Crude oil reached a price of $138.75 per barrel today. We are all wondering when and how higher oil prices will impact to cost of travel to Asia, Africa and Latin America. So far the cost of plane tickets has not reflected the higher oil prices airlines face. A plane fare , relative to the underlying cost of the energy to operate the plane has never in history provided a better value. Ticket prices may not go up as much as fuel prices. Many national carriers subsidize the costs of their planes. In the case of larger Middle Eastern carriers like Emirates Air, higher oil prices effectively mean more money in national coffers with which to subsidize the airline as a symbol or cultural and national prestige. This makes it harder for competing airlines to raise rates. Some airlines are still buying fuel at locked in, hedged prices far below market prices.
Some travelers can expect to see fewer choices of flights, less convenient connections, fuller planes and the need to reserve seats farther in advance as the most consequential costs of higher, scarcer oil. In time we may see schedule flight cancelations and certain airports dropped as destinations if chronic shortages actually reach fuel storage facilities at remote airports. Whether we are really starting to run out of oil or merely the victims of speculative manipulation seems still under debate. With gas and diesel lines growing in places like China, Nepal, Indonesia, Mexico and other countries which have subsidized the price of fuels, it seems more likely that the real problem is not enough oil reaching consumers rather than artificially inflated prices, or absolute shortage of oil in the ground. Unfortunately, new technologies to produce aviation kerosene and other fuels from crops, shale, coal and heavy grades of oil are simply not available, affordable or environmentally acceptable. High oil prices and occasional shortages are probably the new norm. As a traveler not willing to give up dreams of seeing the world, the best advice is book and buy your ticket early, leave a day or two leeway in your schedule for possible delays and purchase trip insurance to cover incidental cost of interruptions. Airlines will continue to fly safely with tourists aboard to every country in the world. As travelers we are probably better off taking our dream vacation sooner rather than later and with an expectation that the changing economics of fuel are one more factor to figure in our planning.