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Thu 1 Feb 2007 12:00 AM

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Fuel surcharge policy disparities

The airline industry’s fuel surcharge policies are proving inconsistent, with some carriers dropping or reducing the charge and others intent on cashing in on the fuel price drop.

The airline industry’s fuel surcharge policies are proving inconsistent, with some carriers dropping or reducing the charge and others intent on cashing in on the fuel price drop.

Big international carriers such as British Airways have reduced the fuel surcharges on long haul routes of less than nine hours, from £35 (US $68) to £30 ($59) per sector or £60 ($118) for a return trip. The UK airline’s short haul surcharge will remain unchanged at £8 ($16) per sector.

‘The cost of oil has reduced in recent weeks and therefore we believe that it is right that our customers benefit from lower prices on shorter flights,” said BA commercial director, Robert Boyle, although he maintained that fuel costs remained a “real burden”.

BA’s UK competitor, Virgin Atlantic, said it had reduced its fuel surcharge but noted any savings to customers would be offset by the UK government’s policy to double Air Passenger Duty (APD), which was enforced on February 1.

Lufthansa said it reduced the surcharge on intercontinental flights in October, since then, crude oil prices finished the year at $61 a barrel, from an all time high of $78 (July). At time of press, the price was set at $52 a barrel.

Air France said its surcharge would be withdrawn if the barrel price remained below $60 for 30 consecutive days, while Singapore Airlines claimed its surcharge policy was “under review”, but currently stood at $54 on long haul flights.

Emirates said it had “no immediate plans” to drop fuel surcharges, which  only covered about half of the incremental fuel costs absorbed by the airline.

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