Lower jet fuel costs to bolster the bottom line of airlines

Singapore

THE recent slump in jet fuel prices is expected to help airlines cope with costs - a major expenditure for carriers - and boost their bottom lines, although their practice of hedging portions of their fuel needs may blunt some of the positive impact of lower expenses.

Consumers hoping for lower airfares will, however, have to wait a while for an adjustment to the fuel surcharges; UOB Kay Hian analysts estimate that the time lag of between a month and 1-1/2 months is typical before airlines get around to tweaking the fuel surcharges, which cover about 30 per cent of fuel costs.