Incredible rising airfares: the role of fuel

Airlines are hiking fees for all sorts of things these days, largely to deal with a single issue: the stupendous increases in fuel costsOur back-of-the-envelope calculations suggest that a flight from Honolulu to Maui or Kaua'i could burn as little as four gallons per seat. If the plane isn't full, it's more gallons per sold seat. If you're paying $49 for that flight, more than half the money is going to pay for the jet fuel.

Fuel exceeded labor as the largest airline cost in 2006, and that the year when fuel was crossing the $2 milestone.Clearly, it's a big problem for airlines when fuel goes from $2 to $4 and appears ready to go to $5 a gallon, and there are equivalent hikes in lubrication and of the many materials and services that also have inherent fuel costs.Jet fuel, much like kerosene and a heavier distillate of crude oil than gasoline, has gone up in some cases faster than the price of crude.

The International Air Transport Association reports that jet fuel has risen in cost 90 percent in the past year (effective May 16, 2008) and was costing airlines $3.90 a gallon.IATA reports that “modern aircraft achieve fuel efficiencies of 3.5 litres per 100 passenger km.”In U.S. terms, that works out to about 1.5 gallons per 100 passenger miles. But that's for the most modern planes. Some get far worse mileage than that.

Airline companies are designing planes to be dramatically more fuel efficient in response both to the cost of fuel and to the amount of carbon dioxide aircraft add to the global load. IATA says a couple of new aircraft are pushing for 1.3 gallons per 100 passenger miles. A Boeing executive was quoted saying the firm hopes the new Dreamliner 787 will get 1 gallon per 100 passenger miles, although most printed estimates put it closer to 1.3 gallons.