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British Airways (BA) has been slammed today for "misleading" its customers over climbing fuel surcharges that from today will add £116 to the price of a return long-haul flight.
Research by Times Online can reveal that BA has increased the surcharge on long-haul flights 23-fold in less than fours year despite a less than threefold rise in the price of fuel.
In May 2004, when BA first introduced a fuel surcharge, customers paid an extra £2.50 on longhaul flights. From today passengers will pay an extra £58.00 on a one-way long-haul flight taking longer than nine hours.
Since 2004, the price of Brent crude has risen from $36.97 a barrel to $91.07.
A spokesman at the Air Transport Users Council (AUC), said that stripping out the cost of fuel was "misleading", because it is a cost of business and should be included in the price of the ticket.
He said: "Companies try and make out that the actual price of the ticket is cheap for example, a ticket to America costs £100 but it is actually £250 because the other £150 covers surcharges and other costs. These are the cost of business and should be included in the overall price."
In nearly four years, BA has increased fuel surcharges ten times, mostly on long-haul flights. The carrier has reduced prices only once, on long-haul flights lasting less than nine hours, by £5 to £30.00.
However, BA increased the surcharge again three months later to £33.00.
On short-haul flights, a £2.50 surcharge was introduced in May 2004, rising to £10 today.
A spokeswoman at BA said the group's fuel bill had increased from £1 billion to £2 billion in three years, and that the surcharges were "fair, reasonable and justified".
She added that its fuel surcharge "is not directly related to the cost of fuel but directly linked to the price at which we can buy it". Like all other airline companies, BA hedges against the future price of fuel.
She said while the company had previously been able to buy fuel at a low price over a long period of time, the company was now purchasing more expensive crude for a shorter period.
In its annual report for 2004-05 when it introduced surcharges on passenger travel, BA saw its revenue from cargo and passenger surcharges rise by 36.9 per cent to £831 million while its fuel price reached £1.1 billion.
The following year, fuel costs rose to £1.6 billion while turnover generated from passenger and cargo fuel surcharges increased by 51.5 per cent to £1.1 billion.
In its most recent financial year, fuel costs reached £1.9 billion and revenue from surcharges fell to £519 million.
In August, BA pleaded guilty to charges of fixing fuel surcharges on both passenger and cargo flights between 2004 and 2006 and was fined $300 million by the US Department of Justice.
On price-fixing passenger surcharges, BA was also fined £121.5 million after Virgin blew the whistle on the practice after both airlines became the focus of an investigation into price-fixing.
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Er, excuse me. Could the gentleman from AUC kindly explain what is actually misleading here? If you go to BA's website it quotes you 'all-inclusive' prices i.e. including all taxes, airline/airport charges and other fees.
There is one benefit to seeing your fees and charges separately. On a 'non-refundable' ticket these are normally refundable - but they wouldn't be if they were included in the fare, as our friend at the AUC advocates!
However don't forget that some LCCs airlines, particularly one based in Dublin, assesses an administrative charge for refund of taxes, fees and charges which is higher than the amount the customer deserves to be refunded. Perhaps the AUC could comment if this practice is misleading (or even legal)
Tom Bowlie, Newbury, Berks
There is something about the airlines. Few if any of them are able to quote a price without adding on a shed-load of hidden extras. It is entirely legitimate to put up the price if your costs of delivering a service increase, for example a rise in the cost of fuel. But it is entirely disingenous to quote a price then to add on various fees and charges. The only things that can reasonably be added are government imposed taxes - in many ways it is desirable that these are transparents
Richard Madge, Bexhill, UK
I think the government should ban airlines from having fuel surcharges. The cost of fuel is a cost just like anyother cost if staff wages go up one is not expected to pay a staff surcharge. If fuel prices rise the price of a ticket should rise. Some airlines charge a security surcharge this should be added to the cost of a ticket. Please no surcharges!
John S. Knight, sheffield, england
Thanks for that - I won't waste my time on BA's website in future.
MarkS, Leeds,