by CAROL MARTINDALE

RISING FUEL bills have airlines fighting to keep airfares from going up.

With oil now at US$113 a barrel, compared to US$72 a barrel last July, both regional and international carriers say the increases are causing more turbulence in the industry.

Regional airline LIAT, for example, has seen a 75 per cent hike in its fuel expenses in the last year.

Chief executive officer Mark Darby said they were paying US$1.25 million for fuel every month for the last year, but this year the cost jumped to US$2.2 million for its fleet of about 17 planes.

"We are under pressure to keep our fares low. So far, we have absorbed the increased costs in fuel but if the costs continue to rise, we will have
to increase the fuel surcharge.

"We are hoping, though, that they will come down," he told the SUNDAY SUN.

"We have to face it. It is outside our control," Darby added.

The airline's fuel surcharge is now US$20 one-way.

The CEO said LIAT's aircraft were fuel-efficient, noting for example, that a flight from Antigua to Barbados consumed 500 to 600 gallons of fuel.

Major international airline American Airlines (AA) also reported it was trying to hold strain under the weight of a heavy fuel bill.

AA's financial statement on its website shows that its bill went up by US$200 million last year to US$6.6 billion, compared to 2006.

Country manager for Barbados Wellesley Joseph said: "For every one cent increase in the gallon of fuel, AA's cost increases by US$30 million a year.

"There is concern across the industry as it relates to the increases in fuel. . . . A lot of people don't understand how much it takes to run an airline," he said.

With fuel hikes affecting airline expenses and operations, there is the option of "hedging" which allows them to buy fuel months in advance and be locked into a price.

In another report on its website, AA shows 35 per cent of its anticipated fuel consumption for the first quarter of 2008 capped at an average equivalent of US$77 per barrel, with 24 per cent of its anticipated full-year consumption capped at an average equivalent of US$79 per barrel.

Consolidated consumption for the first quarter is expected to be 771 million gallons of jet fuel.

LIAT's CEO said that while the company was planning to look at fuel hedging in the future, it was not a cheap option.

"You need money and you need a solid track record to make it worthwhile," he explained, noting that airlines lose if the price of fuel drops.

President of the local Airline Association John White said he believed the impact of the fuel costs would be minimal, even though he noted there could be increases in travel if airlines jacked up their fuel surcharge.

* carolmartindale@nationnews.com