'Buy now,' say experts as flight fares expected to soar amid rising fuel costs

WATCH: Personal finance expert Rubina Ahmed-Haq gives insight on the staggering gas prices and shares a few tips to save money at the pumps.

Fuel prices have continued to soar across the country over the past few weeks, impacting everyday lives of Canadians.

Beyond the daily commute, the skyrocketing cost of fuel is also likely to affect how much you’ll spend on an airplane ticket, experts say.

Read more:

Gas prices continue rising despite dip in crude oil price

“No question, when oil goes up, airline prices go up — which affects travel,” Richard Vanderlubbe, president of TripCentral.ca told Global News.

“Fuel is a major factor in airline cost structure so it always has an effect,” he said.

Booking your ticket early is the way to go, according to Vanderlubbe.

“Often, you can overthink this by trying to play games with waiting and seeing what would happen,” he said.

“That’s probably not a good idea right now.”

Purchasing a ticket sooner rather than later is also something David Gillen, director for transportation studies at the University of British Columbia (UBC), recommends. Gillen is also a professor at the university’s Sauder School of Business.

“Fuel is going to impact air travel. Airfares are going to increase. Yet on the other hand, the substitution for air travel is car travel and you’re faced with the same problems,” he said, noting the price of oil is expected to stay on the rise.

It’s important to investigate the fine print to make sure the ticket you’re purchasing is really worth your money, according to Marc-David Seidel of the University of British Columbia’s (UBC) Sauder School of Business.

“Assuming the refund policy and procedures are acceptable, then by all means, buy now to lock in the price. If the price goes up they will have purchased at a lower price,” he said.

“If the price goes down, and they have properly identified a workable refund process, they will get the difference back.”

Vanderlubbe echoed this tip, saying sometimes it’s better to pay a bit more to have added flexibility when it comes to the terms and conditions of your ticket.

Going forward, it’s hard to predict how oil prices will impact travel because they can quickly change as various countries increase or decrease supply and demand, Seidel noted.

More generally, he recommends for consumers to consider ways to reduce their overall carbon footprint when possible.

Read more:

Canadian dollar no longer rising with oil prices, adding to inflation

“Consider trips closer to home, or using alternate transportation means that have less of a carbon impact,” he said.

Gillen reminds travellers the flight is only one part of the journey fuel prices will impact.

“Air travelling is only one component of travelling. Both at the origin and the destination, there’s lots of other stuff going on,” he said, noting rental car services may be another component of a trip.

As the end of January came around, travel demand began increasing, according to Vanderlubbe. This demand only continued to soar as Canada relaxed border testing requirements and parts of the country loosened restrictions, he said.

“It’s a very fluid situation, generally positive on the pandemic side but everybody knows something could go sideways again.”

Although demand has started to boom again as pandemic restrictions begin to lift, the price of fuel will be another hurdle for airlines to tackle.

Transat A.T. Inc. felt the pain of the Omicron variant last quarter, but saw bookings rebound as COVID-19 measures eased, leaving the tour operator’s CEO “cautiously optimistic” but wary of skyrocketing fuel prices.

Between mid-December and mid-January, cancellations outpaced bookings as the new coronavirus strain mushroomed, reversing an upward sales trend through the fall.

The swerve forced the company to cancel 30 per cent of its January flights and prompted a $114-million net loss in the quarter ending Jan. 31, a drop of 89 per cent from losses a year earlier.

For Delta Air Lines, fuel prices started going up last year. In the Dec. 2021 quarter, the airline saw a $55-million increase compared to their September 2021 quarter, according to a press release from the company.

The airline has not increased fares or made changes to their system in response to the rising cost of fuel at this time, a spokesperson told Global News, noting prices could, however, rise due to demand for flights being higher than the supply.

Read more:

The world is reliant on oil. The war in Ukraine could change that

“We currently have no fuel surcharge in place. We are of course monitoring conditions but have made no decisions at this time,” they said.

Gas prices in Canada are expected to continue climbing upward, according to Dan McTeague, president of Canadians for Affordable Energy.

Around this time last year, the average gas price in Canada sat at 1.24/L. Now with a more than 60-per cent increase, this isn’t like anything Canada has ever seen.

“It’s just not something we’ve ever experienced in at any time in our past,” he said.

gas prices

Gas prices are displayed at a Petro Canada gasoline station in Ajax, Ont., Monday, March 7, 2022.

THE CANADIAN PRESS/Doug Ives

At the pump, Vancouver has watched the price reach over $2 a litre. In Ontario, gas is also starting to creep around $2 per litre. In Manitoba on Sunday, prices reached $1.64 per litre.

Regardless where you are in Canada, gas prices are truly “beyond any expectations,” McTeague said.

© 2022 Global News, a division of Corus Entertainment Inc.

You May Also Like

Top Stories