Airfares set to rise as oil prices surge

STORY: A travel recovery was just starting, but now it looks like airfares could be about to rise in a big way.

That as oil prices surge as a result of the Ukraine crisis.

Tuesday (March 8) saw international benchmark Brent crude surge past $127 per barrel on concern over Russian supplies.

Qantas is one airline to warn it could all mean higher prices ahead.

The Australian carrier says it’s inevitable as things stand.

However, big airlines use financial markets to fix their fuel prices months ahead.

Qantas boss Alan Joyce says his firm has hedged fuel prices out to September, giving it some time to make a decision.

But oil prices aren’t the only problem.

Airlines are also having to take roundabout routes to avoid Russian and Ukrainian airspace.

That adds to flight times, fuel consumption and crew costs.

It also means planes can carry less cargo, reducing revenues.

Right now the biggest impact is on flights between Europe and destinations in north Asia like Japan and South Korea.

Finnish carrier Finnair say its flights from Helsinki to Tokyo will now take 13 hours, up from 9.5 hours previously.