BA Fuel Surcharge to increase from 8 February 2011

Discussion in 'British Airways | Executive Club' started by ag51, Feb 4, 2011.  |  Print Topic

  1. ag51
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    ag51 Silver Member

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    BA are increasing their fuel surcharge on long haul flights booked from 8 February - the increase is £12 per sector for World Traveller/Plus, and £17 per sector for Club World and First.

    From the BA Investor Relations site:

    · For World Traveller flights over nine hours an increase from £76 a sector to £88. On flights of less than nine hours an increase from £63 a sector to £75.
    · For World Traveller Plus flights over nine hours an increase from £94.50 a sector to £106.50. On flights of less than nine hours an increase from £73 per sector to £85.
    · For First and Club World flights over nine hours an increase from £108 per sector to £125. On flights of less than nine hours an increase from £88 per sector to £105.

    http://www.iagshares.com/phoenix.zhtml?c=240949&p=irol-rnsArticle&ID=1524818&highlight=
     
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  2. lhr

    lhr

    Not the best news, but certainly a sign of the times.

    I'm just pleased most of my 2011 (leisure) was already booked in the previous sale [​IMG]
     
  3. TheBilou
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    TheBilou Silver Member

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    That isnt good news at all...
     
  4. lallyr
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    lallyr Silver Member

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    Ouch!
     
  5. stimpy
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    stimpy Silver Member

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    I really hate fuel surcharges. I just paid €280 or so for CW AMS-DXB return. Plus another hundred for BS airport security charges and passenger facilitation charges in NL and UK. Yet only a tiny such charge from DXB. [​IMG]
     
  6. HNL
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    HNL Gold Member

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    Funny how fuel surcharges always go up and never come down.
     
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  7. Globaliser
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    Globaliser Silver Member

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    Or rather, it would be funny if it were true.

    But it isn't.

    What is funny is how we all react to and absorb bad news, but mentally ignore good news (like when fuel surcharges come down).

    FWIW, even after these last two rounds of fuel surcharge increases, they are still below their previous peaks (with one exception):-
    • Y mid £75.00 (peak £78.00)
    • Y long £88.00 (peak £109.00)
    • W mid £85.00 (peak £88.00)
    • W long £106.50 (peak £121.00)
    • FJ mid £105.00 (previous peak £98.00)
    • FJ long £125.00 (peak £133.00)
     
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  8. TheBilou
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    TheBilou Silver Member

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    I'm laughing so hard I can't breathe...
    Please bring me some oxygen! Or do we have to pay for oxygen too, now?
     
  9. Globaliser
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    Globaliser Silver Member

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    Between 14.10.08 and 18.12.08, BA's fuel surcharges changed (in two steps) as follows:-
    Y short £16.00 à £12.00
    J short £20.00 à £15.00
    Y mid £78.00 à £53.00
    W mid £88.00 à £63.00
    FJ mid £98.00 à £78.00
    Y long £109.00* à £66.00
    W long £121.00* à £84.50
    FJ long £133.00* à £98.00

    So which parts of the concepts of “reduction” or “gone down” are inapplicable to these changes?

    *Except:-
    Y Aus £129.50
    W Aus £141.50
    FJ Aus £153.50
     
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  10. TheBilou
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    TheBilou Silver Member

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    I never said you weren't right. Still, I'm not laughing.
     
  11. Raffles
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    Raffles Silver Member

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    There is a role for a fuel surcharge. If I remember correctly (and I could be wrong), airlines file their 'formal' (ie full fare) fares twice a year with each timetable change. Arguably there should therefore be a mechanism to allow them to protect themselves against steep fuel rises during that 6 month period, although of course in reality most airline hedge anyway.

    However, 6 months down the line, the airline can file new fares which should theoretically reflect the fuel price at that time. You should then start the new timetable with no fuel surcharges at all.

    Its not even clear what the fuel surcharge is based on now. $20 oil? $40? I suppose you could go back to when the surcharge first came in and see what the oil price was.
     
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  12. TRAVELSIG
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    Completely support the concept of filing new fares every six months.

    In addition- given that the days of $20 oil will probably never be seen again- it would seem reasonable that there is some adjustment made to the actual fare.

    It is not a very transparent way of pricing at the moment for an airline customer, and one of the very few places where I would support legislation (i.e. all in pricing required).
     
  13. TuxTraveller
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    TuxTraveller Silver Member

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    I'm not a big fan of legislation either but I agree that the current YQ scheme is far from transparent. However with the government in support of the APD I don't think it's likely we'll see any such legislation any time soon...
     
  14. Sean
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    Sean Gold Member

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    True they do come down, but they seem to have a great deal more lag on the way down then they do on the way up. This behavior makes financial sense as large airlines like BA have likely hedged a large portion of their fuel cost, so they still have to keep on paying $100/barrel of oil gas prices even if gas prices suddenly drop to the $50/barrel level.
     
  15. Globaliser
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    In addition, it would be rational for BA to set the fuel surcharge at a level which reflects its expectation of future net fuel cost. This will not necesarily be the same as the spot price for fuel at the time, let alone the spot crude price at the time.

    I do not have the data handling or statistical tools to check the correlation, but BA's surcharge rose steeply from November 2007 to June 2008, a period when its reported expectation of fuel cost increased from £2.0 bn to £3.1 bn.

    The reported expectation declined to £3.0 bn in November 2008, shortly after the first reduction in fuel surcharge (October 2008) and shortly before the second reduction (December 2008). By May 2009, the reported expectation was down to £2.6 bn and the fuel surcharge level remained constant for two years.

    I haven't been able to find recent reported expectations. I don't know if that's because they've moved, or they're no longer reported.

    None of this affects the argument that it's high time for base fares to be rebased, rather than assuming that oil prices may once more decline to $20 per barrel levels.

    But the ordinary personal consumer isn't substantively affected by the fuel surcharge system - the only confusion arises where the consumer is in a country which has not yet moved to requiring marketing to show all-inclusive prices.

    And the major customers who are substantively affected - those who have discounts off the base fare - don't show signs of being seriously unhappy with the system, as they can obviously manage their relationship with the airline.
     
  16. Prospero
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    There is data covering the six months ending 30 September 2010, in the November issue of BA's Overview magazine…

    http://media.corporate-ir.net/media_files/IROL/69/69499/OverviewNov10lowresFULL.pdf

    I know you are much better equipped to analyse these figures than I am - the data on page 9 might be of interest to you: Fuel and oil costs (net of hedging): £1,257,000,000 (1 April-30 September 2010) compared with £1,228,000,000 for the same period the year before.
     
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  17. Prospero
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  18. jason8612
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    Oh! another fuel increase. Guess have to wait for the next sale (or book AA USA for the TPs)
     
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