The travel industry held its breath as oil prices skyrocketed last week driven by the unrest throughout parts of North Africa and the Middle East.
After a year of steady growth, travel providers felt the strain as protests in oil-rich countries like Libya, Tunisia and Bahrain brought fuel prices up and sent shares of travel providers plummeting.
For the first time in two years, crude oil peaked at $100 a barrel, causing turmoil for the airline and cruise ship industry.
To counter the rising costs, the airlines pushed up fares again last week for the fourth time this year.
Airlines also have imposed fees like summer peak travel surcharges and fuel charges to select international routes.
But Wall Street analysts wonder if these moves will be enough to keep the recovering airline industry growing when faced with $100 per barrel oil prices. If oil prices stay up, analysts say that travelers might cut out all nonessential travel.
A slow down in leisure travel not only will hit the airline industry, but also will hurt the cruise lines which depend entirely on nonessential travel, need airlines to bring passengers to ships and require oil to operate.
The cruise lines have given no indication that they would impose surcharges and fees. However, analysts say that such fees are possible if fuel prices continue to remain high.
By Adriana Padilla at PeterGreenberg.com.
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