LONDON, Nov. 3 (UPI) -- Airlines face passing rising fuel costs onto passengers with increased fares, analysts say.
The recent surge in oil prices to record levels, closing Friday at $95.93, caused analysts to warn consumers that airlines may be forced to raise rates, the Times in London reported Saturday.
Airlines hedge against rising oil prices, but the escalating fuel crisis limit the protection of some carriers for next year.
British Airways, for example, hedged on 45 percent of its 2008 fuel at $76 a barrel, but may be forced to pay record rates for the latter half of next year, the Times said.
Gary Chapman of the Dubai based carrier Emirates said, "We are not as heavily hedged next year and it was a tough call not to increase the percentage covered. It does leave us exposed to the risk of high prices next year."
Escalating oil prices caused American and Delta Airlines to impose an additional $20 surcharge on airfares.
Some major carriers posted record profits recently. However, an economic recession in 2008 may affect the future revenue as the financial slowdown decreases discretionary spending.
