Singapore Airlines to cut fuel surcharges

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stuartfaz

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From Singapore Airlines to cut fuel surcharge

Singapore Airlines to cut fuel surcharge


8/09/2008 10:45:05 PM

Singapore Airlines (SIA) said it would cut fuel surcharges on some of its international flights, including to Australia, after recent declines in jet fuel prices.

The cuts, ranging from $US4 to $US10 ($A4.80 to $A12.00), will take effect on Tuesday and apply to flights from Singapore to South-East Asian countries, New Zealand and other East Asian destinations, as well as Australia, SIA said in a statement.

SIA also is cutting the surcharges on flights from Singapore to South Asia, Egypt, Saudi Arabia, flights between Dubai and Istanbul, the Dubai-Moscow route and the Bangkok-Tokyo service, it said.

The surcharges on long-haul flights, including between Singapore and the United States and Canada, were unchanged.

In a separate statement, SIA's regional wing SilkAir also announced cuts of $US4 to $US10 ($A4.80 to $A12.00) in its fuel surcharges for all flights starting on Tuesday.

SilkAir flies to popular holiday destinations including those in South-East Asia, China and India.

Crude oil prices have eased 27 per cent from record highs of above $US147 ($A176.45) reached in July on growing worries about a US-led global economic slowdown.
 
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Good move but not many airlines have followed suit with some finding other means, QF and credit card surcharge, to increase airfares. Crude oil is well below US$100/barrel.
 
As always the problem is that Airlines hedge their fuel price so whilst the price was soaring to $160/barrel surcharges werent soaring quite so high. So the downside is that they might be hedging at $120/barrel which 2-3 months ago seemed like a good price. The crude oil price has come down a lot faster than I think people were expecting.

Then there is the opportunity to maintain profits in a very volatile industry - with airlines/tour operators collapsing airlines want to sustain profitability so they are around in a few months and hopefully years.
 
Technically Qantas are correct in arguing that they did not raise surcharges while the price of oil was over $100/barrel. What they did do was increase the base airfare instead.
 
Technically Qantas are correct in arguing that they did not raise surcharges while the price of oil was over $100/barrel. What they did do was increase the base airfare instead.

Quite clever really ... if demand is holding, no need to bring base fare down just because fuel charges are coming down.
 
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