Fuel surcharges which were last seen in the period 2005-2015 are about to return says Qatar Airways CEO Akbar Al Baker.
The surcharges, which were introduced as the price of oil rose from $30 per barrel up to a peak of up to $147, added several hundred pounds to the cost of long haul tickets. Now, according to the Chief Executive Officer of the Qatar Airways Group, Akbar Al Baker, they will soon make an unwelcome reappearance when booking flights.
Interviewed by Business Traveller this week in Doha, Al Baker said that the rising price of oil (it currently stands at $85 per barrel) means that fuel surcharges are “imminent”.
His opinion is influential in the aviation industry. Not only is he Chief Executive of Qatar Airways, but Qatar Airways is also a major shareholder (21 percent) of IAG which owns British Airways, Iberia, Vuelling, Aer Lingus and low cost airline Level.
In addition, Al Baker is the incoming Chairman of the Board of Governors of global aviation industry body International Air Transport Association (IATA), effective from next month.
Al Baker said that “As the oil price rises, we will start imposing a fuel surcharge like we used to do when it was high before.”
He defended the practice, pointing out that “When the oil price went through the roof our ticket prices only went nominally up with the surcharge for the fuel. The fuel prices went from 50 to 120 dollars but the ticket prices didn’t go up by two and a half times.”
It should be noted that while passengers refer to fuel surcharges, airline seldom do. This is because of legislation in the United States which would require airlines to prove a direct link between the surcharge and the extra cost they are incurring due to the higher cost of oil. Since the price of oil fluctuates, this is difficult for the airlines to achieve, and so they term the surcharge as carrier-imposed.
Norwegian is the first to impose the charge, earlier this week (May 22, 2018). Its ‘carrier-imposed surcharges’ applies to US, Argentina and Singapore flights and comes to £25 each way or £50 for a return flight. A spokesperson said:
“Norwegian has re-introduced a ‘carrier-imposed surcharge’; a charge that most other airlines have had for a long time. The surcharge will cover increased costs like higher fuel prices and other additional costs. The surcharge currently applies to our long-haul, Middle East, and Africa routes and is much lower than the surcharge introduced by our competitors.”
Business Traveller has contacted British Airways for a comment. The carrier presently has £203 as part of its ‘carrier imposed charge’ for a return flight from London Heathrow to New York JFK (see screen grab above)
The certainty is that for travellers, prices are about to go up.