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Chief secretary to the treasury Danny Alexander has written to major UK airlines calling for them to pass on fuel price savings to consumers by cutting fuel surcharges or reducing ticket prices.
Today the Liberal Democrat MP welcomed a decision by Virgin Atlantic to trim ticket prices by £10 and called on other airlines to follow suit.
Alexander said: “I welcome Virgin’s good example and am seeking reassurance that all airlines are doing all they can to reflect falling oil prices by cutting fuel surcharges and ticket prices.
“The oil price has fallen dramatically in the past few months and I will continue to put pressure on airlines and oil companies to ensure people across the UK feel the benefit in their wallets.
“This government is doing all it can to support consumers with the costs of flying, including abolishing Air Passenger Duty for children on economy flights – saving a two child family nearly £150 on a long-haul flight.
“It’s essential that airlines do all they can to pass on savings.”
Despite a major drop in oil prices of almost $50 per barrel since the summer, there is anecdotal evidence that some airlines have yet to cut fuel levies or fares to a level that fully reflects the scale of the oil price fall.
There is no tax on international aviation fuel, which accounts for approximately almost 30% of the industry’s costs, so customers could expect a significant fall in oil prices to lead to a drop in flight ticket prices, according to the Lib Dems.
The move by Virgin Atlantic follows calls by Alexander for oil companies to pass on oil price falls to consumers last month, which led to major supermarkets cutting the price at the pumps.