samsonyuen
September 18th, 2005, 11:53 PM
Has anyone heard about the Newfoundland offshore refinery that Virgin Oil, a new subsidiary of Richard Branson's Virgin Group, wants to set up? I've read a few articles about this, and how he's negotiating with the Premier.
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Fliers 'misled' by fuel charges
By Charles Starmer-Smith (Filed: 17/09/2005)
The travel industry has accused British Airways and Virgin Atlantic of "misleading" passengers by adding extra fuel charges to air fares in the wake of Hurricane Katrina.
Passengers on BA or Virgin Atlantic flights face taxes of up to £167 on long-haul routes after fuel surcharges were this week raised for the fifth time in 18 months. The fuel supplement is now £60, up from £48, per return flight.
Martin George, BA's commercial director, said that with oil prices so high, increases on long-haul flights were unavoidable.
"Our fuel costs remain a real burden,'' said Mr George. "The price of oil hit a record high of just over $70 a barrel in the aftermath of Hurricane Katrina.''
However, Simon Evans, chief executive of the Air Transport Users Council (AUC), said refusing to include these extra charges within the ticket price was misleading for travellers.
"I am totally perplexed as to why these airlines are not absorbing operating costs into the headline fares," said Mr Evans. "Although we accept that rising fuel costs are to blame, by adding on significant extra charges passengers will soon find that the £100 fare they started with ends up as £200 when they come to pay. And it could put people off choosing these airlines in the long run.
"What is more, surely the fuel charge should vary according to the length of journey?" A ticket to New York with BA (travelling between November 1 and December 15) costs £239 return, of which more than half (£124.50) is taxes, fees and charges. Additional costs for return BA flights to Christchurch for a family of four are now £670.
BA and Virgin said all passengers would have to pay increased fuel costs in one way or another. Surcharges were just the most transparent way of doing so. "Last year our fuel bill was £60million over budget," said a spokeswoman for Virgin. "Surcharges cover only one third of that difference."
Some analysts were surprised at the latest increases, given that three-quarters of BA's fuel had been bought in advance at a fixed price. Jet fuel costs have risen by 6 per cent since Hurricane Katrina, whereas fuel surcharges have increased by 20 per cent.
A spokesman for the Association of British Travel Agents (Abta) agreed it was disappointing that airlines would not absorb these extra charges into their headline prices. "We would much prefer that these extra charges were included in the initial price, as it can be very confusing for customers," he said.
Other scheduled airlines have followed suit. Cathay Pacific, Thai Airways and Emirates have added about £40 to the cost of a return flight, and Qantas recently increased its surcharge to £62.
Air France/KLM, which bought 83 per cent of its fuel in advance, has not yet announced any increases.
No-frills airlines have largely avoided surcharges, preferring to absorb added fuel costs into the price of their tickets. "Ryanair guarantees no fuel surcharge, not now, not ever," said Peter Sherrard, the carrier's head of communications. Air Berlin, however, has imposed a £26 surcharge on all return flights.
BA and Virgin introduced fuel surcharges last summer, imposing a £5 levy on return flights, but these charges have increased dramatically (see table, left).
Richard Branson, Virgin's chief executive, is considering steps to cut the escalating price of fuel. He was said to be in talks this week with BA's chief executive, Willie Walsh, about setting up an oil refinery in Newfoundland to supply jet fuel to Virgin and other airlines that join his consortium. A spokesman for BA said it had no interest in such a move.
According to the International Air Transport Association (IATA), the airline industry is expected to lose $7.4 billion (£4.1billion) this year due to heavier fuel bills. Delta and Northwest Airlines this week filed for bankruptcy, citing rising costs and competition from budget carriers.
______________________
Fliers 'misled' by fuel charges
By Charles Starmer-Smith (Filed: 17/09/2005)
The travel industry has accused British Airways and Virgin Atlantic of "misleading" passengers by adding extra fuel charges to air fares in the wake of Hurricane Katrina.
Passengers on BA or Virgin Atlantic flights face taxes of up to £167 on long-haul routes after fuel surcharges were this week raised for the fifth time in 18 months. The fuel supplement is now £60, up from £48, per return flight.
Martin George, BA's commercial director, said that with oil prices so high, increases on long-haul flights were unavoidable.
"Our fuel costs remain a real burden,'' said Mr George. "The price of oil hit a record high of just over $70 a barrel in the aftermath of Hurricane Katrina.''
However, Simon Evans, chief executive of the Air Transport Users Council (AUC), said refusing to include these extra charges within the ticket price was misleading for travellers.
"I am totally perplexed as to why these airlines are not absorbing operating costs into the headline fares," said Mr Evans. "Although we accept that rising fuel costs are to blame, by adding on significant extra charges passengers will soon find that the £100 fare they started with ends up as £200 when they come to pay. And it could put people off choosing these airlines in the long run.
"What is more, surely the fuel charge should vary according to the length of journey?" A ticket to New York with BA (travelling between November 1 and December 15) costs £239 return, of which more than half (£124.50) is taxes, fees and charges. Additional costs for return BA flights to Christchurch for a family of four are now £670.
BA and Virgin said all passengers would have to pay increased fuel costs in one way or another. Surcharges were just the most transparent way of doing so. "Last year our fuel bill was £60million over budget," said a spokeswoman for Virgin. "Surcharges cover only one third of that difference."
Some analysts were surprised at the latest increases, given that three-quarters of BA's fuel had been bought in advance at a fixed price. Jet fuel costs have risen by 6 per cent since Hurricane Katrina, whereas fuel surcharges have increased by 20 per cent.
A spokesman for the Association of British Travel Agents (Abta) agreed it was disappointing that airlines would not absorb these extra charges into their headline prices. "We would much prefer that these extra charges were included in the initial price, as it can be very confusing for customers," he said.
Other scheduled airlines have followed suit. Cathay Pacific, Thai Airways and Emirates have added about £40 to the cost of a return flight, and Qantas recently increased its surcharge to £62.
Air France/KLM, which bought 83 per cent of its fuel in advance, has not yet announced any increases.
No-frills airlines have largely avoided surcharges, preferring to absorb added fuel costs into the price of their tickets. "Ryanair guarantees no fuel surcharge, not now, not ever," said Peter Sherrard, the carrier's head of communications. Air Berlin, however, has imposed a £26 surcharge on all return flights.
BA and Virgin introduced fuel surcharges last summer, imposing a £5 levy on return flights, but these charges have increased dramatically (see table, left).
Richard Branson, Virgin's chief executive, is considering steps to cut the escalating price of fuel. He was said to be in talks this week with BA's chief executive, Willie Walsh, about setting up an oil refinery in Newfoundland to supply jet fuel to Virgin and other airlines that join his consortium. A spokesman for BA said it had no interest in such a move.
According to the International Air Transport Association (IATA), the airline industry is expected to lose $7.4 billion (£4.1billion) this year due to heavier fuel bills. Delta and Northwest Airlines this week filed for bankruptcy, citing rising costs and competition from budget carriers.