18 Monday February 21 2022 | the times
News
Air fares could increase by as much as
25 per cent by the summer because of
the rising cost of jet fuel.
International fares will jump by an
average of 5 per cent each month until
June, with the biggest increases this
month and next, according to Hopper,
the travel booking app company.
The average barrel of jet fuel, the
single biggest expense for airlines, is
now $111, an increase of 68 per cent in
the past 12 months.
Chris Smith, an independent avia-
tion consultant, said: “The fuel price
will wash directly through. If it goes up,
then airlines will pass that on to the
consumer.”
However, he believes that the
additional costs are unlikely to deter
passengers who have been unable to
travel for two years. Travel agents, tour
operators and airlines have reported
huge “pent-up demand” that has driven
bookings.
Mintel research has suggested that
85 per cent of households with income
of more than £50,000 plan a holiday
this year. It noted that the travel sector
“holds one big advantage — holidays
represent escapism, something never
more applicable”. It also found that, as
yet, the crisis in the cost of living was
not having an impact on people’s travel
plans.
Smith told The Mail on Sunday:
Air travellers face
huge rise in fares
“People who would normally go on
holiday three or four times a year
haven’t been able to go. They will want
to resume normal operations as soon as
they can.”
Larger carriers, such as British
Airways and Ryanair, normally will
agree a fixed price for much of their fuel
in advance to reduce exposure to
sudden jumps in oil prices. “However,
the recent spikes have been so large and
sustained that they are likely to be left
with little choice but to pass these costs
on to passengers,” Smith said.
Willie Walsh, director-general of the
International Air Transport Associa-
tion, said it was “unlikely that most
airlines will have significant hedging in
place to protect them against this
increase in the oil prices”.
Tui, the world’s biggest tour operator,
has said that both inflation and fuel
prices pose a threat to travel, but that it
has hedged its costs for this summer.
Michael O’Leary, Ryanair’s chief
executive, has warned that air fares for
the summer will be significantly higher
than pre-Covid prices for the same
period in 2019.
A jump in prices of 25 per cent would
mean that a return trip from London to
Orlando, Florida — the gateway to
Disney theme parks — would rise from
£918 to £1,148 in early August.
Fahmi Mahjoub, the UK boss of Air
France-KLM, warned last week that
higher air fares had become “quite
unavoidable”.Ben Clatworthy
Transport Correspondent
NatWest set to cut ties with coal companies
Nadeem BadshahNatWest has pledged to stop doing
business with some coal companies and
to end lending to certain oil and gas
groups as part of its commitment to
tackling climate change.
James Close, the bank’s head of
climate change, said that it could not
name the firms involved but added that
they did not have “credible” decarboni-
sation plans. He said that the changes
would be enforced “as soon as is practi-
cable” and that the number of compa-
nies affected was “relatively
small... dozens and less”.
Close told the Financial Times that
one of the companies viewed coal “as a
growth business... It was pretty obvi-ous that there was no landing space
between us.”
In 2020, NatWest said that it would
stop lending and underwriting for com-
panies with “more than 15 per cent of
activities related to coal” and to large oil
and gas producers unless they had
credible transition plans by the end of- In a climate disclosure report pub-
lished last week, NatWest said that it
had £1.43 billion of exposure to compa-
nies in these categories as of December.
The bank also vowed that it would
wind down lending and underwriting
to customers accounting for £967 mil-
lion of that exposure because their
plans were insufficient. It said that it
would “stop lending and underwriting
to these customers, including stopping
renewal, extension or refinancing of
any existing commitments” and would
“fully exit” relationships with the coal
companies, which accounted for
£437 million of exposure, “as soon as is
practicable”. Close added that the com-
panies that passed the test were “by and
large... [those] that aren’t doing any
more upstream oil and gas production”.
This month it emerged that six North
Sea oil and gasfields were expected to
be approved in 2022 despite the com-
mitment to reaching net zero by 2050.
Drilling of oil and gas could begin in
the Rosebank field, to the west of the
Shetland islands, and at the Jackdaw,
Marigold, Brodick and Catcher sites in
the central North Sea. Tolmount East is
also expected to be given approval.PAUL QUEZADA-NEIMAN/ALAMYFantasy philately Stamps including an extremely rare, unused Mauritius 1859 Sherwin issue, an India 1911 artist’s essay and
an 1878 with the Maltese cross watermark are to be auctioned at the Stampex International show in London this autumn