Ukraine International Airlines (UIA) has announced that the dramatic increase in fuel prices will force the airline to raise fuel surcharges.Figures from the International Air Transport Association (IATA) show that every one dollar increase in the cost of oil per barrel increases the airline industries costs by approximately $1billion.
Higher fuel prices are undermining recovery in the airline industry and crippling many airlines, and although UIA has avoided increasing fuel surcharges to date, the carrier reports that this is no longer possible.
The airline's president, Yuri Miroshnikov, said: “Every 1% increase in fuel costs wipes $1million off our bottom line. Aviation is probably the most competitive industry in the world. Costs continued to increase while fares continued to fall. We are now at the point where airlines are heavily subsidising their passengers’ travel. Fuel costs alone account for more than one third of the Airline’s costs.
"At present fuel costs for us are more than $80 per passenger and on average, $160 of every round trip fare must be paid out for fuel and many of our promotional fares do not even cover the cost of fuel.
"Higher fuel prices have a double negative impact on the airlines. While they have an obvious direct impact on the cost of operations they also trigger economic recessions, reducing the demand for air travel. The most frustrating aspect of these high fuel prices is that they are not caused by demand, but by speculation; people gambling on making a profit. If only real users were in the market, and speculators controlled, the cost of fuel would be significantly lower."
Meanwhile, the carrier has announced that it is introducing flights to Edinburgh up to five times weekly following a code-sharing agreement with British Midland International. The new route, which launches on April 1, is served via Brussels.