A rise in airfares is likely as oil prices appear poised to hit a record high after passing $83 a barrel this week.
Airlines are certain to pass on some of the increase to passengers, either as a surcharge or incorporated into fares, and tour operators will be watching anxiously as they price programmes for next year.
Oil has remained above $70 a barrel since mid-summer, almost three times the level of 2003. But the price of aviation fuel refined from crude oil, known as kerosene, has risen by more because of a shortage of refining capacity.
Airlines typically buy between 20% and 50% of their fuel up to a year in advance in an effort to stabilise costs – a practice known as hedging.
But high oil prices make hedging expensive and risky – carriers fear to buy ahead when the price may fall – leading to a reduction in the practice, and that leaves airfares more responsive to the market price of oil.