Asian travelers face costlier air tickets after oil breached US$60 a barrel, but the impact on demand should be limited amid rapid growth in no-frills travel, industry analysts said.
Airlines' profits are expected to be hit the hardest as jet fuel costs account for an increasingly greater share of their expenses, ranging from 17 percent to 40 percent of total expenditures, aviation and tourism analysts said.
"A broader concern is what impact high oil prices have on 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.
"The longer we see these higher oil prices being sustained, the risk that you see a global slowdown in economic growth continues to rise," he said.
"At this stage, it does not seem to be dampening travel demand, which remains firm," he said.
After oil prices pushed to nearly US$61 a barrel last week, some Asian airlines imposed a new round of fuel surcharge increases -- effectively raising ticket prices -- while other carriers are waiting on the wings.
Some airlines said they would rather absorb the costs.
Garuda Indonesia, for whom jet fuel accounts for 30 percent of total costs, has raised fuel surcharges on Australia, Japan, China and Middle East routes by around US$10 to US$15, airline spokesman Pudjobroto said.
Thai Airways raised fuel surcharges for domestic flights from July 1, but current international flight surcharges of between US$15 and US$25 per ticket were unchanged.
Bangkok Airways will introduce new fuel surcharges for international and domestic flights from July 15.
Singapore Airlines and Malaysian Airlines said they were monitoring the oil price changes. Philippine Airlines said it was mulling a second fuel surcharge rise in as many months and Vietnam Airlines said it had applied for an increase.
Asia's biggest carrier Japan Airlines as well as All Nippon Airways said they had no plans to raise fuel surcharges in the near future.
Australia's Qantas said it had no immediate plans to raise fuel surcharges, which already stand at US$15.20 for domestic travel and US$45.60 for international routes.
Air New Zealand, which downgraded its profit forecast due to rising fuel costs, also said it had no plans for an increase but would do so in the future if necessary.
Chinese airlines said competition was so tough they had no way of passing the extra costs to the consumers, while Indian carriers have held off on any new increases.
John Koldowski, a managing director at the Pacific Asia Travel Association, said the biggest impact of higher ticket prices could be on the duration of family leisure trips -- a point seconded by Don Birch, chief executive of air ticketing and reservations firm Abacus International.
A family of four may decide to have only a six-day holiday instead of 10 days as originally planned, Koldowski said.
Both Koldowski and Birch said business travel would be unaffected.
"It's bound to have some effect in some areas, but the volume of demand now is such that you might see a slight blip but not a prolonged one," Koldowski said.
He noted that holidays are no longer seen as a luxury by many Asians, and given the wider range of choices offered by premium and budget carriers, a lot of them would still choose to travel.
Birch said competition from budget carriers had brought down ticket prices overall, and the effect of higher fuel surcharges would vary between countries.
"There must be some impact but I think it's being offset by robust economic growth and by the overall downward trend in airline fares," he said.
James Vaile, chairman of newly launched Asia-Pacific travel search engine Bezurk.com, said higher fuel surcharges were likely to drive travellers towards "comparative shopping" for the best deals.
Higher oil prices are also encouraging further consolidation in the industry, especially in the crowded budget carrier market.
Singapore-based Jetstar Asia -- which is backed by Qantas -- is in talks with rival Valuair for a possible alliance.
"I think the competition is getting incredibly intense and it doesn't help that jet fuel prices are going up again," said Shukor Yusof, an aviation writer with US credit rating agency Standard and Poor's.
"For airlines -- like the low-cost carriers -- that do not hedge [their fuel costs], I think it's going to be extremely difficult to run the business. So it makes sense for them to explore working together," he said.
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