Tour operators in fuel row

A row over fuel supplements is set to erupt as major operators come under renewed pressure from ABTA to include the charges in brochures.

Escalating fuel costs are due to be debated at ABTA’s board meeting next Wednesday with industry sources predicting it is only a matter of time before cruise companies join tour operators and airlines and charge a supplement.

Virgin Atlantic increased its fuel surcharge this week by £6 per sector to £30 each way for a long-haul trip while British Airways announced today it will increase passenger fuel surcharges for the sixth time since May 2004 on Monday.

Under ABTA’s code of conduct, fuel supplements, along with air passenger duty and passenger service charges, are unavoidable costs and should be included in the headline price in operators’ brochures.

ABTA said operators had been given a certain amount of leeway regarding fuel supplements as the price of fuel was subject to change. But it said the time has come for operators to include the charge. Operators are on average charging £25 on short-haul flights and £45 on long-haul fares.

A Newman Street spokesman said: “It’s time these supplements were included in the headline price. We’ve been getting a lot of complaints from agents who have to go back to customers with extra charges.”

But Cosmos commercial director Stuart Jackson hit back. “The regulations were set in 1992, which was fine when the only real variable was currency, but now we’ve got hugely variable costs. ABTA should be looking to review the package travel regulations to make them relevant in today’s world.”

Jackson said forward buying rates for fuel were $350 per metric tonne this time last year. They are now $700.

“As long as the charges are made clear at the time of booking, the consumer is not being penalised. We all understand the rules that govern us, but they may not be as up to date as they could be,” he said.

But Co-operative Travel Trading Group chief operating officer Mike Greenacre said customers will be misled if fuel charges are left out of second-edition brochures later this year. “I cannot understand why ABTA has not done something about second-edition brochures in terms of fuel surcharges. There is no justification for not including them.”

He argued ABTA has the power to force fuel supplements to be included and should be doing more to lobby for transparency at a time when fuel prices are hitting record highs and adding significantly to holiday prices.

Any changes to ABTA’s rules have to be agreed by the board.

Meanwhile, one industry source said cruiselines that operate out of the UK will soon have to add surcharges for fuel.

“They do it in the US, the Far East and Australia, regrettably it’s just a matter of time before they add a surcharge over here. Cruise ships burn a lot more fuel than aircraft do.”

However, both the Passenger Shipping Association and Carnival UK managing director David Dingle were not aware of any companies planning to charge a fuel supplement.

Dingle said the cruiseline’s latest 2006 brochure included fares that took into account increased fuel prices. But he said: “Fuel prices are so volatile, it is difficult to assess the situation going forward.”

Meanwhile, BA’s long-haul return surcharge charge will rise from £24 to £30 per sector on Monday. Short-haul passenger fuel surcharges will stay at £8 per sector – their rate since June 27. British Airways commercial director Martin George said the airline’s fuel costs remained “a real burden”.

“The price of oil hit a record high of just over $70 a barrel in the aftermath of Hurricane Katrina. Our fuel bill of around £1.6 billion is now our second largest cost after employee costs,” George said.

He described BA’s latest fuel surcharge rise as “very regrettable” but added the airline had “little choice to pass some of our extra costs on to our customers. It now costs almost 400% more than it did in December 2001 to fill up a plane.”