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SriLankan Airlines is raising fares by five percent from October 1, as twin effects of a falling rupee and rising oil prices chips away profits. The national carrier got Civil Aviation Authority (CAA) consent in Aug., for a fare hike, the first in almost three years, says G T Jeyseelan, Head of Commercial SriLankan.
In July, SriLankan slapped a US$ 5 to US$ 10 fuel surcharge to cover fuel costs, but another request for a similar oil surcharge is still pending before the CAA.
Aviation fuel prices have surged 65 percent in the past year. Jet fuel prices were US$ 0.98 a gallon last year. The airline budgeted for US$ 1.15 a gallon this year, but is now paying around US$ 1.
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Fuel accounts for roughly 20 percent of an airline's costs, with every increase of one US cent in oil prices adding US$ 1 mn to its fuel bill, Jeyeseelan says, while not disclosing the cost of the increase to SriLankan.
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The International Air Transport Association said recently that airlines may lose as much as a com