Airfares in Asia to rise

SINGAPORE – Asian travellers could face costlier air tickets as airlines struggle to cope with surging fuel prices. Industry analysts, however, said travel demand is not likely to dampen given the rapid growth of budget airlines. The broader concern is that the high oil prices would affect the global economy. “If oil prices are sustained at this level and begin to have an impact on the wider economy, it will affect travel demand,” said Andrew Herdman, director-general of the Association of Asia Pacific Airlines. In response to the rising prices, several Asian airlines such as Garuda Indonesia and Thai Airways have imposed a new round of fuel surcharge increases, thereby raising ticket prices, while others like Singapore Airlines and Malaysian Airlines said they are monitoring the changes. Higher oil prices are also encouraging further consolidation, especially in the low-cost carrier market. “I think business plans are looking quite different and there’s going to be a rationalisation for sure. It’s inevitable,” said AirAsia chief , Tony Fernandes in a media report.

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