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Bmi abandons shorthaul fuel surcharge

Saturday 17 Jan 2009 6:58am

Bmi has scrapped fuel surcharges on all its short-haul flights in response to recent drops in oil prices. The move to abandon the surcharge, currently calculated at £16 per person in economy class and at £20 per person in business class, could save a family of four more than £128 on a return trip to Europe. Bmi's announcement also puts pressure on other competitor airlines, including British Airways and Virgin Atlantic, to remove their fuel surcharges. A spokesman for Bmi said: 'These are tough times for consumers, and we hope the decision will help encourage people to continue travelling'. Last week the price of crude oil stood at $47 a barrel, down from a peak of $147 a barrel earlier this summer. British Airways currently charges a furl surcharge of £32 per person on a short-haul, economy class return flights, and £40 per person on business class return flights. German flagship airline Lufthansa has a surcharge of €48 (£43) per person for European return flights, while Air France and KLM charge similar amounts. A spokesman from British Airways said that it regularly re-assessed its fuel surcharges, but declined to comment on whether Bmi's decision would influence their own policy. The spokesman added that BA's strategy for purchasing fuel was different to Bmi's. British Airways uses a hedging policy, where it purchases fuel over a specific period at a fixed price, meaning that the airline would not necessarily be able to secure fuel at current lower prices. In addition, the pound's slump against the US dollar influences decisions on surcharges because airlines normally pay for fuel in dollars. Back in October, both British Airways and Virgin Atlantic reduced their fuel surcharges on medium-haul flights (shorter than nine hours) from £78 to £68, and on long-haul flights (flights longer than nine hours) from £109 to £96. It was also reported in October that the cost of fuelling a British Airways transatlantic flight could be covered almost completely by the fuel surcharges paid by its passengers alone. However, these £10 reductions represent only a fraction of the recent falls in the cost of aviation fuel, which has fallen by up to 46 per cent in the last twelve months. Some European airlines, including Lufthansa, have made slight reductions to their short-haul fuel surcharges, however Bmi is the first airline to drop them completely.

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