Oil high leads to travel cost rise

Thursday 13th May 2004, 12:00AM BST.

SEA passengers will have to pay more because of high oil prices. And air travel could soon follow suit.

Condor has now introduced a fuel surcharge in accordance with an agreement with the island authorities.

It affects all bookings from 7 May and means passengers will have to pay £1 extra each journey between the UK and Channel Islands and UK and France and 50p extra for each inter-island journey and between the Channel Islands and St Malo.

It follows more than four weeks of rises in which fuel prices have risen more than 14p per litre.

‘We have a mechanism to introduce a fuel surcharge through an agreement with the island authorities if it passes a certain threshold,’ said a Condor spokesman.

‘Regrettably, we have had to do that.’

Airlines globally have announced that they will be increasing their fares and the new rates are likely to be implemented imminently and are certain to hit summer holidaymakers.

Aurigny managing director Malcolm Hart said he did not yet know whether the airline would be forced to raise fares.

‘Our prices get reviewed every fortnight by our fuel suppliers and we are going to see what happens in the next few weeks. We have not made a decision one way or the other,’ he said.

‘If it stays as high as it is at the moment, it’s probably inevitable prices will go up, but it’s not a decision I’m prepared to take at the moment. We will look at it very closely in the next few weeks to see if it eases.’

Flybe said although some airlines might disguise this increase with mid-fare price increases, and others such as BA and Qantas would impose surcharges across all fares, the reality was that all airlines would ultimately be forced to raise prices in some way.

‘It’s not just a Channel Islands issue but is affecting route networks rather than individual routes,’ said Ian Taylor, Flybe’s general manager in the Channel Islands.

‘It would be foolish of us not to acknowledge that following the severe pressure on the increase in the price of oil, which reflects in the price of aviation fuel, there may well have to be a change in the pricing structure to all airlines.

‘Currently, we are monitoring what our exposure is and the last thing we want to do is put on any increases in the form of a surcharge or fare increase across all levels and once we have assessed the implications, we will make a decision.’

He said it had not yet put on any increases and it would be a few days before it knew what the situation was.

‘It’s a great shame. We have reduced the cost of travel to the islands significantly in the last 18 months and the last thing we want to do is impose any increase to our fares, but we are not saying we will not do this.’

The soaring oil charges, which will drive up petrol prices, also threaten to affect the cost of package holidays. And experts are warning that higher air fares could stay until next year.

Last Friday, crude oil hit $40 a barrel for the first time since October 1990 during the build-up to the first Gulf War.

At close of business in New York yesterday, the price was $40.77 against an all-time high of $41.17.


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