Tour operators relatively unaffected by oil price rise

The oil price appears not to be affecting tour operators at present.

Few ABTA members have requested to be allowed to impose fuel surcharges on customers.

Tour operator surcharges are governed by strict rules, with companies required to absorb cost increases of up to 2% of the price of a holiday before they can levy a charge on clients.

By contrast, airlines can simply add a fuel surcharge to the advertised fare.

Interestingly, ABTA reports the two requests to add fuel surcharges in its in-tray involve cruises rather than flight-based holidays.

Other than these, most requests are for surcharges to compensate for the fall in the value of the pound against the euro.

An ABTA spokesman said: “The oil price is not a major issue. The strength of the euro appears to be causing more problems.”

The exchange rate reflects the comparatively weaker state of the UK economy and, with the pound at its lowest rate against the euro for 11 years last week, demand for Spain, Italy, Greece and other euro-currency countries may be affected.

ABTA suggests the problem for the airlines is overcapacity. “It is not that there are fewer people flying. There are too many flights,” said a spokesman.

The International Air Transport Association agrees. Chief executive Giovanni Bisignani warned last week: “We have too much capacity.”

Share article

View Comments

Jacobs Media Group is honoured to be the recipient of the 2020 Queen's Award for Enterprise.

The highest official awards for UK businesses since being established by royal warrant in 1965. Read more.