As the price of oil drops to US$80 per barrel, the pressure is mounting on British Airways and Virgin Atlantic to drop their fuel surcharges. Thai Airways and Cathay Pacific are among carriers this week to announce cuts in fuel surcharges in reaction to the sharp fall in oil prices, joining the ranks of Air France, KLM and Singapore Airlines.Virgin claims that despite the drop in oil prices, the market is too volatile for it to drop surcharges yet: “We keep the matter under daily review, but until prices remain low for a sustained period, the surcharge will remain.” BA says it has no plans to drop surcharges, saying that to do would “be a logistical nightmare”.
Ryanair chairman Michael O’Leary this week launched an attack on BA’s failure to drop fuel charges in the wake of the recent slump in oil prices.
“BA is using these high and unjustified fuel surcharges as a scam rip off to its passengers,” he said. “Even Air France has had the grace to reduce surcharges.”
He said BA’s latest surcharges were introduced when oil was priced at US$146, adding: “Bear in mind BA never paid US$146 because they were hedged at around US$90.”
He claimed the surcharges were harming BA’s traffic - down 6pc to 2.7m passengers last month - whereas Ryanair’s rose 20pc to 5.23m, with his airline now carrying almost double BA’s passenger number.