Air fares drop

By | Category: Travel news
when will fuel surcharges end?

when will fuel surcharges end?

According to IATA, airfares declined by 5% in the first eight months of the year? Why? Declining oil prices. At last, good news for airline passengers.

It has taken a long time coming but why so long? Part of the answer is that airlines hedge their fuel prices to guarantee the prices they pay for aviation fuel. They were locked into those prices for the length of the contract – usually a year. Those contracts have been expiring and now they can but on the spot market at prices some 30% and above the price they were paying a year or so ago. Passenger outrage.

With road fuel prices dropping from about £1.40 a litre to the 99p a litre (which the supermarket chain, Morrison’s announced yesterday) means car drivers have seen a drop by at least a third. Air fares won’t drop by anything like that, I would have thought even with pressure from low-cost airlines.

It should mean that seat prices will drop further but will it happen? Too many of us want to fly so demand is up. Flights are flying pretty much full to capacity on some routes so I cannot see big reductions ahead for passengers unless more flights are added. The 5% reduction may be as much as we will get despite passenger outrage.

But what passenger should expect is that all aviation fuel surcharges that are added to our bills should be dropped. When they were first added, airlines might have had justification. There is none now.

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