Transportation companies across America are feeling the effect of skyrocketing fuel prices. It isn’t just the ground transportation companies like limousine services, black car services and charter bus companies. The airlines are feeling the increases too and the major airline carriers say that big price hikes are right around the corner.
That’s not good news for us and it’s certainly not good for corporate travel budgets coming on the heels of the pandemic. During the height of the pandemic in 2020, airlines and ground transportation providers were operating at about 10% of the levels they saw in 2019. It’s hard for any company, regardless of size to endure revenue decreases of this magnitude.
To put the crisis into perspective, charter buses carry about 200 gallons of fuel when topped off. In October 2021, we were paying $4.48 per gallon and a complete fill-up from empty cost about $900. As of March 9, 2022, the same fill-up is costing us about $1200! We can’t absorb the $300 increase in fuel costs without passing it on to the consumer. No one likes it when prices go up. Inevitably, we will need to increase our rates. Whether that means an increase across the board or adjusting fuel surcharges is yet to be seen. Obviously passing the increase along through fuel surcharges appears fair and equitable since those passengers traveling long distance will see higher charges for fuel than passengers traveling from the airport to a hotel located close to the airport.
The fact is our industry has seen a whopping 14% increase in fuel costs in just the past few weeks. This couldn’t come at a worse time, as we head into the spring wedding season, conventions, proms and eventually the summer travel months. These are the months that we consume the most fuel within our industry. To add insult to injury, the cost of diesel used to be less than gasoline. Today, diesel prices are running the highest. Our gasoline powered vehicles such as SUVs and luxury sedans were costing us about $50 to fill up and that number has jumped up to about $85. Not good!
We certainly hope that our customers understand that any pricing increases passed along will be done as a matter of necessity rather than simply raising prices. The pain you feel when pumping fuel in your own vehicle is felt by us exponentially since we fuel vehicles every single day of the week. And, of course, being a California based company – well, do we need to say more? Buckle up folks. It’s going to be a rough ride for a while.