Friday, 28 March 2008

Air fares set to rise again

Air fares set to rise again
By Zoe Sinclair (Our staff reporter)KHALEEJ TIMES 28 March 2008

DUBAI — Passengers’ pockets are likely to be hit again with airlines serving the UAE yesterday indicating fare increases due to escalating fuel prices.

The price of oil is circling around $110 per barrel while the UK airports — Heathrow and Gatwick — have raised taxes. The airlines are being forced to consider passing the cost on to their passengers.

Emirates Airline president Tim Clark announced on March 5 it would be increasing fares amid plans to cut costs by $100 million.

A statement this week revealed fares were increased by 5.5 per cent as of February 15.

“Emirates increased fares by 5.5 per cent across all three classes — First, Business and Economy — with effect from February 15,” a spokesperson said.

“Our fares incorporate our operating costs which include fuel, salaries, taxes, fees for use of facilities and other costs of operation. As with every airline, pricing is also subject to market forces and we will continue to evaluate our fare structure based on these.

“The staggering increase in fuel prices has had an inflationary effect on all our operational costs. However, Emirates will continue to work very hard to shield our customers from any price fluctuations,” the spokesperson said.

A British Airways spokesperson has indicated it would cover the passengers’ airport taxes for those who had already purchased tickets.

However, the airline would in future pass on some of the additional cost of airport taxes to its passengers.

The airline currently charges a fuel surcharge on its tickets and said it was continually reviewing the situation as to whether any increases had to be made. An Air Arabia spokesperson said the airline had included a fuel surcharge in its ticket fare but had not increased this charge for the past year.

“We usually do our best not to increase ticket prices as per the cost of fuel,” the spokesperson said.

“This (a fuel surcharge increase) is an option to consider if the fuel prices keep rising.”

Etihad Airways spokesperson Thomas Clarke said the airline was continually reviewing fuel prices but used tactics, including hedging, to avoid peak prices.

“Rising fuel costs are a challenge for all airlines and remain a significant proportion of Etihad’s total costs,” Clarke said.

“Our hedging policy helps us to achieve greater certainty and allows us to manage seasonal fluctuations.

“Fuel costs represent about one-third of Etihad’s total costs.”

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