British Airways slashes economy fuel surcharges
British Airways reduce economy ticket rates
Dubai: British Airways has slashed its fuel surcharges for its economy and premium economy customers, the airline said on Tuesday.
BA anticipates that its annual fuel bill will rise 50 per cent this year to Dh17.68 billion, but it opted to slash its fuel surcharges to remain competitive in the market.
"Our fuel bill will rise to £3.1 billion (Dh17.68 billion) this year, up by £1 billion from last year. It is now our largest cost and represents about 35 per cent of our cost base. Just five years ago it was nearer 10 per cent," said Middle East commercial manager Paul Starrs.
"In spite of the fact that the overall cost of fuel for British Airways has not fallen, we have implemented the lower surcharge because the price of fuel has dropped in recent weeks and our objective is to remain competitive in the marketplace."
He added that the airline kept its surcharges under constant review and adjusted them as and when it was appropriate to do so.
According to Starrs, the airline's profits for the first half of the year dropped by 92 per cent, however, its share price rose 11.9 per cent.
Airlines have had a tum-ultuous year with high oil prices peaking at $147 per barrel before falling to their current levels.
"It's true, oil prices have dropped in recent months. However, the market remains volatile and as the pound continues to weaken against the US dollar, our overall annual fuel bill - which is paid for in dollars - has not reduced," Starrs said.
The general worldwide economic turndown and a decline in consumer confidence have weakened the demand for travel, he added.
"This year alone we have seen 30 airlines go out of business, and we are likely to see more. Trading conditions are challenging, long-haul premium traffic is softening after the traditionally busy summer period and forward bookings are being affected around the world."
Gulf News reported on Tuesday that high oil prices had halted Emirates' profit growth, slashing its first half net profit by 88 per cent. The drop in fuel surcharges is the second for BA. Last month it joined Virgin Atlantic in cutting the charges.
