United Kingdom


 

Airline fuel surcharges - on hold for now?

In the last few years we’ve heard a lot about rising airline fuel surcharges, but it looks like rises are on hold for now at least. Costs are still high though and are likely to continue to climb in the future so what can you do to combat the hikes? Read on...

 

What’s it all about?

 

Travel buyers worldwide are facing an incredibly challenging environment, as increased air demand and limited supply offer suppliers a significant advantage. Rising fuel prices since the beginning of this year have prompted additional fare hikes in the form of rate increases and fuel surcharges.

 

Recently, however, several international airlines, including KLM have made public statements indicating they have no plans to increase fuel surcharges for the time being.

 

Our take on things
  • If oil prices increase in the coming months, airlines will not be able to avoid increasing fuel surcharges for long, as fuel represents the second, and in some cases the top, cost to their operations.
  • Rising oil prices have the potential to drive up costs in many areas of travel spend, including hotels, ground transportation and dining.

 

Despite the challenges, certain CWT clients have found ways to continue making savings. Adopting a lowest logical airfare policy instead of sticking with your preferred supplier can help spread your costs across a greater number of carriers, including low-cost ones. You may even find that your preferred supplier comes back to you with a better deal after you show you are able to effectively shift volume.

 

Considerations for implementing this strategy:

 

  • Buyers must have a clear and strong travel policy that is effectively communicated to travellers.
  • A long-term approach is required – buyers must be patient as results will not be achieved immediately.