Budget airlines snub fuel surcharge plans

May 31 2008 by Alex Turner, Liverpool Daily Post

LIVERPOOL John Lennon Airport’s two biggest airlines, Ryanair and Easyjet, have pledged not to follow BA’s lead and introduce fuel surcharges despite the continuing high price of oil.

Their pledge comes at the end of what has been a bad week for the aviation industry, which was capped yesterday when a cash crisis caused by soaring fuel costs and a lack of investment forced business-class carrier Silverjet call in the administrator.

The price of jet fuel has risen from $840 per tonne in February to $1,350 yesterday, but the two airlines have restated their ambition not to pass on the costs to passengers by way of surcharges.

Easyjet has 19 routes from Liverpool and the airline remains confident it can cope with the rising oil price.

A spokeswoman said: “We have a very low cost base so we are able to adapt to the market. We can ride this out. We won’t be introducing fuel surcharges because we don’t believe they work.

“We are looking at a fuel efficiency programme and research into reducing fuel use.”

And Ryanair, which flies to 40 destinations from Liverpool, was also bullish.

“Ryanair guarantees passengers that it will never introduce a fuel surcharge, even if oil hits $200 a barrel,” said a spokeswoman.”

British Airways will increase its fuel levy for the eleventh time in four years on Tuesday. The surcharge on short-haul flights will go up from £10 to £13 each-way while long-haul flights of more than nine hours’ duration will increase by £30, to £109 per flight.

Virgin Atlantic has already increased its charges this week, from between £2.50 and £16.50.

The price rises are not limited to the UK market, with Japan Airlines and Air New Zealand also increasing surcharges while Lufthansa and KLM have raised ticket prices in recent weeks.

However, City investors reacted well to the news from British Airways, with its share price closing up 8%, at 232.5p.

Last night, business-class only airline Silverjet called in administrators as thousands of air passengers had their travel plans wrecked when the airline stopped flights.

Around 7,000 UK and 2,500 non-UK customers were affected as funding problems led to the suspension of services.

alex.turner