Emirates Airline to add fuel surcharge to all air fares

Arab world’s biggest carrier blames new charge on oil price spikes, effective April 18
Emirates Airline to add fuel surcharge to all air fares
Emirates, the Arab world’s biggest airline, has introduced a fuel surcharge to airfares after Middle East unrest pushed the global oil price to more than $110 a barrel
By Joanne Bladd
Mon 18 Apr 2011 02:47 PM

Emirates, the Arab world’s biggest airline, has introduced a fuel surcharge to airfares after Middle East unrest pushed the global oil price to more than $110 a barrel.

Dubai’s flag carrier said passengers travelling to the US on economy tickets will be charged AED150 each way from April 18, rising to AED520 for those in business or first class.

The surcharge for a return trip in the Middle East or to the airline’s South Asian destinations will be AED40 each way for economy travellers, rising to AED130 for those in business or first class.

For those heading to Europe, Africa, the Far East, Australia or New Zealand, the levy each way will be AED80 for economy passengers and AED320 for business and first class.  

The charges were outlined in a circular sent to travel and booking agents seen by Arabian Business. They will apply to all fares.

The cost of fuel is a significant burden for airlines. The last fuel spike in 2008, which saw oil prices soar to more than $150 a barrel, threaten to tip dozens of carriers into bankruptcy.

In a statement, Emirates said it had absorbed “substantial costs” caused by oil fluctuations.

“The surcharge gives us the ability to respond faster to market conditions, rather than a lengthier process of incorporating them into fares. The changes will also give us the ability to decrease prices quickly, where appropriate,” a spokesperson said.

“Emirates has already incurred substantial costs by absorbing the recent price rises.”

The International Air Transport Association warned in March that Middle East carriers would be “very challenged” by the impact rising oil prices on profits.

“Our current forecast is based on an average annual oil price of $84 per barrel [Brent],” said Giovanni Bisignani, IATA’s Director General and CEO. “Today the price is over $100. For each dollar it increases, the industry is challenged to recover $1.6bn in additional costs.

"With $598bn in revenues, $9.1bn in profits and a profit margin of just 1.5 percent, even with good news on traffic 2011 is starting out as a very challenging year for airlines.”

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