Ryanair, Aer Lingus say no to fuel levies

AER LINGUS and Ryanair said they have no plans to introduce a levy on passengers to compensate for higher fuel prices following a decision by British Airways (BA) to more than double its charge on customers.

BA says it will have to double the surcharge on long-haul flights from £2.50 (€3.75) to £6 (€9) on one-way journeys and to £12 (€18) for return flights.

However, the two largest Irish airlines say they were prepared to absorb fuel costs rather than let their customers pay more.

BA was one of the first European carriers to introduce the charge earlier this year to offset the cost of rising oil prices. BA’s fuel bill this year will rise by £225 million (€338m) to more than £1.1 billion (€1.65bn). The levy will add £70m (€105m) in revenues this year.

A spokeswoman for Aer Lingus said it was maintaining its policy of not imposing a fuel charge.

“We are looking to reduce fares for customers. We will just take the hit,” she said.

The spokeswoman added that some of Aer Lingus’s fuel costs were hedged out until the end of this year and it had some hedging in place for next year.

The airline said that cargo customers had been charged more, but this was normal as these customers benefit from reductions when fuel costs are lower.

Ryanair said it too would not be adding a fuel levy this year. Head of communications Paul Fitzsimmons said: “It is wrong, unfair and anti-consumer that passengers who have already purchased high-priced BA tickets and paid a fuel surcharge now have to pay a second surcharge.”

The airline has traditionally hedged out most of its fuel requirements but chief executive Michael O’Leary said last week that it will not be hedging at the current high prices.

Mr O’Leary said that the hike in fuel costs will not push Ryanair into losses, unlike many of the airline’s rivals and he added that the carrier would still be profitable if prices hit $80 a barrel.

BA has hedged out 72% of its fuel requirement until next March at $32 a barrel, but given its long-haul network it is more vulnerable to price shocks.

Virgin Atlantic said yesterday that it too was considering a fuel levy.

Oil prices have risen this year by more than 25% over fears that supplies from the Middle East could be interrupted because of the political unrest in Iraq.

The price of oil jumped again yesterday, but was still trading just off its all-time high of $44.77 reached last Friday.