Virgin Blue Cuts Fuel Surcharge

[wirgin blew]

Herald Sun November 11, 2008 01:30pm

VIRGIN Blue has become the latest airline to reduce flight fees by cutting the fuel surcharge on its airfares by 20 per cent.

The airline has slashed surcharge fees on Virgin Blue domestic, Pacific Blue trans-Tasman and Pacific Island flights.

The fuel surcharge for a one-way domestic flight will fall to $19 and to $35 for Pacific Blue and Polynesian Blue one way international flights.

"We have always promised that if the cost of fuel reversed, we would gladly reverse the surcharge accordingly," said chief executive Brett Godfrey.

"That is what we are doing, because that is fair."

Virgin Blue last increased its fuel surcharge in February 2008 in response to successive record hikes in the cost of jet fuel.

The airline said it had resisted further fuel surcharge increases when oil reached record peaks of $US145 a barrel in July.


Lets see what the Rat will do in response.

[Old Fella]

Maybe Virgin should have kept the surcharge on and removed a row of seats so that they could increase the seat pitch a little. SYD-PTH in the 737-800 was painful, and I'm only 175cm. The PTH-SYD sector in the -700 was only less painful because it was about 80 mins shorter.

[Skystar320]

I am nearly 6ft 11inch and have no problem with virgin blue

Where is PTH?

[Teal]

Agree with you 'Old Fella'. Keep the money and increase the pitch. VB not as bad some others from my experience.

I've always used this (http://www.airlinequality.com/Product/seats_aust.htm) link as a seat pitch guide.

[Skystar320]

Try flying Tiger on PER to SIN :mad:

[ozangel]

Have worked on 738s at both airlines. No question about it, there is more space on Virgin 737s.

[A Comfy Chair]

Wirgin Blew....

How about the fact that its actually Virgin following QF this time?

QF reduced their fuel surcharge a few weeks ago.

[Sunstar320]

So domestic surcharge is down to $19, what was it originally?

[wirgin blew]

QF reduced their fuel surcharge a few weeks ago.

Sydney, 08 October 2008
Qantas announced today it would reduce its international fuel surcharges in response to recent falls in oil and jet fuel prices.

Mr Borghetti said the surcharge reduction would be accompanied by domestic fare reductions.
"Qantas domestic and QantasLink regional fares across a range of routes will be reduced by approximately 2-3 per cent"� he said.

2-3% and no specific routes as opposed to 20% across the entire network. I know we are only nit picking but QF will follow the competition as usual.

[PyroTek]

So domestic surcharge is down to $19, what was it originally?

My maths says it was $23.75...

$19/4=4.75
4.75*5 = 23.75...

But the 20% could easily be rounding off...

[A Comfy Chair]

Wirgin Blew...

Erm... Thats 2% to 3% of the TOTAL FARE vs 20% of the Surcharge. Works out to a pretty similar amount for a standard domestic fare. Funny that.

[Tangan]

Comfy Chair

Thats 2% to 3% of the TOTAL FARE vs 20% of the Surcharge. Works out to a pretty similar amount for a standard domestic fare. Funny that.

I suggest you use a calculator next time ...$19 is 2% of a $950 fare and 3% of a $630 fare. On VB you are looking at sectors of 2.5 hours or greater before the QF 2-3% fare cut is even close

VB fares Bne - Syd and Mel - Syd full economy $350 @ 2% = $7 @ 3% =$10.50 ....... Bne - Mel $500 @2% = $10 @3% = $15

With many cheaper fares in the market the 20% fuel surcharge cut delivers a far greater saving than a similar QF 2-3% fare cut would.

[Skystar320]

There should not be a fuel levy now days with the price of fuel!

[Teal]

From today's crikey.com.au

Fool levy or fuel surcharge? Cheap oil hurts airline credibility

Ben Sandilands writes:

The airlines are scrambling today to deal with fuel below the $US 55 parity pricing benchmark, which makes their fuel surcharges look like a blatant rip-off.

This morning AirAsia abolished its surcharges, including on its AirAsia X long haul operations from Australia, and threw in half a million free flights (for the middle of next year) in a PR double whammy.

Earlier today Tiger Airways responded to Plane Talking (http://redirect.cmailer.com.au/LinkRedirector.aspx?clid=0907bc7e-0e86-4743-96af-15eea3b9bc0f&rid=70ac6a9f-9f82-4748-a87c-e55bbfe757f1)’s blog entry on their possible abolition in this market with a sarcastic statement of amazement “that other airlines that had no hesitation in immediately increasing their surcharges when fuel went up have not immediately removed them once it has dropped by 60%.”

Tiger has never imposed a fuel surcharge. Its low cost rival Jetstar only started charging them after Qantas ordered it to fall into line with its policy of extrapolating fuel spikes into estimated extra full year costs and then setting a levy which was always described as failing to recover the total increase.

Qantas and Singapore Airlines recently, and Virgin Blue yesterday, have slashed their surcharges, but the reality is that the collapsed oil price will make their customers feel just as cheated as motorists are when service stations take forever to follow the benchmark down, but always put it up the moment oil goes up.

Of course there was a bit of sweet sorrow for other airlines and travellers this week when Cathay Pacific revealed that it had been ripped off by a hedge fund, sources say it is Lehman Bros, which is said to have taken close to half a billion dollars off it in a contract for fuel it won’t deliver because it went broke.

Qantas is insured against the consequences of a fuel price collapse just as it is hedged against higher prices. But all of this costs additional fees, and a spokesman this morning said that “at current prices and after hedging and fuel saving measures, the Qantas Group's 2008/09 fuel bill will still be more than $1billion higher than in 2007/08."

Maybe the airlines should have ditched fuel surcharges a long time ago and just varied the fares to cope with fluctuations, which is what Tiger really does and Jetstar once did.

It really does take up to three months for fuel price changes to make it into the tanks of airliners, but after four years of immediate increases and reluctant, drawn out decreases to levies, the punters aren’t likely to listen to "reason".

[A Comfy Chair]

Tangan, I suggest that you read what Virgin Blue actually did.

They did not reduce their surcharge BY $19, but by 20% TO $19. That means the surcharge reduction is less than $5.

Using your figures for the full fare economy 2% and 3% reductions, being $7 and $10.50 you have, in fact, proven that on a full fare economy ticket, Qantas has reduced it by more!

[Howard Hughes]

If I book early enough am are flexible with travel time, I can often fly QF for the same price as VB!:ok:

If the boss is paying though, we seem to always fly Virgin.;)

[Ex QF]

I did a quick search and found this article from Oct 2006.
The Age Blogs: Travel (http://blogs.theage.com.au/travel/archives/2006/10/fuel_levy_fiasc.html)

So 2 years ago QF had the levy at $31 a domestic leg whilst the article states, "oil prices have slid to around $59 a barrel compared with $70 earlier in the year."

Article also states that "Virgin Blue's fuel levy has remained unchanged since April 2005."


So 2 years later, oil prices have slid to under $59 a barrel.

?

[skyshow]

Regarding the fuel surchages, just remember that Australian airlines are paying for it in US dollars (which has dropped) and in addition, aviation fuel is more expensive than other fuel.
Airlines like Tiger didn't have a fuel surcharge perhaps because they save money in other ways. eg: less advertising, less pay etc...