies that ship cars home for Canadians have jacked up rates by $150 per car.
“We can only speculate when this will trickle down to fuel surcharges etc… on plane tickets,” he said.
Jet fuel prices have doubled since the start of 2021, and there are reports that prices leapt 27% in the past week alone.
In an interview with the Globe and Mail, Firestone said the combination of pent-up demand and high fuel prices are a “perfect storm,” and that flight costs could go “through the roof.”
KAYAK officials said in a recent statement that they “anticipate that pricing for summer travel will continue to trend high due to demand and limited capacity, with added pressure from rising fuel prices (though it may take a couple of months to see the impact).”
According to
CNBC, Cowen & Co. airline analyst Helane Becker thinks it might take four months for air fares to catch up with rising fuel costs.
Air Canada told me they don’t comment on fuel prices, but said they’re currently not hedging fuel. They also noted that fuel is only one of many costs that airlines have to pay for, others being airport charges and route traffic.
“We always say ticket pricing is dynamic and that fares can change frequently, both up and down. However, one cannot assign a particular cause to any price movement that may occur because there are many elements that go into setting fares,’ said spokesman Peter Fitzpatrick.
“At this time, we have not increased fares, nor have we made any deliberate change to our systems in response to the rising cost of fuel,” said WestJet spokeswoman Morgan Bell. “Our inventories are automated to adjust based on demand and prices can increase due to demand for flights being higher than the supply.
“We currently have no fuel surcharge in place, we are of course monitoring conditions but have made no decisions at this time.”
Bell noted that Canada “has the highest regulatory cost burden in the world on air travel. While we continue to drive air fares lower, the taxes and fees associated with air travel have only gone up during the pandemic. As an example, of every $100 spent on airfare in Canada, 24 per cent goes to regulatory fees.”
A KAYAK study found that international flights for Canadians have already risen sharply, although domestic flight costs haven’t risen much at all.
“Prices for domestic flight routes across Canada are up six per cent compared to the same time period in 2019, but there are still deals to be found on some of the most popular domestic flight routes mostly out of Toronto,” officials said. “The price fluctuations we’re seeing, especially with regards to international routes which are up about 36 per cent compared to the same time period in 2019, are likely driven by eased travel restrictions and pent up travel demand.”
Here are some detailed charts.
The 5 most popular domestic flight routes within Canada
- Toronto → Vancouver
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- Average price: $218, a 39% decrease in average price compared to 2019
- Toronto → Calgary
Average price: $219, a 32% decrease in average price compared to 2019
- Vancouver → Toronto
Average price: $232, a 33% decrease in average price compared to 2019
- Toronto → Halifax
Average price: $187, a 16% decrease in average price compared to 2019
- Montreal → Vancouver
Average price: $356, an 18% decrease in average price compared to 2019
The most popular international flight routes originating in Canada
- Toronto → New Delhi, IN
Average price: $1,499, a 60% increase in average price, compared to 2019
- Toronto → Orlando, FL
Average price: $372, a 15% increase in average price, compared to 2019
- Vancouver → New Delhi, IN
Average price: $1,590, an 83% increase in average price, compared to 2019
- Toronto → Miami, FL
Average price: $413, a 19% increase in average price, compared to 2019
- Montreal → Fort Lauderdale, FL
Average price: $368, an 11% increase in average price, compared to 2019
- Toronto → Cancún, MX
Average price: $515, a 47% increase in average price, compared to 2019
- Toronto → London, GB
Average price: $633, an 8% increase in average price, compared to 2019
- Toronto → New York, NY
Average price: $263, a 30% increase in average price, compared to 2019
- Montreal → Paris, FR
Average price: $613, an 11% increase in average price, compared to 2019
- Montreal → Miami, FL
Average price: $349, a 2% decrease in average price, compared to 2019
