MORE than a decade since
airlines first had travel agents
and passengers up in arms with
the introduction of fuel surcharges, it
seems the aviation industry is ready to
give the controversial YQ tax the boot.
Recently, Singapore Airlines said it
would no longer charge a separate
fee for fuel and insurance, opting
for a single base fare that “folds in”
these costs. It joins Qantas, Qatar
Airways and Cathay Pacific, among
others. This follows drastic reductions
in the oil price and pressure from
industry associations and international
authorities.
“The folding in of fuel and insurance
surcharges into base airfares will be
implemented progressively by region,
starting from March 28… This will not
result in immediate changes to allinclusive
fares, which will continue to
be determined by market supply and
demand, but is intended to provide
a more simplified fare structure for
customers,” said Singapore Airlines in
a statement.
Sally George, market development
manager of Singapore Airlines, expects
the “simplified fare structure” to
receive a positive response from
consumers and travel agents.
Jonathan Gerber, director of TAG,
says: “We couldn’t be happier.
A transparent, open and proper
fare is being charged, not a smoke
and mirrors ‘fuel surcharge’ or
increased tax.”
Although the axing of fuel surcharges
doesn’t translate into lower fares, it
still has many benefits, say industry
players.
Sean Hough, ceo of Pentravel, says:
“[It] makes quoting easier as taxes are
quoted in foreign currency and change
daily.” He says it’s better for travellers
redeeming loyalty miles as they’d pay in
less cash as frequent flyer points can
only be redeemed for the base fare and
not taxes and surcharges.
Club Travel Yield manager, Sharon
Schierhout, says the 1,01%
commission is also given a boost as
the value is taken from the fare total.
“It makes it more beneficial to sell SQ
over other carriers.” She said the value
of the discounts on individual corporate
deals could be greater now that fares
included surcharges.
But, for Asata, the elimination of
fuel surcharges is about transparency
for the customer. Asata ceo, Otto de
Vries, says: “Consumers are often
not aware that the fuel surcharge or
carrier-imposed surcharges are not
a government-levied tax and would
perhaps be less content to pay these
if they knew it was an attempt by the
airline to recover what essentially is
a direct cost to them doing business.
They do not specify a surcharge for a
pilot and crew, so why should fuel be a
separate surcharge?”
Otto says international governments
are increasingly putting pressure on
airlines to scrap controversial fuel
surcharges as the price of oil is at an
all-time low. He cites Hong Kong as an
example. Last year, the Hong Kong.
Civil Aviation Department
(CAD) ruled that airlines
could no longer levy fuel
surcharges on flights
originating from there. He
says in SA airlines often
argue that a reduction in
the oil price is offset by the
fact that operating costs are
in dollars, with some even
changing the name to “carrierimposed”
surcharges. “The
announcement from the Hong
Kong CAD showed at the
time it was not impossible
for airlines to scrap the
surcharge. On its HKG route,
SAA scrapped the fuel levy
under pressure from the
Chinese government for all
flights,” adds Otto.
“SAA, like any other carrier,
charges a total fare, with its
respective pricing components
moulded in the best way to
support its business model
and pricing structures,” says
SAA spokesperson, Tlali Tlali.
He adds that most carriers
apply carrier-imposed fees
and only a handful price “an
inclusive fare”.
