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Airlines fail to pass fuel savings to customers

By Sophie Jamieson and Patrick Sawer

AIRLINES have been accused of “profiteering” and “exploiting” passengers after failing to pass on full savings in the price paid for fuel.

The price of jet fuel has fallen by 70 per cent in the past two years, yet the average cost of a transatlantic airline ticket has been cut by just two per cent over the same period.

Some airlines are even continuing to impose a fuel surcharge on certain routes, a mechanism originally intended to apply only when the price of fuel goes up unexpectedly.

Robert Flello, Labour MP for Stoke-on-Trent South, said: “The price of fuel in the UK is not far off rock bottom, but all the way through the chain from oil producer to airline passenger or a person buying something delivered by a haulage company, customers are being ripped off pretty much at each level. It seems that almost everyone down the chain is taking their bit of profiteering.”

The United Federation of Travel Agents’ Associations (UFTAA) sent an open letter to airlines in September, accusing the industry of being “shameless” by including fuel surcharges in their prices.

Birger Bäckman, UFTAA executive administrator, told The Telegraph not enough progress had been made since the letter was sent. “It’s actually getting worse – the price [of fuel] has gone further down,” he said.

In February 2014 aviation fuel was priced at $986.50 (£680) per metric ton. By this time last year that figure had dropped to $599.25. This month the price reached $300.

But data from flight search website Skyscanner showed the average cost of a flight from Britain to the United States fell by just two per cent from £688 in 2013 to £671 in 2015. A flight to Portugal cost six per cent less in 2015 than two years earlier, while flights to Italy fell by 12 per cent and to France by 13 per cent. The biggest drop in fares was for flights to Ireland, which fell by 25 per cent.

A return fare to New York from London with Virgin Atlantic includes a “YQ” charge, code for fuel surcharge, of £143. British Airways claims to no longer apply fuel surcharges on flights out of the UK, but a new “carrier imposed charge” introduced last October also comes to £143 on a return ticket to New York.

George Osborne, the Chancellor, warned airlines at the start of last year he wanted to see a drop in air fares in line with falling oil prices.

But Robert Goodwill, a transport minister, said airlines are locked into “hedge” deals for fuel.

Chris Goater, the spokesman for the International Air Transport Association, added: “Although fuel is a very important part of airlines’ costs – it’s around 25 to 30 per cent – it’s only one cost and the other costs are either going up or are static, like salaries and cost of equipment.”

A spokesman for British Airways said “carrier-imposed charges” were introduced for “a variety of factors” including “changing industry practices and to be consistent with changes that have been in place for flights originating in the USA for a number of years”. A spokesman for Virgin Atlantic said its “competitive” pricing meant: “Our prices have reduced by £70 per trip, per person since fuel prices began to fall.”

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