It’s not just gas at the pump rising in price, cruise lines too are paying more for fuel and some are passing along the cost to passengers.
Cunard Line, already charging a fuel surcharge since last May, today announced an increase from $3.85 to $6.00 per person per day on new bookings made on or after December 31, 2010. The supplement is capped at $200 per person on longer voyages and includes all guests traveling.
Cruise lines have resisted adding back on the unpopular fuel surcharge even though fuel prices have exceeded the threshold they commonly notify guests it would take to resume the fee. Fuel surcharges started in 2007 when oil went above $100 per barrel but were removed in late 2008 after pricing went down below $70.
The current price of a barrel of crude oil is about $90.
Other signs point to seeing more of cruise line fuel surcharges too. Earlier this month, British Airways raised their fuel surcharge for the first time since 2008 on long-haul flights by 10 pounds (about $16) each way.
Still, the cruise industry does not want to add the fee back. When speaking of fuel surcharges earlier this month, Carnival Corp Vice Chairman and COO Howard Frank told USA Today, “I don’t see that in the cards … not based on where we see fuel for this year.”
Photo courtesy Cunard Line
During that whole oil debacle this past summer, airlines were levying fees left and right to recoup some of the massive losses they were incurring to pay for jet fuel. Charges included paying for checked bags, preferred seats and worst of all, heavy fuel surcharges.
The addition of fuel charges when oil was expensive made disappointing sense to most, but what really irked many frequent flyers was the inclusion of award tickets in these fees. To most, an “award” ticket booked with miles should be as free as possible — after all, we earned these miles with our cold, hard cash and time, right?
Now, as oil has returned to normal levels, many analysts (including myself) predicted that the airlines would keep the surcharges in place just because they milked some cash out of the passenger. But to our surprise, Virgin Atlantic, British Airways and many others reversed their fees and returned the fare structures to normal.
Today, Northwest and Delta followed suit. Now when booking overseas and domestic reward tickets, the $20 – >$100 fees that formerly angered so many passengers is gone. The best part of the change is that for some, I’m hearing the change is retroactive. So if you booked an award ticket in the last month or so and had to pay the fee, you can call and get your money back. This may be one of the first times ever that I have called the airlines generous.
Your mileage may vary on the return of your fees (depending on who you talk to and what your “status” is,) but it’s worth a ten minute phone call, right?
You can read the full details on Delta’s website here.
Qantas is eager to put this year behind itself. Several mid-air incidents caused the airlines commitment to safety to come into question. Also, their plan to outsource labor caused a ruckus with local unions. Nonetheless, the Qantas is keeping its head above water. It dominates lucrative routes between the US and Australia and holds its own against stiff competition in Asia.
So when a price-fixing scandal involving the airline’s freight division came to public attention, Qantas was only too willing to make amends. Between 2002 and 2006, Qantas was one of over 30 airlines to charge unnecessary fuel surcharges. Virgin Atlantic and British Airways are the two high profile airlines already guilty of price fixing via fuel surcharges. But whereas the two London-based carriers’ scandal involved passengers, Qantas was only accused of fixing prices on air freight. Chief exec Geoff Dixon announced that the issue was settled before the Australian Competition and Consumer Commission (ACCC). A fine of AUS$20 million was paid to the ACCC. Last year, Qantas paid US$61 million for a related price-fixing charge in the US.
With prices at the pump down so much over the past few weeks, people are starting to wonder why the savings have not been passed on to airline passengers. Well, British Airways finally responded to the halving of crude prices by dropping their fuel surcharge £10 to £68 on domestic flights and £109 to £96 on overseas routes. Virgin Atlantic will also institute similar price cuts. The cuts come on the heels of a price fixing controversy involving BA and VA execs. The two airlines were fined over £120 million after admitting to fixing prices on fuel surcharges.
Gadling’s favorite airline CEO (because he’s always saying something outrageous), Michael O’Leary, tried to irk BA last week by criticizing them for not dropping their fuel surcharge after they dropped a similar charge for freight. “BA is using these high and unjustified fuel surcharges as a scam to rip off its passengers.” Surely, O’Leary’s comments didn’t cause BA to drop the surcharges, but with the price fixing scandal still in the rear-view mirror, England’s big two had to do something to get back on the good side of their customers.
[Via Sky News]
If you flew British Airways between the U.S. and England from August 11, 2004 to March 23, 2006, you may be in luck. BA was caught charging passengers a fuel surcharge that went beyond the actual cost of the gas. The scandal also involved Virgin Atlantic, so travelers who flew with that airline during the above dates are eligible to get in on the action.
Don’t start getting excited or jumping up and down like you’ve won the lottery. The maximum refund per person will be around $20. Still, that’s four beers or five lattes or a fairly decent haircut (in some cities).
Those who are eligible for a refund can apply online with their ticket info, passport number, or frequent flier card. Those who didn’t fly BA or Virgin can still feel good because, for once, big airlines got caught with their hands in passengers’ pockets.
With most airlines going out of their way to cut costs and nickel and dime passengers with added fees, it might not be the last time something like this happens.
Several BA and Virgin execs involved in the surcharge scandal will be doing some hard time after being charged with fraud.
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