Burning Issues

National carrier SriLankan Airlines is hoping international jet fuel prices will cool off this month as it launches thrice weekly services to Beijing China from June 15. National carrier SriLankan Airlines is hoping international jet fuel prices will cool off this month as it launches thrice weekly services to Beijing China from June 15. Fuel accounts for around 30 percent of SriLankan’s costs – every US$ 0.01 increase costs the airline US$ 1 million.

“We were earlier looking at adding a dedicated freighter to Shanghai to compliment the passenger services to Beijing, but plans are now on hold until fuel prices cool down a bit,” SriLankan CEO Peter Hill told LBO on Wednesday.

SriLankan had budgeted a gallon of fuel at US$ 1.53 for 2005. But market prices shot up to US$ 1.74 in April (on average) and US$ 1.86 during the first week of May.

Since second week of May, prices have climbed down to between US$ 1.60-1.65 per barrel.

The airline is now toying with the idea of linking passenger fares to fuel prices, after periodically raising the fuel surcharge on airline tickets.

“It’s modeled on similar lines in the freighter industry where prices change e