Rising gas prices bad news for travelers and US President

Rising fuel costs in the immediate future will have an adverse impact on both drive and fly destinations for business and leisure travelers, predict various sources.

“[R]ising jet fuel costs put significant cost pressure on the airline industry,” Steve Lott, vice present of communications for Airlines for America, told CBSDC. “Regarding fuel, it was the airline industry’s largest expense in 2011, representing 35% of total costs.”

This comes at a particularly vulnerable time for travelers  —  when spring breakers and summer vacation planners are looking ahead to make their plans.

Cynthia Brough, director of public relations for AAA, said that as jet fuel costs go up in tandem with gas prices, consumers can expect to pay more for their flight.

Gas prices are rapidly rising —  fueled in large part by Iran’s controversial nuclear ambitions  —  and already approach $4 a gallon in some parts of the US.

The Federal Reserve Board in February reported that tourism activity remained strong, and attendance for major conventions is on the rise. “However, there were concerns about higher fuel costs and the adverse impact it may have on drive-to traffic at regional tourist destinations,” the Board said.

Some experts are predicting $4 or even $5 a gallon by this summer.

In the US, the national average jumped by nearly 12 cents per gallon in a week, with state averages above $4 per gallon in California, Alaska and Hawaii.

Economists are voicing concern that a continuing run-up in oil prices could threaten the fragile economic recovery in the US and deepen a recession in Europe, says CBC News

The rise will weigh on the economy, pushing leisure and business travel costs higher. Every a one-cent increase in the price of gasoline costs the US economy $1.4 billon, analysts say.

The situation has also gotten the attention of price-conscious airline carriers.

Alison Steinberg, senior media analyst for JetBlue Airways, told CBSDC that there are steps being taken to offset off the potential effects of rising gas prices.

“We continue to believe the best tools for managing the impact of fuel expense are operating a fuel-efficient fleet and using efficient operating procedures, such as single engine taxi,” she said. She added:

“In addition, we continue to manage our fuel hedge portfolio as a form of insurance to help mitigate price volatility and protect JetBlue against severe spikes in oil prices.”

Airlines are already levying fuel surcharges averaging nearly $450 round trip on international flights across the Atlantic, said FareCompare.com CEO Rick Seaney. On domestic flights, travelers may see fare increases of 2 to 4 percent this year, he said.

For those in the White House, this development could be an even more immediate threat.
It’s generally believed that the US President can do very little about gas prices.

However, “There appears little question that one of the most significant challenges to an Obama re-election is the threat of Americans having to drive to the polls this November in automobiles powered by $6 a gallon gasoline,” writes Forbes.

By David Wilkening