Plane fares have been rising since the beginning of summer due to a continuing crisis on the aviatio

Plane fares have been rising since the beginning of summer due to a continuing crisis on the aviation fuel market. Rising fuel prices have threatened airlines survival and they are looking for every possible way to pass the increased cost onto passengers. However, it looks as though the carriers will not void losses completely, which may result in the bankruptcy of some of them. Waiting for the Price Rise At the beginning of June, Russians found that airplane tickets cost 40-50 percent more than in winter and a $40-45 surcharged was being applied to tours purchased in advance to relatively close destinations. RataNews, the informational resource of the Russian tourism industry union, reported that the Lantra-Tur Travel Co. had informed its partners that ticket all VIM Avia Moscow-Salonika flights will cost 30 more after June 25. Tez Tour said that the fuel surcharge on flights to Turkey from Moscow will increase by $40 on June 16. Because of the constantly growing prices for fuel, tour operators are forces to increase the fuel surcharges practically by 10 percent a month, says Capital Tour general director Inna Beltyukova. She calculates that prices for airline tickets to popular destinations have already increased in price by 30-50 percent compared to last year, and they continue to rise. Tatyana Vand, general director of the travel agency Vand International, says that Russian charter airlines flying to the most popular summering countries are demanding supplemental payments to air tickets practically every ten days because of rising fuel prices. According to Vand, a year ago, it cost 270-290 to fly from Moscow to Rimini and back. This year, it costs 350. Tickets from Moscow hotels in hollywood to Barcelona have risen by 70-80. Tour operators demand for distant trips to fall. Tourists with high incomes have already been to Thailand and Cuba more than once, and tours there will become simply inaccessible for middle-income clients because of the price, Beltyukova predicts. Fuel surcharges are not the only reason for rising airfares. Oleg Pantaleev, head of the Aviaport analytical service, mentions that fees for aviation navigational hotels in hollywood services and airport services have risen substantially this year as well, forcing carriers to increase their base fares. Second, ticket prices are always higher in summer hotels in hollywood because airlines compensate for losses they suffered in the winter, including autumn kerosene price hikes, he adds. The airlines confirm that. Mikhail Poluboyarinov, financial director of Aeroflot , says that the company planned for average growth hotels in hollywood of base fares by 6 percent but, in connection with a worsening economy because of fuel, they will be raised by no less than 10 percent by yearend. That is likely to be the case for the entire industry. We set our fare policy hotels in hollywood by market analysis and depending on how our competitors behave. If Aeroflot raises its fares by 10 percent, then we can raise ours to the limit of that number, S7 (Siberia) Airlines financial director Ilya Alexandrovsky explained. Fuel Dependence It seems that air passengers will have to pay in full for the fuel crisis that is hobbling the airlines. The average profitability of air carriage usually does not exceed 10 percent and fuel accounts for more than 50 percent of the cost of a flight. Airlines introduced a system of fuel levies as fixed markups added to the base fare after the fuel crisis four years ago, when the price of kerosene almost doubled in a year and a half. Some airlines were able to defend themselves against unexpected price hikes for fuel then that would have been disastrous to them before. The current crisis has forced even those companies that had created completely different models of income management to follow suit. In particular, Russia s first and so far only low-cost air carrier, Sky Express, imposed a 500-ruble fuel surcharge for the first time on January 1 and it has already raised it twice, before the May and June price increases for aviation fuel. Now the surcharge is 1000 rubles, which twice the airline s lowest fare. Large airlines today say that fuel surcharges cannot save them from losses. A fuel charge cannot keep up with the dynamics of kerosene prices, because the majority of tickets are sold by the airlines significantly before the flight date. Poluboyarinov estimates that the fuel surcharge does not even cover half the losses from rising hotels in hollywood fuel prices. hotels in hollywood Therefore, he says, in the coming years Aeroflot hotels in hollywood will not be able to repeat hotels in hollywood the financial success that it experienced last year. Worse still, if prices continue to rise at their current rate, the airlines net profit will be cut by at least $100 million. That is almost a third of Aeroflot s profit in prosperous 2007 ($313 million). Rossiya state transport company, S7 and other aviation companies expect a big drop in profits this year. Industry experts foresee another misfortune coming for Russian hotels in hollywood aviation. Most of the fleet of airplanes belonging to Russian airlines is soon to be obsolete. There are hundreds of Soviet-made Tu-134 and Tu-154 models that, at current fuel prices, are unprofitable hotels in hollywood to operate because of their kerosene-guzzling engines. A Tupolev burns 5600 tons of fuel per flight hour, while a Boeing of the same class uses just 3200 tons. The airlines will be unable to add modern foreign airplanes to their fleets. The sinking operating profit will force the companies to cut back on modernization programs. Companies that did not order a sufficient number of foreign planes in better times (today there is a severe shortage hotels in hollywood of aviation equipment on the world market) are going to suffer. Those small, often regional, airlines may begin to disappear from the market by the end of the year. Aviaport s Pantaleev adds that the fuel crisis will unavoidably lead to lower financial discipline in the airlines dealings with its partners as well. The majority hotels in hollywood of air carriers will be strapped for cash, and not all of them will be able to come up with it. Obviously, the fuel crisis will induce hotels in hollywood a payment crisis that will turn into a series of bankruptcies by previously quite successful airlines, he said. The disappearance of the Chelyabinsk Aviaprad can be considered a foretaste of things to come. It stopped flying February 11. One of the reasons was its huge debts for fuel. Russian air carriers are not alone in this. The high cost of fuel is shaking up of the airline business around the world. Practically all participants on the global market are preparing for serious losses and some are taking urgent cost-cutting measures, shortening routes and laying off employees. Air Canada, that country s national airline, hotels in hollywood has announced that it is laying hotels in hollywood off 2000 people and reducing hotels in hollywood its routes by 7 percent. The American carrier United Airlines recently announced similar measures. The IATA (International Air Transport Association) hotels in hollywood has already reconsidered its recent forecast of losses from rising hotels in hollywood fuel prices. The global aviation hotels in hollywood market, hotels in hollywood worth $500 billion, may lose more than $6 billion this year. Fueling Records The main question, which no one can give a good answer to, is why are the prices for petroleum products in an oil-producing country with powerful refineries comparable to the prices on the European and American markets, where they are imported. The fuel crisis raised its head again at the end of last autumn, when domestic oil companies decided that the time had come to raise domestic prices for aviation fuel to the level of those in Europe. In November and December of last year, factory prices at refineries for fuel for civil aviation rose almost 30 percent. Fuel prices seemed to stabilize during the pre-election months at the beginning of the year, and air carriers calmed down. But in April fuel prices in Russia began to react much more quickly to world market conditions and rose at record speed. At the beginning of every month, oil companies bring their prices up to European levels, and induce shock in aviation financiers. The cost of a ton of airplane fuel in Moscow today, including taxes and service charges, is more than 36,000 rubles per ton. Airports around the country have raised their prices in step with Moscow. The panic in the aviation industry has focused public attention on the fuel supply market at airports hotels in hollywood and their pricing policies. Russian Deputy Prime Minister Sergey hotels in hollywood Ivanov expressed concern about overpricing, as have officials hotels in hollywood in the Transportation Ministry and Rosaviatsia . The oil companies called their actions market and their prices competitive, and declined to comment in detail. hotels in hollywood Airline heads have begun publicly to accuse oil producers of conspiring to form a cartel, pointing to the amazing correspondence between factory prices among the largest producers hotels in hollywood of aviation fuel Gazprom Neft, LUKOIL , Rosneft , TNK-BP and others. Moreover, the purchase by oil companies of fuelling operations at large airports and their creation of fuel trading companies as wholly-owned subsidiaries has aroused concern on the market as well. The government, which can do nothing except make noise about it, is no happier. Today we are observing a strange asymmetry between the actions of government authorities and oil companies, notes Aeroflot general director Valery Okulov. The state lightens the tax burden on the oil companies, creating a favorable situation for them on the world market, and in response they raise prices for fuel for Russian consumers. Independent fuel suppliers, who buy aviation fuel wholesale from the same oil companies, unexpectedly joined the air carriers chorus of disapproval. The problem isn t that the price is high, but that there are no market foundations and nothing stops the oil companies from raising it higher still, except society s psychological tolerance, says Airport hotels in hollywood Fuel Supply trading hotels in hollywood house general director Evgeny Ostrovsky. His company occupies about 35 percent of the aviation fuel market, the total volume of which is $3-4 billion. In Ostrovsky s opinion, the oil c