Travelers can expect high airfares this spring and summer, even on low-cost carriers.
Frontier Airlines CEO Barry Biffle told CNBC’s Closing Bell on Friday that add-ons such as bookings and the amount travelers pay for tickets and baggage charges are the highest in the pandemic.
“We believe we can make a profit this summer despite the high fuel prices,” Biffle said.
Jet fuel is generally the airline’s largest expense after labor costs, and has so far surged 80% in the United States this year as Western nations impose sanctions on Russia in protest of attacks on Ukraine. It has reached the highest level since March 2008.
“We need to raise fares gently,” Biffle said.
Frontier Airlines, based in Denver, does not hedge fuel by fixing prices using futures contracts. Some major US airlines, such as American Airlines, have abandoned their fuel hedging programs after oil prices soared in 2014. However, Southwest Airlines and Alaska Airlines continue to hedge.
Airlines are also struggling to increase staff in a tough labor market. During the pandemic, a $ 54 billion federal aid package banned U.S. carriers from dismissing staff, but carriers encourage thousands of employees to take early retirement or other optional packages. I urged you.