British Airways was accused of charging too much by its bitter rival Ryanair as it has announced to raise its controversial long-haul fuel surcharge for the second time in five weeks. British Airways has recently decided to raise its fuel surcharges for the second time in only five weeks and the eighth time in the three years since the firm introduced it. The airline has held responsible rising fuel costs for charging long-haul passengers on journeys under nine hours £38 extra for a single journey and £76 return, up from £33 and £66 respectively. Moreover, these charges continue to be highly contentious and have been reduced just once since they were introduced in 2004.
The latest decision of British Airways has prompted Ryanair to launch another hurtful attack on its rival. Peter Sherrard, the head of communications has said, ‘this is British Airways’ ninth rip-off fuel surcharge since May 2004. In that time, the price of oil has doubled but BA’s fuel surcharge has increased seventeen-fold. BA is profiteering yet again.’ On the other hand, Robert Boyle, commercial director of BA took efforts to rationalize the price rises saying, ‘the cost of fuel has again risen significantly in recent weeks. Unfortunately, we have little choice but to pass on some of this extra cost to our customers. Fuel continues to be our second largest cost and we expect our fuel bill this year to be more than £2 billion.’
Interestingly, it was decided by the British Airways that the fuel surcharge for short-haul flights, the zone where BA faces intense competition from Ryanair and easyJet, to stay unchanged at £16 return. However, the hike in charges comes at a problematical time for BA, as it facing an inquiry by the Office of Fair Trading and US authorities over alleged involvement in fixing the prices of fuel surcharges since June 2006. Fuel continues to be BA’s second largest cost and the company estimates to spend more than £2 billion on filling up its aircraft this year. The British Airways refrained from making any statement on the ongoing investigation but it said that it would continue to cooperate with regulators in the inquiry. Last month, the company has already set aside £350 million to tackle with any fines that might stem from the inquiry.
In the meanwhile, Ryanair has confirmed this week that its passenger load factor, a gauge of how full its planes are, had fallen for the second month in progression. BA has also confirmed a fall in its overall load factor, with its domestic UK flights among the worst hit. On the other hand, Virgin Atlantic announced that it would keep its surcharge unchanged ‘for the moment’ at £68 for a return flight of less than nine hours and £76 for longer ones.
