By Joanne Bladd
Arab world’s biggest carrier blames new charge on oil price spikes, effective April 18
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.”
There are already fuel surcharges in the ticket price that were not deleted after the last fuel shock. They were reduced and not eliminated. Will these be deleted from the ticket price in light of the latest attempt to increase prices by putting on a separate fuel charge? Will fuel be a transparent pricing item on a ticket or will it be hidden in the myriad of existing charges and used to enhance airline profitability?
This is not justified. The increase in fuel prices is temporary due to what is going on. Look at the crazy salaries your management is paid on monthly basis and see how much that will save you annually if it was reasonable!
I love your services and your fleet of modern crafts and the huge number of destinations you reach. But you are not my #1 choice any more because you were already the most expensive Arab carrier and now you just made it worse. Look at the difference between you and Qatar Airways cost. Don't forget that you are still supported by the government for fuel price. So where is your REAL justification for this increase?
Well, it is now two months since the introduction of fuel surcharges by Emirates. The only casualties in this are Skywards members who must pay additional charge for reward flights...and of course, the fuel surcharge announced in March has been increased by 175%. The initial statement by Emirates appears to be an untruth. The real issue has been to equalise the Skywards rewards with the flight rewards of the Qantas FF programme. Cynical and unjustified. What was it Tim Clark said in 2012...no alliances?