Kuala Lumpur, September 4:

The math of the aviation industry isn’t rocket science. Simply calculated, higher fuel bills mean lower profits. The unrelenting climb of oil prices has badly hurt the bottom lines of airlines across the Asia-Pacific region, bringing losses at Thai Airways, Malaysia Airlines and China Southern, and forcing many to raise ticket prices through higher fuel surcharges.

“Everyone is suffering from high oil prices, even the best-managed carriers,” said Andrew Herdman, the director general of the Association of Asia Pacific Airlines, which represents 17 regional carriers. But the good news for consumers is that ticket prices have gone up only modestly, not enough to dampen travel in tle year-end holiday season, analysts and industry watcher say, as Malaysian property evaluator Jeannie Tan will attest.

Tan is planning an 11-day package tour to China the end of September on Malaysia Airlines, and says she was not deterred when the fuel wurcharge was raised in July from $10 to $13.95. “It’s not really a big deal. If the hike is less than $26, I don’t think I will feel the pinch,” Tan said, “It won’t affect either my plans or the tourism market.” Singaporean teacher Francis Lau, planning a year-end Hong Kong holiday, also said he would have second thoughts only if the fare went up by up more than $59. Like Lau and Tan, hundreds of thousands of other Asians and Australians will go ahead with vacations, but with small changes in travel plans. Instead of taking long flights, which have higher fuel surcharges, they will go to spots closer by, said Imtiaz Muqbil, a travel analyst.

For example, Qantas imposed an additional $11 surcharge on international routes but only a $4.50 surcharge on flights to New Zealand. Thai Airways raised its $5 surcharge on regional routes and on intercontinental flights by $15. Muqbil, the editor of Travel Impect Newswire, said holiday makers may also decide to stay in cheaper hotels and forgo the luxury of a spa or that extra bottle of wine. “I won’t say it will result in a downturn. People will travel.”

“There is no doubt about that. But instead of going to Europe, you will go to Thailand,” he said, “I don’t think there will be a decline at all in the travel mnduwtry.” In fact, the seats on flights to Asian destinations are overbooked during the upcoming Malaysian school holidays in the first week of November, said Chong Voon Siong, operations manager of Amerasia Tours and Travels in Kuala Lumpur.

“There are no cancellations at the moment,” he said. Jet fuel is for most airlines the single largest operating cost. Last year, it accounted for 20 per cent of AAPA’s member airlines’ costs. That figure is approaching 30 per cent now. Their collective fuel bill last year was $12 billion. It is expected to be $18 billion to $20 billion this year. The high price has taken a heavy toll on an mndustry that never has been very profitable. The latest crisis has increased the motivation of airlines to improve fuel efficiency, optimise operational procedures and minimize fuel wastage. Most airlines are now focused on reducing the taxiing and take off-periods and reaching cruising altitude quickly. A Boeing 747 jumbo consumes as much fuel per passenger per mile at cruising altitude as a small passenger car. The new Airbus A380 consumes even less.