COSTS AND TICKET PRICES
Passing costs on to consumers is inevitable, aviation analysts said.
Mr Patel said aviation fuel accounts for 20 to 30 per cent of an airline’s operating expenses.
“Airlines may be forced to raise ticket prices by between 5 per cent and 10 per cent, or more, if carriers fail to optimise operational costs and fuel management strategies,” said Mr Patel.
The SIA spokesperson said fuel costs accounted for about 30 per cent of the airline group’s expenditure, making it the airline’s single largest cost item.
The spokesperson added that the fare hikes partially defray the higher fuel costs, but do not fully cover the increase.
“SIA and Scoot will monitor the situation closely and make further adjustments, as necessary,” the spokesperson said.
SIA also announced earlier this month that it will cancel flights to Dubai until Apr 30 amid the conflict.
AirAsia X’s deputy group chief executive officer, Mr Farouk Kamal, said the airline will “dynamically monitor market conditions and react proactively as and when needed”.
The adjustment to the fuel surcharges was necessary and will allow the airline to maintain operational reliability while sustaining its network connectivity across the region, Mr Farouk added.
Mr Alfred Chua, Asia air transport editor for aviation publication FlightGlobal, said any fluctuation in fuel prices will have a significant impact on airline profitability.
One reason is that the industry already operates on thin margins, he said. Data from the International Air Transport Association (IATA) showed that airlines made an average net profit of about US$7 per passenger in 2025.
To mitigate the impact, airlines can pass on costs in two ways: through fuel surcharges or by increasing base ticket prices. A fuel surcharge is an additional variable fee added to a ticket’s base fare.
Mr Chua said airlines will likely increase fuel surcharges as a “first line of mitigation” before raising base fares to cope with rising costs.
Suspending flights or reducing the frequency of flights is another strategy airlines have adopted to cut costs, as seen with Cebu Pacific.
https://www.channelnewsasia.com/asia/airlines-asia-raising-fares-singapore-scoot-cathay-strait-hormuz-middle-east-war-6015711
