The price of fuel went up across Nunavut on Thursday, and customers at the gas pumps are not the only ones feeling it. Airlines that service the territory are also raising their prices for passenger, freight and charter flights.

The airlines, including Kenn Borek Air Ltd., First Air and Canadian North, scrambled to decide what to do when the Nunavut government announced on Oct. 22 that it would boost the price of fuel to help soften the territory's projected deficit.

Effective Thursday, the government raised the retail price of gasoline by 10 cents a litre. In Iqaluit, the price at the city's three gas stations went up Thursday from $1.199 a litre to $1.299.

Aviation fuel went up by 20 cents a litre. That means aviation fuel now costs nearly $1.70 a litre in some communities.

As a result, the airlines have decided a price hike is needed, as opposed to absorbing the extra costs.

"Unfortunately, it means that we have to increase our fares," Pita Aatami, president of Makivik Corp., which owns First Air, said Wednesday.

"At the same time, we won't be increasing fares by 20 per cent. We have no choice but to increase our fares by roughly six per cent."

First Air's price increases take effect immediately, Aatami said. The other two airlines, Kenn Borek Air and Canadian North, have yet to decide exactly by how much their fares will go up.

"Fuel represents almost 25 per cent of our total costs, so any kind of change to that is going to have a significant impact on our operation," said Canadian North's vice-president of marketing, Kelly Kaylo.

Stephen Penikett, general manager of Kenn Borek Air, said exact figures for his airline's price increases are difficult to nail down, since they depend on the type and size of aircraft, the cargo weight and the number of passengers.

But based on a 20 per cent price increase in aviation fuel, "you're going to see a 20 per cent increase across the board on the freight," he said.

"So if it's 3,000 pounds we're carrying, it's going to be a 20 per cent increase in that. If it's 20 passengers, you're going to be 20 per cent divided by 20."

Penikett said not only will passenger ticket prices and freight rates go up, but he anticipates charter customers will also have to pay more for charter flights.